RAJPUTANA MINING AGENCIES LTD. versus UNION OF INDIA AND ANOTHER.

Citation: [1961] 1 S.C.R. 453 · Decided: 31-08-1960 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed

Judgment (excerpt)

I S.C.R. SUPREME COURT REPORTS 
453 
RAJPUTANA MINING AGENCIES LTD. 
v. 
UNION OF INDIA AND ANOTHER. 
(S. K. DAS, M. HIDAYATULLAH, K. c. DAS GUPTA, 
J. c. SHAH AND N. RAJAGOPALA AYYANGAR, JJ.) 
Income Tax-Applicability of enactment to Part B States-
Indian Income-tax Act, z922 (.Z:I of z922), as amended by Indian 
Income-tax (Amendff!ent) Act (25 of z953), s. z4(2)(c). 
The appellant, a private limited company, was incorporated 
in 1954 in the former Kotah State which had integrated_ with 
the United States of Rajasthan in 1949· The United ·states of 
Rajasthan became State of Rajasthan, a Part B State. The 
Indian Finance Act, 1950, made 
the Indian Income-tax 
Act, 1922, applicable to Part B States with effect from April ·1, 
1950, whereupon Rajasthan became a taxable territory. The 
Income-tax (Amendment) Act, 1953, amended' s. 14(2)(c) of the 
Indian Income-tax Act, 1922. Thereupon the Income-tax autho-
rities sought to tax the profits and income of the appellant for 
the assessment year 1950-51 who claimed exemption under 
s. 14(2)(c) of the Indian Income-tax Act, 1922, as it stood before 
the amendment in 1953· The question for decision was whether 
in view of t~e decision of this Court in Madan Gopal's case it was 
still ot\en to the appellant to contend that. the amendment 
operated from April l, 1950, and that income accrued prior to 
April. 1, 1950, was still exempt although the exemption was 
withdrawn only from April l, 1950. 
Held, that the withdrawal of the exemption in the assess-
ment year 1950-51 conversely affected the income of the previ-
ous year 1949-50. The application of the Indian Income-tax 
Act made Rajasthan a taxable territory subject to the Indian 
Income-tax law and Parliament was competent to enact a new 
law for the area, just as it did for the whole of the rest of 
India. 
The fiction in the amendment made in s. l4(2)(c) made the 
exemption in respect of liability to tax the income for the year 
1949-50 to disappear as if it ha<l never been granted and obli-
terated the exemption. The whole purpose and intent of the 
amendment was to reach this result from the assessment year 
lcj50-51 onwards, and there could be no saving. The argument 
assumes the premise that the Income-tax Act was incorporated 
in the Indian Finance Act, 1950, but there is neither precedent 
nor warrant for the assumption that when one Act applioo 
another Act to some territory, the latter Act must be taken to 
be incorporated in the former Act. It may be otherwise, if there 
were words to show that the earlier Act is to be deemed to be 
re-enacted by the new Act. 
1960 
. August-31. 
454 
SUPREME COURT REPORTS 
[ 1961] 
1960 
Union of India v. Madan Gopal Kabra, [1954] S.C.R 541, 
referred. 
!t.'ajprllana 1l!iuing 
Agencies Ltd. 
v. 
Union of India 
6- Another 
• Hidoyatullah ]. 
CIVIL APPELLATE 
JURISDICTIO~: 
No. 26 of 1956. 
Ci vii Appeal 
Appeal by Special Leave from the Judgment and 
Order dated the 22nd April, 1954, of the Rajas than 
High Court in Writ Petition X o. 76 of 1951. 
N. C. Chatterjee, J.B. Dadachanji and M. S. K. 
Aiyangar, for the appellants. 
K. N. Rajagopal Sa8tri and D. Gupta, for the res-
pondents. 
1960. August 31. The Judgment of the Court was 
delivered by 
HIDAYATULLAH ,T.-This is an appeal with the 
special leave of this Court against tho 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 tho Indian Income-tax 
Act, 1922, as it stood before the amendment in 1953, 
contonding that the exemption stood good even after 
the amendment. This claim was rejected by tho High 
Court, which was moved under Art. 226 of the Con-
stitution. Hence this appeal. 
Prior to the integration of Kotah 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 Ra.jasthan, there was no such 
law in force in any part of Raja.sthan,' except Bundi 
State. The Indian Finance Act of 1950 ma.do the 
Indian Income-tax Act, 1922, applicable to the whole 
of India, except the State of Jammu and Kashmir, 
and suitably a.mended the Indian Income-tax Act. 
Ra.ja.sthan then became, from April I, 1950, a taxable 
territory. 
For the 

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