TMI Blog1999 (5) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 1961, read with section 32 of the Wealth-tax Act, 1957. The facts of the case are that the petitioner in his capacity as karta of the Hindu undivided family filed the application for settlement before the Settlement Commission in respect of the assessment years 1976-77 and 1977-78. The applications were filed as karta of the minor Hindu undivided family, as well as in his individual capacity. The Settlement Commission on September 29, 1998, passed the order determining the petitioner's wealth for the various assessment years, however, the Commission did not quantify the wealth-tax liability. Consequential orders under section 16(3) of the Wealth-tax Act, read with section 22D of the Act were passed and demand notices were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must follow as a corollary that it is free to legislate within that sphere in any way which appears to it to be the best way to give effect to its intention and policy in making a particular law, and that it may utilise any outside agency to any extent it finds necessary for doing things which it is unable to do itself or finds it inconvenient to do. In other words, it can do everything which is ancillary to and necessary for the full and effective exercise of its power of legislation. (3) It cannot abdicate its legislative functions, and therefore while entrusting power to an outside agency, it must see that such agency acts as a subordinate authority and does not become a parallel Legislature." In State of Tamil Nadu v. K.A. Ramudu Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 1 SCC 125, a distinction was drawn between legislation by incorporation and legislation by reference in as much as in the latter case the amendments made in the earlier legislation would be applicable to the referring legislation and it was observed at paragraph 15 as under : "The principle, broadly, is that where a statute is incorporated by reference into a second statute, the repeal of the first statute by a third does not affect the second (see Clarke v. Bradlaugh [1881] 8 QBD 63, 69). Likewise, logically, where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Act, can be deemed to be incorporated in it. (see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. v. Asst. Commissioner of Sales Tax [1974] 94 ITR 204; [1974] 33 STC 219 (SC), the decision given in Shama Rao v. Union Territory of Pondicherry [1967] 20 STC 215 (SC) was distinguished as under (page 219 of 94 ITR) : "We think that the principle of the ruling in Shama Rao v. Union Territory of Pondicherry [1967] 20 STC 215 (SC), must be confined to the facts of the case. It is doubtful whether there is any general principle which precludes either Parliament or a State Legislature from adopting a law and the future amendments to the law passed respectively by a State Legislature or Parliament and incorporating them in its legislation. At any rate, there can be no such prohibition when the adoptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of to income-tax and sums imposed by way of penalty, fine and interest under that Act and to the corresponding wealth-tax authorities instead of to the income-tax authorities specified therein. It is by virtue of section 32 of the Wealth-tax Act, that the provisions of the Income-tax Act have been incorporated. The Income-tax Act and the Wealth-tax Act have been enacted by Parliament and could be considered supplemental to each other and in many respects they are pari materia. Parliament could have incorporated separate provisions under the Wealth-tax Act, in respect of procedure for recovery. Instead of incorporating separate provisions in the Wealth-tax Act, the provisions of the Income-tax Act have been made applicable. Section 32 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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