TMI Blog1947 (4) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner. On the 26th May, 1940, the Governor of Bihar acting under Section 92(1) of the Government of India Act, 1935, issued a Notification id the following terms:- In exercise of the power conferred by sub-section (1) of Section 92 of the Government of India Act, 1935, the Governor of Bihar is pleased to direct that each of the Acts specified in the Schedule shall be deemed to have been applied to the Santal Parganas and the Chota Nagpur Division with effect retrospectively from the date on which each of the said Acts came into force in other parts of the Province of Bihar. SCHEDULE. (1) The Indian Income-tax (Amendment) Act, 1939. (VII of 1939). (2) The Income-tax Law Amendment Act, 1940. (XII of 1940). (3) The Excess Profits Tax Act, 1940. (XV of 1940). (4) The Excess Profits Tax Act, 1940. (XV of 1940). To remove doubts as to the retrospective applicability of the Indian Finance Act, 1940, and the other Acts mentioned in the Notification, acting under Section 92(2) of the Government of India Act, 1935, the Governor of Bihar made Regulation I of 1941, for the peace and good government of the area in question. It received the assent of the Governor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal was ordered to be dismissed they were not taken into consideration by the Appellate Assistant Commissioner. The assessee appealed to the Income-tax Appellate Tribunal where he urged these grounds. In the meantime it was found that in making Regulation I of 1941 the Finance Acts of 1938 and 1939 were not included in the list of Acts extended to these partially excluded areas. The Governor of Bihar thereupon, acting under Section 92(2) of the Government of India Act, 1935, made Regulation IV of 1942 on 30th June, 1943. It runs as follows:- THE BIHAR GAZETTE Extraordinary Published by Authority. Ranchi Tuesday, July 7, 1942. Legislative Department. Notification. The 7th July, 1942 No. 133-Leg-R.-The following Regulation made by the Governor under sub-section (2) of Section 92 of the Government of India Act, 1935, has been assented to by the Governor-General on the 30th June 1942, and is hereby published for general information:- (BIHAR REGULATION IV OF 1942) The Chota Nagpur Division and the Santal Parganas District Validating (Amendment) Regulation, 1942. A Regulation to amend the Chota Nagpur Division and the Santal Parganas District Validating Regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y such areas as His Majesty may by Order in Council declare to be excluded areas or partially excluded areas. The Secretary of State shall lay the draft of the Order which it is proposed to recommend His Majesty to make under this sub-section before Parliament within six months from the passing of this Act. Administration of excluded areas and partially excluded areas. 92. (1) The executive authority of a Province extends to excluded and partially excluded areas therein, but, notwithstanding anything in this Act, no Act of the Federal Legislature or of the Provincial Legislature shall apply to an excluded area or a partially excluded area, unless the Governor by public notification so directs, and the Governor in giving such a direction with respect to any Act may direct that the Act shall in its application to the area, or to any specified part thereof, have effect subject to such exceptions or modifications as he thinks fit. (2) The Governor may make regulations for the peace and good government of any area in a Province which is for the time being an excluded area, or a partially excluded area, and any regulations so made may repeal or amend any Act of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was argued that at that time the Finance Act of 1939 had not been made applicable to the Chota Nagpur Division and therefore the order of the Income-tax Officer was a nullity. It was further argued that the appellant's appeal to the Appellate Assistant Commissioner was dismissed on 3rd March, 1942, and the assessment proceedings thereupon came to an end. The subsequent making of Regulation IV of 1942 by the Governor cannot put life into what was already dead. In our opinion this argument is unsound. The assessment proceedings had not come to an end nor were they dead. The appellant had kept the proceedings alive by filing appeals and the proceedings were thus pending for decision. The right to appeal against orders of assessment by the Income-tax Officer or the Appellate Assistant Commissioner are valuable rights. In The Raleigh Investment Company Ltd. v. The Governor General in Council Since reported at [1947] F.C.R. 59 and at p. 332 intra (as yet unreported) their Lordships of the Privy Council observed as follows:- The argument for the appellant was that an assessment was not an assessment 'made under the Act' if the assessment gave effect to a provision which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich might be raised by a case stated is any question as to the validity of any taxing provision in the Income-tax Act to which effect has been given in the assessment under review. Any decision of the High Court on that question of law can be reviewed on appeal. Effective and appropriate machinery is therefore provided by the Act itself for the review on grounds of law of any assessment. It is in that setting that Section 67 has to be construed. These observations clearly show that the right of appeal and the machinery provided in the Income-tax Act to take a question of law for the opinion of the High Court are important provisions which have a hearing on the question whether a certain piece of legislation is ultra vires or not. The fact that an appeal was pending against the assessment is a material fact. When an Appellate Tribunal (whether it is the Assistant Commissioner, or the Tribunal of Appeal, or the High Court, or the Federal Court) decides the appeal it has to do so according to the law then in operation. If pending the litigation or pending the appeal some relevant legislation is enacted by the appropriate legislative authority, the deciding tribunal must give effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also in the United States of America. Once the new legislation is held to have retrospective operation it is clear that the Court of Appeal had to decide the appeal according to the law then prevailing, because the adjudication on the rights of the parties as made by the lower Court was not final. The Court has therefore to consider whether when the Income-tax Appellate Tribunal decided the appeal and when the High Court expressed its view on the question of law submitted for its opinion, the same was according to the law then in operation. The dates mentioned at the commencement of the judgment show that by Regulation IV of 1942, clause 3 of that Regulation was declared as deemed always to have been substituted in place of Section 3 of Bihar Regulation I of 1941. That clause included, inter alia, the Indian Finance Act of 1939 in the Acts which were declared as deemed to have come into force in the areas mentioned therein, on the dates therein specified. As already pointed out in the previous judgment in Civil Appeals Nos. III, IV and V of 1946, the effect of the words deemed to have been applied is to treat as if they were in existence, although not so in fact, from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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