Case ID: 199

Judgment:
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 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 vs 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 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.

Summary:
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 section 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 article 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 article 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 article 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.