TMI Blog1946 (8) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is 1939-40 for the accounting year 1938-39, which commenced on the 1st of April, 1938, and ended on the 31st March, 1939. The assessment was completed on the 14th February, 1940. The appeal against the assessment was disposed of on the 7th March, 1942. Two days before, on the 5th of March, 1942, the assessee took an additional ground that the assessment was ultra vires inasmuch as the Indian Finance Act of 1939 was not in operation on the date of the assessment, and that the Validating Acts or the Validating Regulations passed by the Bihar Governor were ultra vires. The Appellate Assistant Commissioner, whose order is not to be found in the paper-book, dismissed the appeal. The Appellate Tribunal disposed of the appeal of the assessee on the 31st of March, 1943. They came to the conclusion that the Validating Ordinance of 1942, applying the Finance Act of 1939 as well as the Income Tax (Amendment) Act, 1939, with retrospective effect, was intra vires of the Governor and made the assessment valid. It is now convenient to refer to the relevant Acts passed by the Bihar Governor. On the 13th of June, 1941, the Governor-General gave assent to Bihar Regulation I of 1941. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question. It is then provided that Regulations made under this sub-section shall be submitted forthwith to the Governor-General and until he assents shall have no effect. On these facts the question of law stated above arises for our decision. Dr. Mitter on behalf of the assessee contends that the assessment is ultra vires for the following reasons :- (i) That the Bihar Governor cannot encroach on the Central field with regard to any item in List I of the Seventh Schedule to the Government of Indian Act and in particular regarding item 54 Taxes on income other than agricultural income; (ii) that if the Regulation is treated to have been passed under Section 92(1) it is ultra vires as the Governor has no power to make the Regulation operate retrospectively; (iii) if however the Regulation is treated to have been passed under section 92(2) the assessment is bad as the Governor even with the consent of the Governor-General cannot pass any Regulation which will affect the assessment which had already been completed on the date when this Act came into force; and (iv) the Income Tax Officer could not have applied the Indian Finance Act of 1939 because it was admittedly not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of the accused in that case was that the Ordinance promulgated by the Governor-General under Section 72 of the Government of India Act, 1915, which authorised him in case of emergency to promulgate Ordinances for the peace and good government of British India was invalid inasmuch as on the facts it could be found that the state of emergency did not exist and that the Ordinance did not conduce to the peace and good government in British India. Viscount Dunedin in delivering the judgment of the Board negatived these two contentions thus at page 171 :- The petitioners ask this Board to find that a state of emergency did not exist. That raises directly the question who is to be the judge of whether a state of emergency exists. A state of emergency is something that does not permit of any exact definition. It connotes a state of matters calling for drastic action, which is to be judged as such by some one. It is more than obvious that that some one must be the Governor-General, and he alone. Any other view would render utterly inept the whole provision. Emergency demands immediate action, and that action is prescribed to be taken by the Governor-General. It is he alone w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 43 puts the person who comes within its terms artificially into the position of the agent and of assessee under Section 42. This is exactly the position here. It is, therefore, not pertinent point out that on the date when the Income Tax Officer started the assessment the Indian Finance Act of 1939 was in reality not in operation because the Regulation of 1942 directs that the Indian Finance Act of 1939 must be deemed to have been in operation on that date. It is also to be observed that the Income Tax Officer actually applied the provisions of the Indian Finance Act of 1939 to the assessment of this assessee believing that the Indian Finance Act of 1939 had extended to this area so that the assessment of the assessee had been made by him as if the Indian Finance Act of 1939 was actually in operation. The contention of Dr. Mitter that there is no liability to tax unless the Finance Act has been passed is perfectly correct. In the case of Western India Turf Club the Lord Chancellor in delivering the judgment of the Privy Council observed at page 495 : The argument which has been used in favour of the appeal seems to involve the fallacy that liability to tax attached to the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... livering the judgment of the Board observed at page 51 : In these circumstances, it appears to their Lordships that unless some saving can be implied as regards occupancy-holdings which, at the date of the commencement of the Act, are in question in a pending suit, Section 26(N) must be implied to the present case, and the plaintiffs appeal must fail in limine. Their Lordships are of opinion that no such saving can be implied. Section 26(N) is not a provision to the effect that action shall lie in certain circumstances, nor has it any reference directly to litigation. Its provision is that every person claiming an interest as a landlord shall be deemed to have given his consent to every transfer made before January 1, 1923. This is retrospective : the question is not whether general language shall be taken only in a prospective sense. The object of this section can only be to quiet titles which are more than ten years old, and to ensure that if during those ten years the transferee has not been ejected he shall have the right to remain on the land. Within this class the Legislature has not thought fit to discriminate against tenants whose right is under challenge in a suit, a cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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