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TMI Blog1953 (2) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian Income-tax Act of 1922 was brought into operation and extended to all the merged States as from 1st April, 1949. By section 7 of the Act it was provided: If, immediately before the 26th Day of August, 1949, there was in force in any of the merged States any law relating to income-tax, super-tax or business profits tax, 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 the assessment under the Indian Income-tax Act, 1922, as extended to that State by Section 3, or as the case may be, the levy, assessment and collection of business profits tax for any chargeable accounting period ending on or before the 31st day of March, 1948, and for any purposes connected with such levy, assessment or collection: The first proviso to this section was to the following effect: 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 by or under the Indian Income-tax Act, 1922 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Huzur Adalat, and by the Taxation Laws (Extension to Merged States and Amendment) Act of 1949 and the order passed by the Central Government, the Appellate Tribunal was constituted to take the place of the Huzur Adalat which was abolished. In the Act which abolished the Huzur Adalat, no right of appeal is given to the petitioners. Their rights continue to be governed by the Baroda law. It is important to note that the assessment of the petitioners for the year 1947-48 was under the Baroda law and the assessment was to be determined according to that law. Under the Baroda law they had a right of appeal to the Huzur Adalat and they exercised that right and under that law they had no further right of appeal or reference. Therefore, what we have to consider is whether there is anything in the Act passed, to which reference has been made, which has conferred upon the petitioners a right which they did not possess under the Baroda law. The Indian Income-tax Act was only made applicable from 1st April, 1949, and therefore the petitioners' assessment could not be determined under that Act. Under Section 7 the Baroda income-tax law ceased to have effect except for the purposes menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinary tribunal of the land must dispose of the appeal with all the incidents of procedure of that Court attaching to the appeal. But all that Act LXVII of 1949 did was to indicate a tribunal which should take the place of the tribunal under the Baroda law, with this express provision that in all matters of procedure the Baroda law was to apply and not the Indian Income-tax Act. A right to come to the High Court on a reference is a law of procedure with regard to assessment. An assessee who is governed by the Indian Income-tax Act has a right to have the opinion of the High Court in matters of his assessment. That right an assessee under the Baroda law did not have. Therefore, the contention of the petitioners comes to this that although in terms Act LXVII of 1949 provided that in matters of assessment the Baroda law would apply, even so because the Appellate Tribunal took the place of the Huzur Adalat, the petitioners were given the right to come to the High Court, a right which could only arise under the Indian Income-tax Act and not under the Baroda law. Various authorities were referred to at the Bar, but when we look at them, the principle that is to be deduced is clear an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dalat Court and under the rules of procedure of that Court there was no right of reference or no further right of appeal. That appeal was not transferred to the Appellate Tribunal under the Indian Income-tax Act, but what the law provided was that the Appellate Tribunal should perform the same functions and exercise the same jurisdiction which the Huzur Adalat was doing. Therefore, far from there being the case here of a matter being referred to an established Court of the land, we have a case here where the matter is pending before a foreign Court, as it were, and that foreign Court being abolished a Court of the land is called upon to discharge the duties of the foreign Court. The ordinary Court, the Appellate Tribunal, is not exercising its ordinary jurisdiction; it is exercising the jurisdiction which the Huzur Adalat would have exercised if it had not been abolished. The next case referred to is the one reported in James C. Bros. Ltd. v. National Sewing Thread Co. Ltd. [1951] 53 Bom. L.R. 556. There our Court of appeal was called upon to consider whether there was a further appeal under Clause 15 of the Letters Patent from a decision of a single Judge of the High Court di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Indian Income-tax Act, 1922, or, as the case may be, the Business Profits Tax Act, 1947, as extended by Section 3 to that merged State, and what Sir Jamshedji says is that it was to the Tribunal as constituted under the Indian Income-tax Act that the appeal was transferred and therefore we must look to the provisions of the Indian Income-tax Act to determine what are the rules of procedure that apply to the Tribunal. In our opinion no special significance attaches to the expression constituted by or under the Indian Income-tax Act, 1922. These words are merely descriptive of the Tribunal, and all that the proviso does is to set up a correspondence between the tribunals under the Baroda law and the tribunals under the Indian Income-tax Act. Sir Jamshedji says that once the Appellate Tribunal constituted under the Income-tax Act is called upon to dispose of the appeal of the petitioners, the Tribunal will have all the incidents of its jurisdiction, and one of the important incidents of its jurisdiction is the application to make a reference to the High Court. But the fallacy underlying the argument is that the appeal of the petitioners has not been transferred to the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. SHAH, J.-- Prior to the merger of the Baroda State with the Indian Union, there was in operation in that State the Baroda State Income- tax Act of S.Y. 1896. Under that Act the petitioners were assessed to income-tax by an officer designated as 'Sarveradhikari'. That officer having assessed the petitioners to income-tax, an appeal was preferred to the Huzur Adalat, i.e., the Privy Council of the Baroda State. That appeal was permissible under a notification issued by the Baroda State Government. Before the appeal could be heard by the Huzur Adalat the State of Baroda merged with the State of Bombay and after that date there was no authority corresponding to the Huzur Adalat of the Baroda State, which could hear the appeal. After the merger of the Baroda State, the Indian Parliament passed the Taxation Laws (Extension to Merged States and Amendment) Act, 1949, which provided by Section 7(1):- If, immediately before the 26th day of August, 1949, there was in force in any of the merged States any law relating to income-tax, super-tax or business profits tax, that law shall cease to have effect except for the purposes of the levy, assessment and collection of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch they claimed arose on the decision of that Tribunal, to this Court. The Appellate Tribunal having refused to refer a case, a petition was lodged in this Court claiming a writ of mandamus against the officers constituting the Tribunal. Now, the whole argument of the petitioners is that once the appeal was heard by the Appellate Tribunal it was resorted to by the petitioners as an ordinary Court constituted under the Indian Income-tax Act and that to that decision the normal incidents relating to reference attached. In my view the argument proceeds upon a fallacy. The Appellate Tribunal was not approached as an ordinary tribunal constituted under the Indian Income-tax Act for deciding questions which arose under the Indian Income-tax Act, but it was approached as a tribunal which was performing the functions of the Huzur Adalat of the Baroda State under the Baroda State Income-tax Act. The Baroda State Income-tax Act provided no right of reference or appeal against the decisions of the Huzur Adalat and if no appeal or reference lay against the decisions of that tribunal, the mere fact that the Appellate Tribunal is called upon to perform the duties which the Huzur Adalat would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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