RAJPUTANA MINING AGENCIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an appeal with the special leave of this Court against the judgment of the High Court of Rajasthan dated April 22, 1954. The appellant is a private limited Company, which was incorporated in 1945 in the former Kotah State. The income-tax authorities sought to tax its profits and income for the assessment year 1950-51 corresponding to the previous year, 1949-50. The appellant claimed exemption under S. 14 (2) (c) of the Indian Income-tax Act, 1922, as it stood before the amendment in 1953, contending that the exemption stood good even after the amendment. This claim was rejected by the High Court, which was moved under Art. 226 of the Constitution. Hence this appeal.

(2.) Prior to the integration of Koath State into the United State of Rajasthan in 1949, there was no income-tax law in force in Kotah State. Till the formation of the State of Rajasthan, there was no such law in force in any part of Rajasthan, except Bundi State. The Indian Finance Act of 1950 made the Indian Income-tax Act, 1922, applicable to the whole of India, except the State of Jammu and Kashmir, and suitably amended the Indian Income-tax Act. Rajasthan then became, from April 1, 1950, a taxable territory.

(3.) For the assessment year 1950-51, income-tax was sought to be imposed in the State of Rajasthan. One Madan Gopal Kabra moved the High Court under Art. 226 of the Constitution to restrain the taxing authorities from claiming tax for the period prior to April 1, 1950, contending that inasmuch as Rajasthan was not a taxable territory before April 1, 1950, no tax for a period prior to that date could be demanded. This Court in an appeal by the Department against the decision of the High Court of Rajasthan, which had accepted the contention, held that the tax was leviable. It is not necessary to give the details of the decisions on that occasion. The judgment of this Court is reported in The Union of India vs. Madan Gopal Kabra, (1954) SCR 541.