Issues Involved:
1. Whether the petitioner is entitled to carry forward the loss for a period of six years under the Indian Income-tax Act despite the loss occurring under the Travancore Income-tax Act.
2. Whether the amount of Rs. 15,125-3-0 received by the petitioner from the lessees of the factory is assessable or not.

Issue-Wise Detailed Analysis:

Issue 1: Carry Forward of Losses
The petitioner contended that under section 24(2) of the Indian Income-tax Act, they should be allowed to carry forward the loss of Rs. 4,032 incurred in the assessment year 1123 M.E. for six years. The Income-tax Officer refused this set-off, citing section 32(2) of the Travancore Income-tax Act, which allowed carrying forward the loss only for two years. The Tribunal upheld this decision, stating that the carry-forward of losses should be determined by the law in force when the loss occurred.

The court examined whether the assessment should be governed by the law at the time of assessment or the law in force when the loss occurred. It referenced several cases, including *Commissioner of Income-tax v. Sind Hindu Provident Fund Society* and *Maharajah of Pithapuram v. Commissioner of Income-tax*, which established that the law at the time of the assessment governs the assessment. The court concluded that the Indian Income-tax Act should apply, allowing the petitioner to carry forward the loss for six years.

The court also considered section 3 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, which was argued by the Department to limit the carry-forward period to what was allowed under the Travancore Act. The court rejected this interpretation, stating that the section was intended to preserve larger rights under the state laws, not to curtail the rights under the Indian Act. Thus, the petitioner was entitled to carry forward the loss for six years.

Issue 2: Assessability of Rs. 15,125-3-0
The petitioner received Rs. 15,125-3-0 from the lessees for breach of clauses 14 and 16 of the lease deed. The Income-tax Officer treated this amount as income, while the petitioner argued it was a capital receipt.

Clause 14 stipulated that the lessees should not compete with the lessors during the lease and for three years after its expiration, with a penalty of Rs. 10,000 for breach. Clause 16 imposed a penalty of Rs. 10,000 for discontinuing the lease before the agreed period. The petitioner credited Rs. 7,075-1-6 and Rs. 8,050-1-6 for breaches of clauses 14 and 16, respectively.

The court examined the nature of the receipts. It referenced *Commissioner of Income-tax v. South Indian Pictures Limited*, which distinguished between capital and revenue receipts based on the nature of the transaction. The court concluded that the damages under clause 16 were capital receipts because they compensated for the termination of the lease, which was the main structure of the petitioner's business. Conversely, the damages under clause 14 were revenue receipts as they related to non-competition agreements, which are part of the ordinary business.

The court also addressed the Tribunal's doubts about the arbitration and the allocation of damages. It found no basis for these doubts as the Department had not disputed the arbitration or the allocation at any stage.

Separate Judgments:
The court delivered a unified judgment without separate opinions from different judges.

Conclusion:
1. The petitioner is entitled to carry forward the loss for six years under the Indian Income-tax Act.
2. Out of Rs. 15,125-3-0 received, Rs. 8,050-1-6 is not assessable (capital receipt), and Rs. 7,075-1-6 is assessable (revenue receipt).

The Department was directed to pay two-thirds of the petitioner's costs, with an advocate's fee of Rs. 100.

Issues Involved:
1. Refund of sales tax deposited on forward transactions.
2. Applicability and effect of Section 8-A(4) of the U.P. Sales Tax Act.
3. Competence of the U.P. Legislature to enact Section 8-A(4).

Detailed Analysis:

1. Refund of Sales Tax Deposited on Forward Transactions:
The core issue revolves around whether sales tax paid on forward transactions, which were later declared ultra vires, is refundable. The court examined multiple scenarios:
- Dealers paying from their own pockets without recovering from customers: The tax is refundable as there are no circumstances that would disentitle the dealer from claiming the refund.
- Taxes debited in accounts but not recovered from customers: The tax is refundable under the same logic as above.
- Taxes actually recovered from customers: The court held that the tax is refundable even if it was recovered from customers. The Supreme Court's interpretation of Section 72 of the Indian Contract Act supports this, stating that money paid by mistake, either of fact or law, is recoverable. The court emphasized that equitable considerations do not override the clear provisions of Section 72.

2. Applicability and Effect of Section 8-A(4) of the U.P. Sales Tax Act:
The court addressed whether Section 8-A(4) requires dealers to deposit amounts realized as tax on transactions that are not actual sales:
- Interpretation of "as tax on sale of any goods": The court concluded that Section 8-A(4) applies only to amounts realized as tax on actual sales, not on transactions mistakenly treated as sales. Since forward transactions were not sales, amounts collected as tax on such transactions do not fall under Section 8-A(4).
- Legal implications: The court rejected the argument that dealers must deposit these amounts in the treasury, as the provision does not apply to ultra vires transactions.

3. Competence of the U.P. Legislature to Enact Section 8-A(4):
While the court did not need to express an opinion on the legislative competence, it implied that the provision's applicability was moot given the primary interpretation that forward transactions were not sales and thus not subject to the disputed section.

Conclusion:
The court answered the re-formulated questions affirmatively, determining that:
- Taxes on forward transactions are refundable regardless of whether they were recovered from customers.
- Section 8-A(4) of the U.P. Sales Tax Act does not apply to amounts realized as tax on forward transactions.
- No period of limitation exists for claiming such refunds under the U.P. Sales Tax Act.

The Commissioner, Sales Tax, U.P., was ordered to pay the costs of the assessee, assessed at Rs. 500. References were answered accordingly.

Issues:
Jurisdiction of District Court to entertain application under section 75(4) of the Companies Act, 1956.

Analysis:
The revision petition involved an application by a private limited company to the District Court of Coimbatore under section 75(4) of the Companies Act, 1956, seeking condonation of delay in filing a statement regarding the allotment of shares. The company had allotted shares on 6th April, 1956, but failed to file the statement within the prescribed time. The Registrar supplied the necessary form on 12th July, 1956, and the company filed the statement on 20th July, 1956, beyond the deadline of one month from the allotment date as per section 75(1)(a) of the Act. The District Court initially declined jurisdiction to entertain the application, citing that no notification had been issued empowering it to exercise jurisdiction under the new Act.

The District Court's reasoning was based on the provisions of section 10 of the Companies Act, 1956, which stipulates that the High Court has jurisdiction unless otherwise conferred on a District Court by the Central Government through notification. As no such notification was issued post the enactment of the new Companies Act, the District Court of Coimbatore was deemed to lack jurisdiction under the new Act. However, it was noted that under the Companies Act of 1913, the District Court had jurisdiction similar to that under section 10 of the new Act. The petitioner relied on section 645 of the Companies Act, 1956, which saves certain orders and proceedings under the old Act, but the Court found it difficult to apply this provision to the present case.

The judgment referred to section 24 of the General Clauses Act X of 1897, which states that any appointment or notification made under a repealed Act continues in force unless inconsistent with the re-enacted provisions. It was argued that a government notification from 1947, conferring jurisdiction on District Courts, should be deemed to continue under the new Act of 1956. As section 75 of the new Act was not an excepted section under the relevant provisions, the District Court was held to have jurisdiction to entertain the petitioner's application. Consequently, the civil revision petition was allowed, the District Judge's order was set aside, and the application was directed to be restored for proper disposal without any costs imposed.

Issues Involved:
1. Whether the High Court has the power to revoke, review, recall, or alter its own earlier decision in a criminal revision and rehear the same.
2. The circumstances under which such power can be exercised.

Detailed Analysis:

Issue 1: Whether the High Court has the power to revoke, review, recall, or alter its own earlier decision in a criminal revision and rehear the same.

The primary question addressed is whether the High Court has the power to review its own decisions in criminal revisions. It is acknowledged that no specific section in the Code of Criminal Procedure (CrPC) grants such power explicitly. However, the inherent power of the High Court is preserved by Section 561-A of the CrPC, which states that "nothing in this Code shall be deemed to limit or affect the inherent power of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any court or otherwise to secure the ends of justice."

The judgment clarifies that Section 561-A does not confer new powers but preserves the inherent powers the Court already possessed. These inherent powers can only be exercised in areas not covered by specific provisions of the CrPC. The inherent power is limited to ensuring that the ends of justice are met and cannot be invoked if it contradicts any specific provision of the CrPC.

The judgment references several cases, including Emperor v. K. Nazir Ahmad and Talab Haji Hussain v. Madhukar Purshottam, to emphasize that inherent powers are supplementary to the specific powers conferred by the CrPC and operate only in fields not covered by the specific provisions.

Issue 2: The circumstances under which such power can be exercised.

The judgment discusses the scope and nature of the inherent powers of the High Court. It is established that inherent power can be exercised for three specific purposes mentioned in Section 561-A:
1. To give effect to any order under the CrPC.
2. To prevent abuse of the process of any court.
3. To secure the ends of justice.

The Court examines various sections of the CrPC, including Sections 369, 424, and 430, to determine whether they cover the inherent power to review. Section 369 states that no court, once it has signed its judgment, shall alter or review the same except to correct a clerical error. However, this section applies primarily to trial courts and not to appellate or revisional courts.

The judgment also refers to Jairam Das v. Emperor and U. J. S. Chopra v. State of Bombay to highlight that the principle of finality applies to judgments in both appellate and revisional jurisdictions. The inherent power to review is not explicitly barred by Section 430, which deals with the finality of orders on appeal.

The Court concludes that while the High Court has no inherent power to review a judgment passed in its purely appellate jurisdiction, it does possess inherent power to review judgments in its revisional jurisdiction in exceptional circumstances where it is necessary to secure the ends of justice.

The judgment references several cases where the High Court exercised its inherent powers under Section 561-A, including Sri Ram v. Emperor, Chandrika v. Rex, Mohammad Wasi v. The State, and Ram Dass v. The State. These cases demonstrate that the High Court has exercised its inherent power to correct errors, secure the ends of justice, and prevent abuse of the process of the court.

The judgment also discusses the views of other High Courts and the Supreme Court on the matter. It references Queen v. Godai Raout, Queen Empress v. Durga Charan, and Govind Sahai v. Emperor, among others, to show that the inherent power to review was accepted by various High Courts even before the introduction of Section 561-A in 1923.

In conclusion, the judgment affirms that the High Court has the inherent power to revoke, review, recall, or alter its own earlier decision in a criminal revision and rehear the same. This power is to be exercised sparingly, carefully, and with caution, only in exceptional circumstances where it is necessary to give effect to any order under the CrPC, prevent abuse of the process of any court, or secure the ends of justice.

Issues Involved:
1. Legality of the ruling excluding the 8th defendant's proxy from voting.
2. Jurisdiction of the civil court to entertain the suit.
3. Plaintiffs' right to maintain the present suit.
4. Validity of the resolutions passed at the annual general meeting on 22-7-1957.

Detailed Analysis:

1. Legality of the Ruling Excluding the 8th Defendant's Proxy from Voting:

The plaintiffs argued that the exclusion of the 8th defendant's proxy from the annual general meeting on 22-7-1957 was illegal and ultra vires. The 8th defendant had been recorded as a shareholder and had exercised his voting rights through a proxy in previous meetings. The ruling by the 4th defendant, based on Section 153 of the Companies Act, which states that no notice of any trust shall be entered on the register of members, was deemed incorrect. The court found that the provisions of the Official Trustees Act, particularly Sections 6 and 14, clearly allowed the Official Trustee to be entered in the company's register and to exercise voting rights either in person or by proxy. Therefore, the ruling of the 4th defendant was legally incorrect and could not be sustained.

2. Jurisdiction of the Civil Court to Entertain the Suit:

The defendants contended that the plaintiffs should seek remedies under the Companies Act, such as approaching the Central Government or the Company Court, rather than filing a suit in a civil court. However, the court held that the civil court had jurisdiction to entertain the suit. The court noted that the remedies provided under Sections 166, 167, 169, and 186 of the Companies Act were not applicable to the circumstances of this case. The court emphasized that the reliefs sought by the plaintiffs, such as declaring the resolutions passed at the meeting null and void, could only be granted by a civil court.

3. Plaintiffs' Right to Maintain the Present Suit:

The court recognized that the 8th defendant had a cause of action to challenge the proceedings that negated his right to vote by proxy. The plaintiffs argued that they had been deprived of their legal rights due to the wrongful exclusion of the 8th defendant's proxy. The court agreed with the plaintiffs, stating that the action complained of was ultra vires the company's powers and constituted a fraud on the minority shareholders. The court cited several precedents, including the rule in Foss v. Harbottle, and recognized exceptions to the rule, such as acts that are ultra vires, fraudulent, or illegal, which justified the plaintiffs' right to maintain the suit.

4. Validity of the Resolutions Passed at the Annual General Meeting on 22-7-1957:

The court examined whether the resolutions passed at the annual general meeting on 22-7-1957 were valid. The plaintiffs contended that the exclusion of the 8th defendant's proxy rendered the proceedings illegal and void. The court found that the meeting was properly called and held, but the subsequent exclusion of the proxy was illegal, affecting the validity of the resolutions passed. The court declared the proceedings and decisions of the meeting null and void, illegal, and ultra vires. The court also issued a mandatory order to convene a fresh meeting to consider the agenda items from the disputed meeting.

Conclusion:

The court confirmed the decrees and judgments of the lower courts, recognizing the plaintiffs' right to maintain the suit and the civil court's jurisdiction to entertain it. The ruling excluding the 8th defendant's proxy was deemed illegal, and the resolutions passed at the meeting were declared null and void. The court ordered a fresh meeting to be held and appointed a receiver to manage the company until a proper board was constituted.

Issues Involved:
1. Whether the payment of Rs. 1,25,000 to the managing agents constituted an item of capital expenditure.
2. If it was an item of revenue expenditure, whether it was incurred wholly and exclusively for the purposes of the assessee's business.

Issue-wise Detailed Analysis:

1. Capital Expenditure vs. Revenue Expenditure:

The primary issue was whether the payment of Rs. 1,25,000 to the managing agents was a capital expenditure or a revenue expenditure. The court referred to the Supreme Court's approach in Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax, stating, "The aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure." The court emphasized that the payment was made to secure the termination of a recurring liability, specifically the managing agency's remuneration and commission, and not to bring in any capital asset. The judgment noted, "It was not intended to bring in any capital asset; nor did it result in the acquisition of any capital asset. It was not an item of capital expenditure which section 10(2)(xv) of the Act excludes."

The court cited several precedents, including Nevill and Co., Ltd. v. Federal Commissioner of Taxation and Noble Ltd. v. Mitchell, to support the view that payments made to terminate a disadvantageous trading relationship or to continue business operations unfettered by previous obligations are considered revenue expenditures. The judgment concluded, "To adapt the words of the learned Master of the Rolls it was a payment made in the course of business, dealing with a particular situation which arose in the course of the year, and was made not in order to secure a capital asset to the company but to enable them to continue as they had in the past, carry on the same type and high quality of business."

2. Expenditure Incurred Wholly and Exclusively for Business Purposes:

The second issue was whether the expenditure was incurred wholly and exclusively for the business purposes of the assessee. The Tribunal initially found that the reasons for the payment were not motivated by commercial considerations and thus were not wholly and exclusively for business purposes. However, the High Court disagreed, stating, "The viewpoint is that of business expediency, what a normally prudent businessman could be expected to do in good faith." The court highlighted that the arrangement was made to benefit the company by freeing it from the managing agency's financial obligations, which was in the company's best interests. The judgment emphasized, "Judged by the test of business expediency, it seems clear to us that the amount was expended wholly and exclusively for the business of the assessee company."

The court also addressed the Tribunal's inference that Smith intended to retire from India without compensation, stating, "We are unable to find on what basis the Tribunal came to the conclusion, that Smith, contemplated complete retirement from business and without compensation." The court found that the payment was reasonable and necessary for the company's business operations, concluding, "In our opinion the only conclusion possible on the material on record is that this amount of Rs. 1,25,000 was expended by the assessee company in the relevant year of account wholly and exclusively for its business."

Conclusion:

The court answered the reference in favor of the assessee, stating, "Our answer to the question is that the payment is deductible under the provisions of section 10(2)(xv) of the Act." The assessee was entitled to the costs of the reference, with counsel's fee fixed at Rs. 250. The judgment provided a comprehensive analysis of the legal principles involved, ensuring that the expenditure was correctly classified and justified as a deductible business expense.

Issues:
Determining profit from a land sale transaction to a partnership firm.

Analysis:
The judgment revolves around the assessment of profit arising from the sale of land by the assessee to a partnership firm. The assessee initially contracted to purchase the land for a certain amount and later formed a partnership to develop and sell the land. The partnership firm agreed to purchase the land at a higher price. The Income Tax Officer treated the difference between the purchase price and the selling price as the profit of the assessee.

The Tribunal had conflicting opinions on the matter. The Judicial Member believed no profit accrued to the assessee due to his major share in the partnership and questioned the valuation of the land. The Accountant Member, however, concluded that the profit realized by the assessee was the full difference in prices.

A third Member of the Tribunal was appointed to resolve the dispute. The third Member determined that the land was indeed sold at the higher price and calculated the profit "on paper" to be a specific amount. The third Member also emphasized the indivisibility of the partnership and the assessee's profit share.

The High Court upheld the view that the profit accrued to the assessee was the full difference between the purchase and selling prices. The Court rejected the third Member's suggestion to stagger the assessment of the profit over multiple years, emphasizing the legal validity of the transaction and the straightforward calculation of profit.

In conclusion, the Court held that the profit accrued to the assessee from the land sale transaction to the partnership firm was the full difference in prices. The Court did not delve into the second question raised regarding the assessment methodology, as the first question was resolved decisively in favor of the revenue authorities.

Issues:
1. Whether the assessee can be said to be carrying on business and entitled to registration under section 26ARs.

Detailed Analysis:
The case involved a joint Hindu family that partitioned some properties and entered into a partnership agreement. The partnership, named Messrs. Ramniklal Sunderlal, derived income from the partitioned properties. However, the Income-tax Department refused registration for the assessment year 1953-54, claiming the partnership did not carry on any business and assessed the income under section 12 of the Act. The Appellate Assistant Commissioner and the Tribunal upheld this decision, leading the assessee to appeal to the High Court.

The primary issue before the court was whether the partnership was indeed carrying on a business and thus eligible for registration under section 26A. The partnership agreement included provisions for income division and specified that the father would handle certain business aspects with the consent of other partners. The counsel for the assessee argued that the partnership involved multiple plots of land leased to mills, incurring expenses for managing the business, such as maintaining a motor car and paying telephone charges. Additionally, in a previous assessment year, the assessee was assessed for income from speculation in shares.

The court examined the partnership agreement and emphasized that while there was an agreement and an element of agency, the crucial factor of carrying on a business was missing. The court highlighted that the Partnership Act defines a partnership based on three key elements: agreement, actual business operations, and agency. Mere ownership and income-sharing from property do not automatically constitute a partnership. The court referenced the English Partnership Act's stance that joint ownership alone does not create a partnership, emphasizing the need for a genuine business activity.

The court further discussed the distinction between co-ownership and partnership, emphasizing that the intention and actions of the parties determine the existence of a partnership. Quoting a case precedent, the court noted that engaging in activities for profit constitutes a business. However, in the present case, the court found no evidence of a genuine business being conducted by the assessee, his wife, and sons as per the partnership agreement.

Ultimately, the court concluded that the assessee was not carrying on a business and thus was not entitled to registration under section 26A. The court dismissed the appeal and ordered the assessee to pay the costs, providing a detailed analysis of the lack of business activities despite the partnership agreement's existence.

Issues:
Interpretation of Tribunal's order regarding the scope of inquiry by the Appellate Assistant Commissioner. Jurisdiction of the Tribunal to pass an order empowering the Appellate Assistant Commissioner to enhance the assessment. Finality of the Appellate Assistant Commissioner's order in light of the Tribunal's decision.

The judgment concerns a dispute between the assessee, a firm, and the tax authorities regarding the grant of relief under section 25(4) in the assessment year 1950-51. The Income-tax Officer granted relief for income tax but denied relief for super-tax, citing non-payment for specific years. The Appellate Assistant Commissioner dismissed the appeal solely on the ground that a registered firm could not claim super-tax relief. The Tribunal reversed this decision, directing a reconsideration of the super-tax relief claim. The Appellate Assistant Commissioner, upon rehearing, not only assessed super-tax relief but also delved into the issue of business discontinuance in 1933, leading to the withdrawal of income tax relief. The Tribunal clarified its direction to the Appellate Assistant Commissioner, emphasizing a limited scope of inquiry into super-tax relief only.

The primary issue revolves around interpreting the Tribunal's order directing the Appellate Assistant Commissioner to dispose of the appeal "on its merits." The Tribunal's directive was to focus solely on the claim for super-tax relief under section 25(4) and not extend the inquiry to other aspects. Despite a broad interpretation suggested by the Revenue, the Tribunal's order, when read in context, indicates a restricted scope of inquiry limited to super-tax relief. The Tribunal's intent was clear in confining the Appellate Assistant Commissioner's jurisdiction to the specific issue of super-tax relief, excluding a comprehensive review of the entire appeal.

Another crucial issue pertains to the Tribunal's authority to empower the Appellate Assistant Commissioner to enhance the assessment. The Tribunal's order vacating the Appellate Assistant Commissioner's decision and restoring the appeal was misconstrued as granting unfettered powers to reassess the entire matter. However, the Tribunal's direction was specific to reconsidering the super-tax relief claim, without extending to enhancing the assessment or revisiting settled issues. The Tribunal's power was limited to directing a focused review on the merits of the super-tax relief claim, not a general reassessment.

The final issue addresses the finality of the Appellate Assistant Commissioner's initial order in light of the Tribunal's decision. While the assessee contended that the Appellate Assistant Commissioner's order on income tax relief had attained finality before the Tribunal's intervention, the Tribunal's authority to modify or set aside previous decisions was acknowledged. The Tribunal's directive to revisit the super-tax relief claim did not nullify the settled aspects of the appeal, emphasizing a targeted review rather than a comprehensive reevaluation. The Tribunal's order did not grant the Appellate Assistant Commissioner unrestricted powers to revisit all aspects of the appeal, maintaining the limited scope set by the Tribunal.

In conclusion, the High Court clarified the interpretation of the Tribunal's order, affirming the restricted scope of inquiry for the Appellate Assistant Commissioner regarding super-tax relief. The Tribunal's authority was limited to directing a focused review on specific issues without granting powers to enhance the assessment. The finality of previous decisions was preserved, with the Tribunal's intervention aimed at addressing specific claims rather than reopening settled matters. The judgment underscores the importance of adhering to the precise directives of the Tribunal and maintaining the delineated scope of review in tax appeals.

Issues Involved:
1. Definition and scope of "business connection" under Section 42(1) of the Income-tax Act.
2. Determination of whether there was a business connection between the assessee and the Indian company.
3. Assessment of income attributable to the business connection.
4. Applicability of the proviso to sub-section (3) of Section 42.

Issue-wise Detailed Analysis:

1. Definition and Scope of "Business Connection" under Section 42(1):

The Court examined the term "business connection" as used in Section 42(1) of the Income-tax Act, which deems income accruing to an assessee directly or indirectly through any business connection in the taxable territories to be income arising in those territories. The Court noted that "business connection" is an expression that has not been definitively defined by any court, and its determination depends on the facts of each case. The Court emphasized that the term is of wide and indefinite import and that the Legislature has deliberately avoided defining it due to the diverse and infinite nature of business dealings.

2. Determination of Whether There Was a Business Connection:

The Court analyzed the agreement between the assessee (Evans Medical Supplies Ltd., UK) and the Indian company (Evans Medical Supplies (India) Ltd., referred to as "Indco"), dated April 1, 1947. The agreement appointed Indco as the sole authorized agent in India and Burma, with provisions for commissions, advertising allowances, and restrictions on Indco's dealings with other products. The Tribunal had found that there was no business connection in respect of goods sold and supplied directly to the Indian company under clause 10 of the agreement. However, the Court disagreed with the Tribunal's approach, emphasizing that the nature of the dealings between the assessee and the Indian company indicated a business connection. The Court noted that the Indian company acted as the sole authorized agent and was obligated to spend the entire advertising and propaganda allowance on the assessee's products, which indicated a continuous and significant relationship.

3. Assessment of Income Attributable to the Business Connection:

The Court held that the income attributable to the sale of goods by the assessee to the Indian company accrued to the assessee through the business connection. The Court emphasized that the expression "business connection" requires a business in India, a connection between the assessee and that business, and income earned directly or indirectly through that connection. The Court found that the assessee had a business connection with the Indian company, as the Indian company acted as the sole authorized agent, received commissions and allowances, and was restricted from dealing with other products. The Court concluded that the profits accruing to the assessee from the sales to the Indian company were attributable to this business connection.

4. Applicability of the Proviso to Sub-section (3) of Section 42:

The assessee argued that even if there was a business connection, no profits were liable to be assessed on a deemed accrual basis because all operations connected with the sales were performed outside the taxable territories. The Tribunal had accepted this contention, but the Court did not address this issue in detail, as it was not the primary question referred to the Court. The Court noted that the Tribunal's acceptance of the second contention was based on its acceptance of the first contention, which the Court had already rejected.

Conclusion:

The Court answered the referred question in the affirmative, holding that there was a business connection in the taxable territories within the meaning of Section 42(1) in regard to the goods sold outside the taxable territories by Evans Medical Supplies Ltd., Liverpool, to Evans Medical Supplies (India) Ltd. The assessee was ordered to pay the costs, and the reference was answered in the affirmative.

Issues Involved:
1. Whether interest paid on borrowed capital for purchasing shares that did not yield dividend income can be set off against other income under section 24(1) of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Nature of Investment and Borrowing:
The assessee, a private limited company, purchased shares in Gannon Dunkerley & Co. Ltd. for approximately Rs. 52 lakhs, borrowing Rs. 36 lakhs from the Empire of India Life Assurance Co. Ltd. These shares were pledged as security for the loan. Additional unsecured loans amounted to Rs. 13.5 lakhs. The Tribunal found that the investment was not a business venture but served the interests of some interested parties. The Tribunal held that if income from the shares was included in the assessee's assessment, the interest paid should be allowed as a deduction. The Tribunal stated, "We are unable to understand the stand taken by the Department that as dividend income is deemed to have accrued to the assessee, interest cannot be allowed."

2. Tribunal's Findings:
The Tribunal concluded that the investment in shares was capital investment, and there could be no question of ascertaining a minus income from that source. It observed, "If any dividend income is included in the appellant's assessment, the interest should be allowed against such dividend income." The Tribunal also noted that the assessee did not have sufficient capital to possess the shares, indicating that the shares were held for the convenience of a third party.

3. Legal Question:
The primary legal question referred to the High Court was: "Whether on the facts and in the circumstances of the case, interest paid on moneys borrowed for the purchase of shares in Gannon Dunkerley & Co. Ltd., which did not yield any dividend income, could be set off against other income under section 24(1) of the Income-tax ActRs."

4. Arguments Presented:
The assessee's counsel argued that under section 24(1), losses under any head of income should be set off against other heads of income. They relied on section 12(2), which allows for deductions of expenditure incurred solely for earning income, profits, or gains, even if no income was actually earned. The counsel cited the Supreme Court's observation in Eastern Investment Co. Ltd. v. Commissioner of Income-tax, which stated, "It is not necessary to show that the expenditure was a profitable one or that in fact any profit was earned."

5. Department's Stand:
The Department contended that the purpose of the borrowing was not to earn income but to serve the convenience of interested parties. They argued that the Tribunal's findings were conclusive and that the interest payment could not be set off against other income as the shares did not yield any dividend income.

6. High Court's Analysis:
The High Court analyzed the Tribunal's findings and the legal provisions. It noted that the Tribunal had mixed up the concept of the purpose of the purchase of shares with the motive behind the purchase. The Court emphasized that under section 12(2), the purpose of the expenditure should be to earn income, profits, or gains, regardless of whether income was actually earned. The Court stated, "There is considerable force in the argument presented on behalf of the assessee."

7. Conclusion:
The High Court concluded that the Tribunal had erred in its interpretation by giving overriding effect to the motive behind the purchase rather than the purpose. The Court held that the interest paid on borrowed capital for purchasing shares, even if they did not yield dividend income, could be set off against other income under section 24(1). The Court answered the question in the affirmative and directed the Commissioner to pay the costs.

Judgment:
The High Court answered the question in the affirmative, allowing the interest paid on borrowed capital for the purchase of shares to be set off against other income under section 24(1) of the Income-tax Act. The Commissioner was directed to pay the costs.

Issues:
Interpretation of excess profits tax law in Baroda State for the assessment year 1949-50 and previous years; Taxability of interest on securities received by the assessee; Entitlement of the assessee to credit for tax under specific provisions.

Analysis:
The judgment revolves around the assessment of excess profits tax for the assessee, Shree Ambica Mills Ltd., in connection with the Excess Profits Ordinance, 1943 in Baroda State. The primary issue was whether a sum received by the assessee, which the Department sought to tax, constituted interest on securities. The Tribunal found that the sum did not represent interest on securities in the hands of the assessee, leading to the present reference.

The first question raised was whether the sum in question was assessable as interest on securities under the relevant tax provisions. The argument centered on the ownership of the securities and the entitlement to interest. The court held that the securities belonged to the Excess Profits Fund, not the assessee, and the interest earned was not the income of the assessee under the head of "Interest on Securities." Thus, the first question was answered in the negative.

The second question addressed the entitlement of the assessee to any credit for tax under specific provisions. The court emphasized that the assessee was not legally or beneficially interested in the securities held by the Fund, dismissing the contention that the Fund acted as a bare trustee for the assessee. Consequently, the second question was also answered in the negative.

In conclusion, the court dismissed the notice of motion taken out by the assessee and directed the assessee to pay the costs. The judgment clarified the tax treatment of the sum in question, emphasizing the legal ownership of the securities and the absence of entitlement to interest for the assessee.

Issues Involved:
1. Whether there was any legal admissible evidence to justify the Tribunal's finding that the transaction in question was not the transaction of the assessee.
2. Whether the assessee can claim the set-off of such loss, although it is the loss of an unregistered partnership.

Detailed Analysis:

Issue 1: Legal Admissible Evidence for Tribunal's Finding
The Tribunal and Income-tax authorities disallowed the assessee's claim of Rs. 1,05,641 loss arising from a joint venture with Damji Laxmidas, asserting that the transaction was not genuine and was not the business of the assessee. The Tribunal emphasized that the ankdas (transaction records) were in the name of Damji Laxmidas, not the assessee firm. The Tribunal also noted that the assessee's claim was based on an eight annas share, contrary to the ten annas share stated in the partnership deed.

The Tribunal's finding was primarily based on the fact that the ankdas were in the name of Damji Laxmidas. However, the court observed that the partnership agreement allowed for the business to be conducted either in the name of the group of four partners or Damji Laxmidas. The court concluded that there was no legal evidence to support the Tribunal's finding that the transactions were not of the assessee.

Issue 2: Set-off of Loss from Unregistered Partnership
The court examined whether a partner in an unregistered firm can claim to set off his share of the losses against other business income when the unregistered firm has not been assessed. The assessee argued that there is no provision in the Income-tax Act mandating that an unregistered firm must be assessed before any claim for set-off of its losses can arise. The court reviewed sections 10, 23(5), and 24 of the Income-tax Act, highlighting that an assessee who carries on multiple businesses can set off losses from one source against profits from another under the same head.

The court noted that section 23(5)(b) allows the Income-tax Officer to treat an unregistered firm as if it were registered for tax purposes. If the unregistered firm incurs a loss, the partner can claim a set-off against his other business income. The second proviso to section 24(1) states that losses of an unregistered firm not assessed under section 23(5)(b) can only be set off against the firm's income, not the partner's other income.

However, the court pointed out that if the Income-tax Officer does not assess the unregistered firm's losses, the individual partner can still claim a set-off against his other business income. The court emphasized that there is no legal requirement for an unregistered firm to be assessed for a partner to claim a set-off for his share of the losses.

The court referred to the decisions in J.C. Thakkar v. Commissioner of Income-tax and Jamnadas Daga v. Commissioner of Income-tax, which supported the view that a partner can be assessed on his share of profits or losses in an unregistered firm even if the firm itself has not been assessed.

The court rejected the Revenue's argument that the assessee firm should be treated as an unregistered firm consisting of four partners, noting that the Department and Tribunal had proceeded on the basis that the assessee firm and Damji Laxmidas had entered into a partnership.

The court concluded that the assessee can claim a set-off for its share of the loss in an unregistered firm if the Income-tax authorities do not determine the firm's loss and bring it to tax as per section 23(5)(b).

Conclusion:
The court answered the first issue by stating that there was no legal evidence to justify the Tribunal's finding that the transaction was not of the assessee. For the second issue, the court held that the assessee can claim a set-off for its share of the loss in an unregistered firm if the Income-tax authorities do not assess the firm's loss.

Issues Involved:
1. Limitation period for issuing a notice under Section 34 of the Income-tax Act.
2. Validity of the finding by the Appellate Assistant Commissioner regarding the assessment year for the sum of Rs. 20,000.
3. Jurisdiction of the Income-tax Officer to act based on the finding of the Appellate Assistant Commissioner.

Issue-wise Detailed Analysis:

1. Limitation Period for Issuing a Notice under Section 34 of the Income-tax Act:
The petitioner argued that the proceedings initiated by the Additional Income-tax Officer were barred by limitation. The contention was that if the notice was issued under Section 34(1)(b) of the Act, it should have been issued within four years from the end of the assessment year, i.e., on or before March 31, 1950. The second proviso to sub-section (3) of Section 34, amended by Central Act XXV of 1953, came into force on April 1, 1952. Before this date, any action under Section 34(1)(b) was time-barred, as held in Prashar v. Vasantsen Dwarkadas [1956] 29 ITR 857.

The petitioner further argued that if the notice was issued under Section 34(1)(a), it should have been issued within eight years from the end of the assessment year, i.e., before April 1, 1954, since the income that escaped assessment was less than one lakh of rupees. This was supported by the case Hiralal Amritlal Shah v. K.C. Thomas, Income-tax Officer [1958] 34 ITR 446, which held that no notice of re-assessment could be issued after eight years, even if there was a finding or direction by an Income-tax authority.

The court explained that Section 34 deals with cases where income has escaped assessment, categorized into two types:
- Section 34(1)(a) for cases where the escape is due to the assessee's failure to disclose material facts, with different limitation periods based on the amount of income.
- Section 34(1)(b) for other cases, with a four-year limitation period.

The second proviso to sub-section (3) of Section 34 abrogates the period of limitation for actions taken in consequence of a finding or direction by specified authorities. The court found that the Department was taking action under Section 34(1)(a) and hence, the plea of limitation was overruled.

2. Validity of the Finding by the Appellate Assistant Commissioner:
The petitioner contended that there was no finding by the Appellate Assistant Commissioner that the amount of Rs. 20,000 should be assessed in the year 1945-46. The court referred to Indurkar v. Pravinchandra Hemchand [1958] 34 ITR 397, where a similar issue was discussed. However, in the present case, the Appellate Assistant Commissioner had clearly recorded a finding that the sum of Rs. 31,000 represented income from undisclosed sources and accepted the contention that Rs. 20,000 should be assessed in the assessment year 1945-46, following a judgment of the Patna High Court. This was considered a clear finding falling within the second proviso to Section 34(3).

3. Jurisdiction of the Income-tax Officer to Act Based on the Finding of the Appellate Assistant Commissioner:
The petitioner argued that the finding by the Appellate Assistant Commissioner was not necessary and referred to Indira Balakrishna v. Commissioner of Income-tax [1956] 3 ITR 320. The court found that the findings were not gratuitous as the points were raised by the petitioner himself. The court also rejected the argument that the finding could only be used for the assessment year in which the decision was given, stating that such a construction would render the proviso otiose.

The court concluded that the Income-tax Officer had jurisdiction to act on the finding of the Appellate Assistant Commissioner. The writ of prohibition sought by the petitioner could not be issued, and the petition was dismissed with costs.

Conclusion:
The court dismissed the petition, holding that the proceedings initiated by the Additional Income-tax Officer were not barred by limitation, the finding by the Appellate Assistant Commissioner was valid and applicable, and the Income-tax Officer had the jurisdiction to act on this finding.

Issues Involved:
1. Whether the sum of Rs. 26,000 received by the appellant on April 22, 1950, is dividend as defined in section 2(6A)(c) of the Indian Income-tax Act, 1922.
2. Interpretation of "six previous years" in section 2(6A)(c) of the Act.
3. Applicability of the definition of "previous year" from section 2(11) of the Act to section 2(6A)(c).
4. Whether the Mewar Industries Ltd. qualifies as a "company" under section 2(5A) of the Act.

Detailed Analysis:

1. Whether the sum of Rs. 26,000 received by the appellant on April 22, 1950, is dividend as defined in section 2(6A)(c) of the Indian Income-tax Act, 1922:
The primary issue in this appeal is to determine if the Rs. 26,000 received by the appellant qualifies as a dividend under section 2(6A)(c) of the Act. The Income-tax Officer, the Appellate Assistant Commissioner, and the Appellate Tribunal all concluded that the amount is taxable as dividend. The High Court of Rajasthan affirmed this view, leading to the present appeal.

2. Interpretation of "six previous years" in section 2(6A)(c) of the Act:
The appellant contended that the profits distributed by the liquidator did not accumulate within the "six previous years" preceding the liquidation, as defined by section 2(11) of the Act. The appellant argued that since the Indian Income-tax Act came into force in Rajasthan on April 1, 1950, there was no "previous year" before this date, and hence, the distributed sum should not be considered a dividend.

3. Applicability of the definition of "previous year" from section 2(11) of the Act to section 2(6A)(c):
The court considered whether the definition of "previous year" in section 2(11) should apply to section 2(6A)(c). The appellant argued that according to well-established rules of construction, the definition in section 2(11) should govern unless repugnant to the context. The court found that applying the definition from section 2(11) would be repugnant in this context, as it would be contradictory to speak of "six previous years" in relation to a single assessment year. The court concluded that the term "six previous years" in section 2(6A)(c) refers to six consecutive accounting years preceding the liquidation.

4. Whether the Mewar Industries Ltd. qualifies as a "company" under section 2(5A) of the Act:
The appellant attempted to argue that Mewar Industries Ltd. was not a "company" as defined in section 2(5A) of the Act, as the Indian Companies Act came into operation in Udaipur territory only on April 1, 1951. However, this issue was not referred to the High Court under section 66(1) of the Act and was not dealt with by the Tribunal, making it inadmissible at this stage. Additionally, whether Mewar Industries Ltd. qualifies as a "company" involves disputed facts that cannot be resolved in this appeal.

Conclusion:
The court held that the sum of Rs. 26,000 received by the appellant on April 22, 1950, was indeed a dividend as defined in section 2(6A)(c) of the Act and is chargeable to tax. The appeal was dismissed with costs.

Issues Involved:
1. Whether the spinning and weaving departments constituted one business or two separate businesses.
2. Whether the exclusion of the value of the building, plant, machinery, and electric fittings of the weaving department was in accordance with Schedule II, rule 1, of the Excess Profits Tax Act.

Detailed Analysis:

1. Whether the spinning and weaving departments constituted one business or two separate businesses:

The Tribunal was directed to submit a specific finding on whether the spinning and weaving departments constituted one business or two separate businesses during the relevant period. The Tribunal found that both the spinning and weaving sections of the assessee formed part and parcel of a single manufacturing business carried on by the assessee during the chargeable accounting period in question. This finding was based on the facts that there were no separate ledger accounts for the weaving section, and the assets were integrated into a single set of books. Additionally, the two activities were knit together and properly integrated in their operations.

2. Whether the exclusion of the value of the building, plant, machinery, and electric fittings of the weaving department was in accordance with Schedule II, rule 1, of the Excess Profits Tax Act:

The Excess Profits Tax Officer excluded the value of the buildings, plant, machinery, and electric fittings of the weaving department, reasoning that since the weaving department did not go into production during the chargeable accounting period, these assets did not become business assets and hence did not become capital employed for the purpose of earning profits during that period. The Appellate Assistant Commissioner, however, held that the amount expended on these assets was capital employed in the business and should be included in computing the average capital. The Tribunal reversed this decision, agreeing with the Excess Profits Tax Officer.

The Court analyzed the relevant statutory provisions, including Section 6 of the Excess Profits Tax Act and sub-rule (1) of rule 1 of Schedule II. It was noted that the rule states that the average amount of capital employed in the business shall be the price paid for assets, the nominal amount of debts, and the value of assets acquired otherwise than by purchase. The word "employed" in the sub-rule relates to capital and not to assets. The Court concluded that actual employment of the assets acquired is not necessary for them to be considered capital employed in the business. The funds used to acquire assets for the business, even if not yet employed, would still be considered capital employed.

The Court referred to the case of Inland Revenue Commissioners v. Byron Ltd., which supported the view that assets need not be actively employed to be considered capital employed in the business. The decision in Birmingham Small Arms Co. v. Inland Revenue Commissioners was distinguished, as it involved a claim to compensation rather than actual capital expenditure on assets.

The Court held that the assets acquired for the weaving department, although not yet put into use, were still part of the capital employed in the business. The fact that the weaving department did not go into production during the chargeable accounting period did not disentitle the assessee from claiming that the money spent on it should be considered capital employed in its business.

Conclusion:

The Court answered the question referred in the negative and in favor of the assessee, concluding that the exclusion of the value of the building, plant, machinery, and electric fittings of the weaving department was not in accordance with Schedule II, rule 1. The assessee was entitled to have these assets included in the computation of average capital employed in the business. The assessee was also awarded costs.

Issues Involved:
1. Validity of proceedings under section 34 of the Indian Income-tax Act.
2. Validity of cancellation of firm registration under rule 6B of the Income-tax Rules.
3. Legality of assessing escaped income on the basis of unregistered firms while maintaining original assessments based on registered firms.

Issue-wise Detailed Analysis:

1. Validity of Proceedings under Section 34:

The appellants contended that the proceedings under section 34 were without jurisdiction and void due to the lack of proper notice. The court examined the requirement under section 34(1)(a) which mandates that the Income-tax Officer must serve a notice on the assessee if he believes that income has been under-assessed due to the assessee's omission or failure to disclose material facts. The court agreed with the appellants, stating that the service of the requisite notice is a condition precedent to the validity of any reassessment under section 34. If no notice is issued or if the notice is invalid, the proceedings and consequent orders of reassessment are void. The court found that the notices were served on the appellant C. Pitchayya on behalf of the firms, and the notices specifically mentioned the under-assessment of income. However, the appellants argued that the notices should have been issued to individual partners rather than the firm. The court rejected this argument, clarifying that the firm is treated as an assessee under section 3 of the Act, and the notice to the firm was valid. The court also noted that the appellant had appeared before the Officer in response to the notice, and the other partners did not challenge the proceedings.

2. Validity of Cancellation of Firm Registration under Rule 6B:

The appellants argued that the cancellation of firm registration under rule 6B was ultra vires. Rule 6B allows the Income-tax Officer to cancel the registration if the firm is found to be fictitious. The court examined section 59 of the Act, which empowers the Central Board of Revenue to make rules for carrying out the purposes of the Act. The court held that rule 6B is consistent with the Act and is intended to clarify the Income-tax Officer's authority to cancel registration if it was erroneously granted to a non-existent firm. The court rejected the argument that cancellation of registration is only permissible under section 23(4) as a penalty for default. The court noted that section 23(4) deals with genuine firms that fail to comply with legal requirements, while rule 6B addresses cases where registration was granted to fictitious firms. The court also dismissed the argument that the lack of an appeal provision against cancellation under rule 6B invalidates the rule. The court emphasized that the appellants had notice and an opportunity to prove the genuineness of their firms, thus negating the claim of invalidity on procedural grounds.

3. Legality of Assessing Escaped Income on the Basis of Unregistered Firms:

The appellants contended that it was illegal to assess escaped income on the basis that the firms were unregistered while maintaining original assessments based on registered firms. The court did not delve into the merits of this argument, stating that it could be raised in the appeals against the fresh assessment orders. The court emphasized that this contention pertains to the merits of the assessment orders and does not raise any jurisdictional issues under article 226. The court suggested that the appellants could ventilate their grievances in the appeals or applications under section 27 of the Act.

Conclusion:

The court dismissed the appeals, upholding the High Court's decision on all points. The court agreed with the High Court that the proceedings under section 34 were valid, the cancellation of registration under rule 6B was lawful, and the appellants' contention regarding the assessment of escaped income did not raise jurisdictional issues suitable for writs of prohibition under article 226. The court also noted that the appellants had alternative remedies available through appeals and applications under section 27 of the Act. The appeals were dismissed with costs.

Issues Involved:
1. Whether the income from the sale of trees in the respondent's forests is agricultural income exempt from taxation under section 4(3)(viii) of the Indian Income-tax Act, 1922.

Detailed Analysis:

Issue 1: Whether the income from the sale of trees in the respondent's forests is agricultural income exempt from taxation under section 4(3)(viii) of the Indian Income-tax Act, 1922

Background and Contention:
The respondent, proprietor of the impartible zamin of Jaipur in Koraput District, derives income from the sale of timber and other forest products. The Income-tax Officer initially held that the forests were of spontaneous growth and thus the income was not exempt under section 4(3)(viii). This decision was upheld on appeal by the Appellate Assistant Commissioner. However, the Appellate Tribunal directed a fresh enquiry into the matter, considering a letter from the Dewan detailing the operations for rearing and maintaining the forests.

Subsequent Enquiries:
The Income-tax Officer, after further enquiry, maintained that the forests had grown naturally and the income was taxable. The Tribunal, on re-evaluation, found the evidence of plantation by the zamin authorities unsubstantial and concluded that the trees were of spontaneous growth. This decision covered assessments from 1942-43 to 1946-47.

High Court's Judgment:
The High Court of Orissa, upon reference, held that the income was not taxable, stating that the forests had been under Podu cultivation, leading to the disappearance of original forests, and that the trees must have been planted by human agency. They emphasized the organized activities by the respondent for forest maintenance, which included fostering tree growth, systematic cutting, and planting new trees.

Supreme Court's Analysis:
The Supreme Court disagreed with the High Court's view that the burden of proof was on the Department to prove that the income was not agricultural. It reiterated that the person claiming exemption must establish it. The Court referred to the principle laid down in Commissioner of Income-tax v. Venkataswamy Naidu, where it was held that the assessee must prove the income is agricultural.

Definition of Agricultural Income:
Referring to Commissioner of Income-tax v. Raja Benoy Kumar Sahas Roy, the Court clarified that agricultural income must be derived from land by agriculture involving basic operations like tilling, sowing, and planting. Subsequent operations like weeding and pruning are considered agricultural only if they follow basic operations. Products of spontaneous growth do not qualify as agricultural income.

Finding of Fact:
The Tribunal found no substantial evidence of tree plantation by the estate authorities, concluding that the trees were of spontaneous growth. The Supreme Court held this finding as binding and noted that the High Court misdirected itself by focusing on Podu cultivation rather than plantation evidence. The High Court's inference that the trees grew from burnt stumps confirmed spontaneous growth, not plantation.

Expenses vs. Receipts Argument:
The respondent argued that the high expenses in forest upkeep indicated substantial plantation activities. The Supreme Court dismissed this, stating that high maintenance costs do not necessarily prove plantation. The Court emphasized that the Tribunal's clear finding of spontaneous growth was final.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's order, and answered the reference in the affirmative, holding that the income derived from the sale of trees was taxable. The respondent was ordered to pay the costs of the appellant.

Conclusion:
The Supreme Court concluded that the income from the sale of trees in the respondent's forests was not agricultural income and was thus taxable. The onus of proving exemption lies with the respondent, and the evidence did not support the claim that the trees were planted by the estate authorities. The appeal was allowed, and the reference answered in the affirmative.

Issues Involved:
1. Whether the petitioners have a fundamental right to property in the premises of the school.
2. Whether the Bihar Education Code has the force of law to divest the petitioners of their proprietary rights.
3. Whether the respondents can legally interfere with the management and property of the school.

Issue-wise Detailed Analysis:

1. Fundamental Right to Property:
The petitioners, who are members of the Managing Committee of the Parsa High English School, claimed a fundamental right to property under Article 32 of the Constitution. They argued that the land and buildings of the school were purchased and constructed by the Managing Committee, and thus, they were the owners of the property. The court acknowledged that the respondents did not specifically deny the petitioners' claim of ownership in their affidavits. Therefore, it was taken as admitted that the Managing Committee purchased the land and constructed the school building, making them the proprietors of the land and building as trustees.

2. Force of Law of the Bihar Education Code:
The respondents argued that the Bihar Education Code, particularly Article 182 as amended, provided the legal basis for their actions. The amendment allowed the Board of Education to withdraw approval of the Managing Committee and appoint an ad hoc committee for the management of the school. However, it was conceded by the Solicitor-General that the Education Code did not have the force of law. The preface to the Bihar Education Code indicated that it was issued under the authority of the Director of Public Instruction and had the same authority as administrative orders, not statutory law. Consequently, the court held that the Education Code could not legally deprive the petitioners of their property rights.

3. Legal Interference with Management and Property:
The respondents attempted to justify their interference by citing the failure of the Managing Committee to comply with the directions of the Board of Secondary Education and the Government. They claimed that the appointment of an ad hoc committee was in accordance with the amended Article 182 of the Education Code. However, as the Education Code was not law, the court found no legal justification for the respondents' actions. The court noted an endorsement from the Inspector of Schools authorizing the use of local executive authorities to enforce the takeover, which further demonstrated the respondents' intent to interfere without legal basis.

Conclusion:
The court concluded that the petitioners had a fundamental right to property in the land and buildings of the school. The Bihar Education Code did not have the force of law to divest the petitioners of their proprietary rights. Therefore, the respondents were prohibited from interfering with the petitioners' properties except by authority of law. The court allowed the petition and ordered the respondents to pay the costs of the petition to the petitioners.

Issues Involved:
1. Legality of the Corporation's prohibition on the sale of meat in weekly markets.
2. Legality of increased fees for stalls in municipal meat markets.
3. Legality of the Corporation's refusal to grant licenses for selling meat outside designated areas.

Issue-Wise Detailed Analysis:

1. Legality of the Corporation's Prohibition on the Sale of Meat in Weekly Markets:

The petitioners argued that the Corporation's prohibition on selling meat in weekly markets was not authorized by any legal provision. They contended that the Corporation needed a byelaw to effect such prohibition and should have obtained the Deputy Commissioner's sanction as per Byelaw No. 1. The Corporation, however, claimed the authority under Section 57(1)(m) of the City of Nagpur Corporation Act and byelaw No. 1 at page 64 of the Book.

The Court held that Section 57(1)(m) did not confer power to regulate markets merely by passing resolutions; it required byelaws under Section 415(35)(b) of the Corporation Act. The byelaws at page 91, made under Section 179(1)(b-1) of the Municipalities Act, governed the regulation of meat markets. The Court found that the Corporation's action of prohibiting meat sales in weekly markets without the Deputy Commissioner's sanction was illegal. The Court also rejected the Corporation's argument that the prohibition was temporary, noting the lack of definite plans for adequate arrangements.

The Court concluded that the Corporation's action was not authorized by law and thus had to be struck down. The Court also addressed the mala fide allegation, stating that while the Corporation's action was not legally authorized, it was motivated by concerns for public health rather than financial gain.

2. Legality of Increased Fees for Stalls in Municipal Meat Markets:

Petitioners in Special Civil Application No. 222 of 1958 challenged the increased fees for stalls, arguing that the fees must be commensurate with the services rendered by the Corporation. They relied on the Supreme Court's decision in the Commr. Hindu Religious Endowments, Madras v. Lakshmindra Thirtha Swamiar, which held that fees must be reasonable and not for revenue generation.

The Corporation contended that the charges were justified to cover the costs of various services and to bring fees on par with other markets. The Court found that the term "fees" in byelaw No. 3 at page 64 referred to charges for the use and occupation of stalls, not fees in the legal sense. The Court noted that while the Corporation could charge for the use of its property, the charges must be reasonable, especially when the Corporation had a monopoly on meat markets.

The Court concluded that the reasonableness of the fees could only be determined through elaborate evidence, which was not possible in these proceedings. The petitioners were advised to seek redress through a suit. Consequently, Special Civil Application No. 222 of 1958 was dismissed.

3. Legality of the Corporation's Refusal to Grant Licenses for Selling Meat Outside Designated Areas:

Petitioners in Special Civil Application No. 243 of 1958 argued that the Corporation's refusal to grant licenses for selling meat outside designated areas was unreasonable and violated their right to do business under Article 19(1)(g) of the Constitution. They also challenged byelaw No. 1 and Clauses (i) and (ii) of byelaw 14 as unconstitutional.

The Court held that the regulation of meat sales was in the public interest to ensure hygienic conditions and prevent the sale of unwholesome meat. Byelaw No. 1 and Clause (ii) of byelaw 14, which restricted meat sales to designated areas, were reasonable restrictions. The Court also found that the terms "bad character" and "contagious or infectious disease" in Clause (i) of byelaw 14 would be reasonably interpreted by the officers, with provisions for appeal against arbitrary decisions.

The Court concluded that the restrictions imposed by the byelaws were not unreasonable. The petitioners' demand to sell meat outside designated areas was not conceded, and Special Civil Application No. 243 of 1958 was dismissed.

Final Orders:

- Special Civil Application Nos. 198/58 and 286/58 succeeded. The Corporation's prohibition on selling meat in weekly markets was quashed, and the Corporation was directed to consider applications for licenses in accordance with the law.
- Special Civil Application No. 222 of 1958 was dismissed, with no order as to costs.
- Special Civil Application No. 243 of 1958 was dismissed, with no order as to costs.