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PETITIONER: D.   R. MADHAVAKRISHNAIAH

       Vs.

RESPONDENT: THE INCOME-TAX OFFICER, BANGALORE.

DATE OF JUDGMENT: 16/12/1953

BENCH: SASTRI, M. PATANJALI (CJ) BENCH: SASTRI, M. PATANJALI (CJ) MAHAJAN, MEHR CHAND DAS, SUDHI RANJAN HASAN, GHULAM JAGANNADHADAS, B.

CITATION:  1954 AIR  163            1954 SCR  537  CITATOR INFO :  R          1957 SC 692  (5)

ACT:  Finance   Act  (XXV  of  1950),  s.   13,   proviso-Validity  thereof--Constitution of India, Art. 277.

HEADNOTE: The  assessee challenged the jurisdiction of the  Income-tax Officer, Special Survey Circle, Bangalore, to assess income- tax  and super-tax on his income accruing prior to April  1, 1950, in the State of Mysore, on the ground that the proviso to  s.  13 of -the Indian Finance Act, 1950,  by  virtue  of which  he was exercising his power was ultra vires and  void as  the Parliament had no pow-or to make a  law  authorising any  officer  appointed under the Indian Income-tax  Act  to levy tax under the Mysore law prior to the Constitution. It   was  contended  (i)  that  on  general   constitutional principles  the Union Parliament had no power to make a  law having   retrospective   effect  with  reference   to   pre- Constitution  period,  (ii)  that the  Parliament  was  also prohibited  by Art. 277 from making a law  authorising  such officers  as  in  the present case to mot in  the  State  of Mysore: Held,  (repelling the contentions) (i) that the  Parliament had  such power vide the judgment delivered in Case No.  296 of  1951, (ii) that while Art. 277 authorises the  continued levy of taxes lawfully levied by the Government of the State before  the  commencement  of  the  Constitution  and  their application  to the same purposes as before, even after  the Constitution  came  into  force, there  is  nothing  in  the article  to warrant any implication that such  taxes  should continue  to be levied, assessed and collected by  the  same State  authorities as before the Constitution and  there  is nothing  in  Art. 277 to preclude Parliament  making  a  law providing  for  the levy and collection  of  income-tax  and super-tax under the Mysore Act’through authorities appointed under the Indian Income-tax Act.

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JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 209 and 210 of 1953. Appeals  by  special leave against the Judgment  and  Orders dated  4th April, 1953, of the High Court of  Judicature  of Mysore at Bangalore (Medapa C. J. and Vasudevamurthy J.)  in Civil Petitions Nos, 20 and 21 of 1953, 538 M.Ramaswamy,  Senior Advorate, (B.  Neelakanta,   with  him) for the appellant. M.   C. Setalvad, Attorney-General for India, (Porus A. Mehta, with him) for the respondent. 1953 . December 16.  The Judgment of the Court was delivered by PATANJALI SASTRI C. J.-These two connected appeals arise out of  applications  made to the High Court  of  Judicature  at Bangalore under article 226 of the Constitution  challenging the  jurisdiction of the Income-tax Officer, Special  Survey Circle, Bangalore, to assess the appellant to income-tax and super-tax on his income accruing prior to April 1, 1950,  in the State of Mysore and praying for the issue of appropriate writs  in that behalf.  The applications were  dismissed  by the  court  and  leave to appeal having  been  refused,  the appellant has brought these appeals by special leave of this court.  It  -is a matter of admission that the officer  making  the assessments  was  an  officer  Appointed  under  the  Indian Income-tax  Act,, 1922, and that in making such  assessments he was applying the income-tax law in force in the State  of Mysore down to the end of the year of account 1948-49.   The officer  was exercising jurisdiction in the State by  virtue of  -the  proviso to section 13 of the Indian  Finance  Act, 1950, which reads as follows:- Repeals  and Savings.-(1) If immediately before the 1st  day of April, 1950, there is in force in any Part B State  other than  Jammu  and Kashmir or in Manipur, Tripura  or  Vindhya Pradesh  or in the merged territory of Cooch-Behar  any  law relating  to  income-tax or super-tax or tax on  profits  of business, that law shall cease to have effect except for the purposes of. the levy, assessment and collection of  income- tax  and super-tax in respect of any period not included  in the  previous year for the purposes of assessment under  the Indian Income-tax Act, 1922, for the year ending on the 31st day  of March, 1951, or for any subsequent year or,  as  the case may be, the levy, assessment and 539 collection  of  the  tax  on profits  of  business  for  any chargeable  accounting period ending on or before  the  31st day of March, 1949: Provided  that any reference in any such law to an  officer, authority,  tribunal  or  court  shall  be  construed  as  a reference to the corresponding officer, authority,  tribunal or court appointed or constituted under the said Act, and if any  question arises as to who such  corresponding  officer, authority, tribunal or court is, the decision of the Central Government thereon shall be final...... It is contended that the proviso is ultra vires and void  as the Union Parliament had no power to make a law  authorising any  officer or authority or Tribunal or Court appointed  or constituted under the Indian Inconm-tax Act, 1922, to  levy, assess and collect incometax and super-tax payable under the Mysore law prior to the commencement of the Constitution  of India.   The  contention is based on  two  grounds:  namely, firstly,  on  general constitutional  principles  the  Union

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Parliament had no power to make a law, having  retrospective operation with reference to the pre-Constitution period; and secondly, the Union Parliament is prohibited by article  277 of  the Constitution by necessary implication from making  a law grafting on the Mysore income-tax law the machinery  for assessment and collection provided under the Indian  Income- tax Act, 1922, for purposes of assessment thereunder. So  far  as  the  first ground is  concerned,  the  case  is governed  by  the judgment just delivered in  the  Rajasthan case [Union of India v. Madan Gopal Kabra (1) ]. It  remains only  to deal with the second ground based on  article  277. That article reads thus : "Any taxes, duties,.cesses or fees which, immediately before the  commencement of this Constitution, were being  lawfully levied by the Government of any State or by any municipality or  other  local authority or body for the purposes  of  the State,  municipality,  district  or other  local  area  may, notwithstanding that (1)  Infra p. 541. 71 540 those  taxes, duties, cesses, or fees are mentioned  in  the Union  List, continue to be levied and to be applied to  the same  purposes  until provision to the contrary is  made  by Parliament by law." It was urged that, inasmuch as the article authorises, among others,  the  income-tax  and  super-tax,  which  was  being lawfully  levied  by the Government of Mysore prior  to  the commencement  of  the Constitution to be levied  and  to  be applied to the same purposes even after the commencement  of the Constitution until provision to the contrary is made  by Parliament  by law, and no such law was made  by  Parliament till  April 1, 1950, when the Indian Finance Act, 1950,  was enacted,  it followed by necessary implication,  the  Mysore law  of income-tax must be applied for the levy,  assessment and  collection of such taxes and, as the legislative  power conferred  on  Parliament by article 245 is subject  to  the provisions  of  the  Constitution  including  article   277, Parliament had no power to legislate, grafting officers  and authorities.  appointed under the Indian Income-tax Act,  on the Mysore State, for the levy, assessment and collection of the tax under the State law.  We see no force in this  argu- ment.    While  article  277  undoubtedly   authorises   the continued levy of taxes lawfully levied by the Government of the  State before the commencement of the  Constitution  and their application to the same purposes as before, even after the  Constitution came into force, there is nothing  in  the article  to warrant any implication that such  taxes  should continue  to be levied, assessed and collected by  the  same State  authorities as before the Constitution.  As the  High Court  rightly  pointed out, it would  obviously  have  been inconvenient  and  unnecessary to  have  officers  appointed under the Mysore Income-tax Act continuing to function  only in respect of the earlier assessment years side by side with officers  appointed  under the Indian  Income-tax  Act  also functioning in the State for assessments subsequent to April 1,  1950.  Both as a measure. of economy and with a view  to smooth and efficient management, it 541 was  obviously necessary and desirable that  the  changeover from the Mysore income-tax law to the Indian Income-tax  Act should  be in the way provided by section 13 of  the  Indian Finance  Act, 1950.  We find nothing in article 277  of  the Constitution  to preclude Parliament making a law  providing for  the  levy and collection of  income-tax  and  super-tax

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under the Mysore Act through authorities appointed under the Indian  Income-tax  Act.   Accordingly,  we  hold  that  the Income-tax  Officer, Special Survey Circle,  Bangalore,  had jurisdiction  to  assess  the appellant to  income  tax  and super-tax  in respect of the income of the period  prior  to the commencement of the Constitution. The appeals fail and are dismissed with costs. Appeals dismissed. Agent  for  the appellant: M. S. K. Sastri. Agent for the respondent: G. H. Rajadhyaksha.