LexG. EKAMBARAPPA & ORS. versus EXCESS PROFITS TAX OFFICER, BELLARY
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G. EKAMBARAPPA & ORS. v. EXCESS PROFITS TAX OFFICER, BELLARY May 2, 1967 [J. C. SHAH, S. M. S!KRI AND V. RAMASWAMI, JJ.] Aclap1<1tio11 of Laws, Order (No. 3) dated December 31, 1956- Excess Profits Tax Act, 1940 made i11app/lcable to all areas forming part of a Part B State immediately before November I, 1956-IVhetlier tunounts to 'repeal' of Act in respect of such area-General Clauses Acl. s. 6 1vhether attracted. General Clauses Act, S• 6(e)-Liabillty 'acer :ed or incurred'- Bellary district i11cluded i11 Part B State Immediately before NO\·ember I, 1956-Notice under E.tcess Profits Tax Act, s. IS Issued in 1960 ln respect of business carried on in sahl district in 1943-44-Terms of s. 6(e) General Clauses Acl whether satisfied-Liability 10 tax ll'hetlier .arises at eud of chargeable accounting period or lvhen assessntent pro· ceedings completed. The District of Bellary originally belonged to the Part 'A' State of Madras in British India. On October l. 1953 it merged in the Part 'B' State of Mysore. The Excess Profits Act, 1940 applied only to British India. · When Bellary District went to the Part 'B' State of Mysore the Act ceased to apply to it. After the States Reorganisation Act, 1956, .\lysore also became a Part 'A' State. But according to s. 1(2) of the Adaptation of Laws (No. 3) Order dated December 31. 1956. the aforesaid Excess Profits Tax Act was to extend "to the whole of India except the t~rritories which immediately before November 1, 1956 were comprised in a Part 'B' State." In 196Q the Excess Profits Tax Officer, Bellary gave a notice to the appellants under s. 15 of the Act in res- pect of the period October 30, 1943 to October 30, 1944. The appel- lnnts objecied that the Act did not apply to Bellary district as immec;liately ·before November 1, 1956 it was in a Part 'B' State. The plea was re- 1ected by the departmental authorities as well as by the High Court m a wnt petition under Art. 226 of the Constirution. In appeal. by special leave, to this Court it was contended that so far as Bella11· Dis-· trict was concerned it was not a case of repeal but only of non-applica- tion of the Act, and thus s. 6 of the Gen~ral Clauses Act was not attracted. It was further urged that even if s. 6 applied no liability had accrued or been incurred in terms of cl. ( e) of the section as there was no assessment of escaped profits before November l, 1956 when the adaptation was made. HELD : (i) The result of the Adaptation of Laws Order 1956 so far as the Act was concerned, was that the provisions of the Act were no longer opplicable or in force in Bellary district. To put it different- ly the Act was repealed so far as the area of Bellltry dIStrict was con- ,c~rned. Repeal of the Act means revocation or abrogation of the Act and s. 6 of the General Clauses Acr applies even in the case of a par- tial repeal, or repeal of part of an Act. [866H; 867A] (ii) The case was covered by s. 6(e) of the General Clauses Act. The liability of an assessee to tax arises immediately at. the end ~f t~e chargeable accounting period and not merely at the ttme when 1t tS quantified. bv assessment proceedings. It followed t~refore that the A B c D E F G H B c n E F G H EKAMBARAPPA v. P..P.T.O, (Rama.swami, J,) 865 notice issued under s. 1 S of the Act was legally va)id and tho "f;P~llants representing the original partners of the firm continued t!> be ta e to be proceeded against under that section for the profits which had escap· ed taxation. [867 E-Fl Wallace Brothers & Co. v. Commissioner of Income-tax, 16 I.T.R. 240 (P.C.), Chatturam Hori/ram Ltd. v. C.l.T., 27 J.T.R. 709. Kalwa Dcvadattwn v. Union of India, 49 J.T,R. !65 and State of Kera/a v, N. Sami Iyer, A.l.R. 1966 S.C. 1415, rehed on. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 185 of 1966. Appeal by special leave from the judgment and order dated March 20, 1962 of the Mysore High Court in Writ Petition No. 109 of 1960. A. K. Sen, R. Ganapathy Iyer and R. Gopa/akrishnan, for the appellants. D. Narsaraju, T. A. Ramachandran and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought, by special leave, from the judgment of the Mysore High Court dated March 20, 1962 dismissing writ petition No. 109 of 1960. The appellants had prayed therein for the grant of writ for quashing a notice dated January 16, 1960 issued by the r
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