LexTHE UNION OF INDIA versus MADAN GOPAL KABRA
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S.C.R. SUPREME COURT REPORTS 541 was obviously necessary and desirable that the change- over frorri the Mysore income-tax law to the Indian Income-tax Act should be in the way provided by sec- tion 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 Cirde, Banga- lore, 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. Agent for the appellant : M. S. K. Sastri. Agent for the respondent : G. H. Rajadhyaksha. THE UNION OF INDIA tJ. MADAN GOPAL KABRA. (PATANJALI SASTRI C.J., MEHR CHAND MAHAJAN, S. R. DAs, GHULAM HASAN and JAGANNAD 0 HADAS JJ.J Indian Income-tax Act (XI of 1922) as amended by Finance Act (XXV of 1950), s. 3-Taxable territories-Meaning of-Section 2 (14-A) proviso ( b) (i) and (iii)-Income accruing to assessee in State of Rajasthan in 1949-50-Liability to income-tax-Sections 3 and 4 of Indian Income-tax Act and s. 2 of Finance Act and proviso to the amended s. 2 (14-A)-Constitution of Indian, Arts. 245 and 246 read with entry 82 of List I of Seventh Schedule-Parliament com- petent to make laws with respect to taxes for the tvho/e of lndia- Constitution competent to make laws having retrospective operation for pre-Constitution period. Respondent was· residing and carrying on business in the District of Jodhpur in Rajasthan, a Part B State. His income arising therein during the accounting year 1949-50 was sought to be assessed to income-tax for the year 1950-51 under the Indian !nCQme-tax Act as amended by the Indian Finance Act. He presented a petition under art. 226 to the High Court praying 1953 D:R. Madhtwa- krishnaiak v. The Income-tax Offim, I Bangalore. '·; PataT/jali Sastri C.J. 1953 Dec. 16. 1953 The Unit1n of India v. Madan GnjJtJl Kabra. 542 SUPREME COURT REPORTS [1954} for the issue of a writ directing the Union of India not to assess income-tax on his income which had accrued to him prior to April 1, 1950, because no income-tax was leviable in Rajasthan (except in the State of Bundi) un<lcr any provision of law in force there. The High Court having accepted his petition, the Union of India preferred the present appeal to the Supreme Court. Section 3 of the Finance Act 1950 (Act XXV of 1950) made certain amend1nents in the Indian Income-tax Act "with t:ffect from the !st day of April, 1950" and substituted therein the present cl. (14-A) in s. 2 in place of previous cl. (14-A) defining "taxable territories". Held, that under sub-cl. (i) of cl. (b) of the proviso, the whole of the territory of India including Rajasthan is to be deemed taxable territory for the purpose of s. 4-A of the Indian In- come-tax Act "as respects any period". The words uany period'~ mean any period before or after March 31, 1950. Respondent Wa< therefore resident in the taxable territories during the accounting year 1949-50 and his income, \vhether derived within or without the taxable territories was taxable under s. 4 sub-s. (I) cl. (b) sub-cl. (ii) of the Indian Income-tax Act. Further, all that s. 2 ( 14-A) does is to define what the ex- pression "taxable territories" means in certain cases and for certain purposes wherever that expression is used in the various provi- sions of the Indian Income-tax Act, and as the expression is used in the charging s. 4 in connection with the conditions which arc to determine liability to tax, sub-cl. (iii) of cl. (b) of the definition must, when read \Vith s. 4 of the Indian Income-tax Act, have reference to chargeability of Income and not merely to its computation, and therefore ss. 3 and 4 of the Indian Income-tax Act read in the light of the definition in proviso (b) to the amended s. 2 (14-A) and s. 2 of the Finance Act, 1950, authorise the imposition of Indian Inco1ne-tax and super-tax on the income derived by the respondent in the year 1949-50 in the territory of Rajasthan. 1-l e!d also, that while it ts true that the Constitution has no retrospective operation, except
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