TMI Blog1960 (9) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ition by the Dominion of India or the Union of India of the right to exemption was made in the petition before the High Court. In our opinion the High Court rightly dismissed the petition. Appeal dismissed. - - - - - Dated:- 2-9-1960 - Judge(s) : S. K. DAS., M. HIDAYATULLAH., K. C. DAS GUPTA., N. RAJAGOPALA AYYANGAR JUDGMENT The judgment of the court was delivered by DAS GUPTA J.--This appeal by special leave is against the order of the High Court of Bombay dismissing summarily the appellant's petition under article 226 of the Constitution of India. The appellant is a company incorporated and registered under the Indian Companies Act and has its registered office at Station Road, Cambay, in the State of Bombay. It appears t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion of India enacted a law called " Taxation Laws Extension to Merged States Act ". The consequence of this was that the Income-tax Act became applicable to merged States including what had formerly been the State of Cambay as from August 1, 1949. On the same date the Government also promulgated an order called the " Merged States Taxation Concession Order, 1949 ", clause 15 of which provides that if any industrial factory situate in a merged State had been granted exemption from income-tax, super-tax or any tax by the ruler of the State before August 1, 1949, it shall submit an application to the Commissioner of Income-tax which the commissioner was directed to forward to the Central Government and the Central Government, having regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jaylaxmi Cotton Mills is no longer in the picture and the appellant company has purchased the property does not affect the question. The real question is whether after the accession of the Cambay State to the Dominion of India, somebody having a contractual right which could be enforced against the Cambay State was entitled to enforce it against the Government of India in the Indian courts. There is an exhaustive review of the authorities pertinent on this question in this court's decision in Dalmia Dadri Cement Co. Ltd. v. Commissioner of Income-tax. It is unnecessary to discuss these authorities again. We may only refer to the succinct statement of the law by Lord Dunedin in Vajesinghji Joravarsinghji v. Secretary of State for India in Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s therefore not entitled to have any relief from the courts in India on the basis of the covenants in spite of the fact that the merger agreement included--by a communication from the Government of India to the Nawab dated September 10, 1948--a clause in these terms : " No order passed or action taken by you before the date of making over the administration to the Dominion Government will be questioned unless the order was passed or action taken after the 1st April, 1948, and is considered by the Government of India to be palpably unjust or unreasonable. The decision of the Government of India in this respect will be final. " Before us a point was sought to be taken on behalf of the appellant that the Dominion of India did in fact rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered as amounting to the recognition of a right to exemption. It is worth remembering in this connection that in section 15 of the Taxation Concessions Order, made on December 31, 1949, it was made clear that the Government of India would allow or disallow any exemptions granted by an acceding State, only as it thought fit. It is true that recognition need not be in any particular form. It was pointed by this court in Virendra Singh v. State of Uttar Pradesh that recognition of such rights as they exist at the date of cession can be given either by legislation or by proclamation and it can even be inferred from the mode of dealing........ " This is of little assistance to the appellant, which relies wholly on the fact of non-assessment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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