Allowed

The Commissioner of Income-Tax, Hyderabad v. Dewan Bahadur Ramgopal Mills Ltd.

Supreme Court8 Nov 19601960 INSC 195 · [1961] 2 S.C.R. 3181960 INSC 195

Case brief

AI extract

What is this about?

A Part B State assessee challenged a Central Government notification redefining 'depreciation actually allowed' for computing written down value after extension of the Indian Income-tax Act to Hyderabad. The Supreme Court upheld the notification as validly made under section 12 of the Finance Act, 1950, held it retrospective in application, and found no Article 14 violation.

What did the court decide?

Judgment of the High Court dated February 16, 1954 set aside; reference question answered in favour of the appellant; no costs ordered.

The Commissioner of Income-Tax, Hyderabad versus Dewan Bahadur… — Income Tax | Supreme Court (1961)

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318 SUPREME COURT REPORTS [1961)

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THE COMMISSIONER OF INCOME-TAX,

November 8.

HYDERABAD

v •

. DEW AN BAHADUR RAMGOPAL MILLS LTD.

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(S. K. DAS, M. HIDAYATULLAH, K. c. DAS GUPTA, J. c. SHAH and N. RAJAGOPALA AYYANGAR, JJ.)

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Income Tax-Depreciation allowance-Written down valueHyderabad Income-tax law-Repeal and extension of Indian Income-tax law-Central Government's notification providi"g for removal of difficulties in such extended law-Validity-Retrospective effect-Taxation Laws (Part B States) (Removal of Difficulties) Order, z950, para 2, Explanation-Finance Act, z950 (25 of z950), ss. 3, z2, z3-Constitution of India, Art; I4.

¶9

Prior to January 26, 1950,. when the erstwhile State of Hyderabad me.ged in the Union of India and became a Part B State, the respondent company was assessed to income-tax under the Hyderabad Income-tax Act, by which depreciation allowance was given to it on the basis of the written down value of its assets, such as buildings, machinery, plants, etc., in accordance with cl. (c) of s. 12(5) of that Act, which provided that in the case of assets acquired before the previous year and before the commencement of the Act, the written down valne would be the actual cost to the assessee Jess (i) depreciation at the rates applicable to the assets calculated on the actual costs for the first year since acquisition and for the next year on the actual cost diminished by the deprecia lion allowance for one year and so on, for each year upto the commencement of that Act, and (ii) depreciation actually allowed to the assessee on such assets for each financial year after the commencement of the Act. After the merger of Hyderabad with the Union of India, by ss. 3 and 13 of the Finance Act, 1950, the taxation Jaws in force in the State were repealed and the Indian Income-tax Act, 1922, was extended to that area; and in exercise of the powers con. !erred by s. 12 of the Finance Act, 1950, the Central Government issued a notification dated December 2, 1950, called the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950. Paragraph 2 of the Order provided that "in making any assessment under the Indian ·Income-tax Act, 1922, all depreciation actually allowed under any laws or rules of a Part B State ...... shall be taken into account in computing the aggregate deprecia. tion allowance referred to in proviso (c) to s. l0(2)(vi) and the written down value under s. 10(5)(b) of the said Act".

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For the assessment year 1951-52 the respondent was assessed for the first time under the Indian Income-tax Act, and basing its claim on para. 2 of the aforesaid Order it asked for depreciation allowance in respect of its assets by working out

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2 S.C.R. SUPREME COURT REPORTS

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319

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he value thereof at their inception and deducting therefrom I96o such depreciation as was allowed for the three assessment years in which it was assessed under the Hyderabad Income-tax Act. The Commissioner By order dated November 30, 1951, the Income-tax Officer dis- of Income-ta, · allowed the respondent's claim on the ground that it was against Hyderabad. the principle inherent in granting depreciation allowance which v. must decrease from year to year. The matter wa!; taken up to Dewan Bahadu" the Supreme Court and while it was pending there, on May 8, Ramgopal Mtll& 1956, the Central Government issued a notification in exercise Lid. of its powers conferred on it by s. 12 of the Finance Act, 1950, whereby an explanation was added to the aforesaid para. 2 as follows: "For the purpose of this paragraph, the expression " all depreciation actually allowed under any laws or rules of a .Part B State" means and shall be deemed to have always meant the aggregate allowance for depreciation taken into account in computing the written down value under any laws or rules of a Part B State or carried forward under the said laws or rules." The respondent challenged the validity of the notification of 1956 and also its applicability to the present case on the grounds (1) that it was ultra vires the powers conferred on the Central Government by s. 12 of the Finance Act, 1950, (2) that it contravened Art. 14 of the Constitution, and (3) that, in any case, it could have no retrosvective effect.

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Held: (1) that the true scope and effect of s. 12 was that it was for the Central Government to determine if any difficulty of the nature indicated in the section had arisen and then to make .such order, or give such direction, as appeared to it to be necessary to remove the difficulty, the legislature having left the matter to the executive;

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Pandit Banarsi Das Bhanot v. The State of Madhya Pradesh and Others, [1959] S.C.R. 427, relied on.

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In the present case, a difficulty had arisen, because if depreciation actually allowed under the Hyderabad Income-tax Act was taken into account in computing the aggregate depreciation allowance and the written down value, an anomalous result would follow, namely, depreciation allowance to be allowed to the assessee in the accounting year under the Indian Income-tax Act would be more than what was allowed in previous years under the Hyderabad Income-tax Act. Consequently, the Central Government was within its power under s. 12 in making the notification dated May 8, 1956.

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(2) that ti•c notification of 1956 applied to all those to whom para. 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, was applicable and created no unequal treatment of persons in the like situation. Accordingly, the notification did not contravene Art. 14 of the Constitution.

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(3) that the Central Government had the power under s, 12 of the Finance Act, 1950, to make an order or give a direction so as to remove difficulties which arose in the very beginning

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320 SUPREME COURT REPORTS

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[1961)

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and, therefore, the notification, though added in r956, was valid . . and was applicable to the assessment of r95r-52. The Co,nmissioner of Income-tax, • CIVIL APPELLATE JURISDICTION: Civil Appeal Hyderabad No. 5 of 1959. v. Dewan Bahadur Appeal from the judgment and order dated Febru- Ramgopal Mills ary 16, 1954, of the former Hyderabad High Court in Ltd. Reference No. 347/B-5/2 of 1953,54. G. K. Daphtary, Solicitor-General of India, K. N. Rajagopala Sastri and D. Gupta, for the appellant. Sanat P. Mehta and J.B. Dadachanji, for the respondent. 1960. November 8. The Judgment of the Court was delivered by s. K. Das J. S. K. DAS J.-This is an appeal on a certificate of fitness granted by the High Court of Judicature at Hyderabad under s. 66-A (2) of the Indian Income-tax Act, 1922. The Commissioner of Income-tax, Hyderabad, is the appellant before us. The respondent is Dewan Bahadur Ramgopal Mills'Ltd., a public limited company incorporated in the erstwhile State of Hyderabad.

¶22

The respondent company was assessed under the Hyderabad Income-tax Act in respect of the assessment years 1357 -F, 1358-F and 1359-F. In the assessment for those years depreciation allowance was given to it on the basis of the written down value of its assets, such as buildings, machinery, plant, eto., in accordance with the provisions of cl. (o) of s. 12(5) of the Hyderabad Income-tax Act. That clause provided that in the case of assets acquired before the previous year and before the commencement of the Act, the written down value would be the actual oost to the assessee less (i) depreciation at the rates applicable to the assets calculated on the actual cost for the first year since acquisition and for the next year on the actual cost diminished by the depreciation allowance for one year and so on, for each year upto the commencement of the Aot, and (ii) depreciation actually allowed to the assessee .on such assets for ea.oh financial year after the commencement of the

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2 S.C.R. SUPREME COURT REPORTS

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321

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Act. The erstwhile State of Hyderabad merged in i96o . . . came a the Union of Part B India S tate. on The Fmance Act, 1950, by January . 26, 1950, and be- 1.h of e Incorne-tax, c om111tssioner s. 13 thereof repealed the taxation laws in force in Hyderabad Part B States except for certain purposes not relevant v. to this case, and by s. 3 extended the Indian Income- Dewan Baha~''' tax Act, 1922, to the whole of India except the State Ramg°f~ Mills 1 of Jammu and Kashmir. In exercise of the powers · conferred by s. 12 of the Finance Act, 1950, the Cent- s .K Das J. ral Government was pleased to make the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950 (hereinafter referred to as the Removal of Difficulties Order, 1950), by a notification dated December 2, 1950. Paragraph 2 of the said Order, in so far as it is relevant to this case, was in these terms:

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" Computation of aggregate depreciation allowance and written down value :

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In making any assessment under the Indian Income-tax Act, 1922, all depreciation actually allowed under any laws or rules of a Part B State relating to Income-tax and Super-tax, or any Jaw relating to tax on profits of business, shall be taken into account in computing the aggregate depreciation allowance referred to in sub-clause (c) of the proviso to clause (vi) of sub-section (2) and the written down value under clause (b) of sub-section (5) of sec. 10 of the said Act ".

¶28

For the assessment year 1951-52 which was in respect of the account year ending June 30, 1950, the respondent was assessed for the first time under the Indian Income-tax Act, 1922, read with paragraph 5 of the Part B States (Taxation Concessions) Order, 1950. Basing its claim on paragraph 2 of the Removal of Difficulties Order, 1950, the respondent asked for depreciation allowance in respect of its assets such as buildings, machinery, plant, etc., to the tune of Rs. 8,12,244. It worked out the value of the assets at their inception and deducted therefrom such depreciation a.s was allowed for the three assessment years in which the respondent was assessed under the Hyderabad Income-tax Act and calculating the written down 41

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322 SUPREME COURT REPORTS [1961]

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I960 value in that manner, it claimed depreciation accord- The co-;;;-issioner ing to the prescribed rates. By his order dated of Jn:,,,,_, • ., November 30, 1951, the Income-tax Officer disallowed Hyderabad this claim. He held that the claim of the respondent v. was against the principle inherent in granting depre- Dewan Bahad"' ciation allowance which must decrease from year to Ramgof;~ Mills year, and further held that the word "allowed " in · paragraph 2 of the Removal of Difficulties Order, 1950, s. JC Das ;. should be construed as meaning "considered " only. Accordingly, he took the figures of the written down value from the income-tax proceedings of 1359-F and allowed depreciation at the prescribed rate on those figures. Against the order of the Income-tax Officer, the respondent went in appeal to the Appellate Assistant Commissioner, Hyderabad Division. That Officer by an order dated May 23, 1952, upheld the view of the Income-tax Officer and dismissed the appeal. Then there was an appeal to the Income-tax Appellate Tribunal which was heard by the Bombay Bench of the said Tribunal. By its order dated December 12, 1952, the Appellate Tribunal held that in view of the provisions in paragraph 2 of the Removal of Difficulties Order, 1950, the contention of the respondent must prevail, and it pointed out that the words used in paragraph 2 were "depreciation actually allowed under any laws or rules of a Part B State", and those words did not mean the aggregate allowance for dep· reciation taken into account in computing the written down value under the Hyderabad Act; therefore, the respondent was entitled to the depreciation allowance which it claimed. It directed the Income-tax Officer to compute the written down value on the basis of the actual cost to the assessee of the assets in question minus the depreciation allowance actually allowed to the assessee under the Hyderabad Income-tax Act. The appellant herein then moved the Appellate Tribunal for a reference to the High Court under' s. 66(1) of the Indian Income-tax Act. In the meantime, that is, on March 9, 1953, the Central Government purporting to exerpise its powers conferred by s. 60-A of the Indian Income-tax Act, 1922, added an Explanation

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2 S.C.R. SUPREME COURT REPORTS

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323

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to paragraph 2 of the Removal of Difficulties Order, i96o 1950. That Explanation said: . h c .. " E l ' F h f h' T e ommissioner xp anat10n :- or t e purpose o t IS para- of Income-tax graph, the expression " all depreciation actually Hyderabad ' allowed under any laws or rules of a Part B State" v. means and shall be deemed to have always meant the Dewan Bahadur aggregate allowance for depreciation taken into Ramgopal Mills account. in computing the written down value under Ltd. any laws or rules of a Part B State or carried forward s. K. Das J. under the said laws or rules".

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The Explanation in terms gave effect to the contention urged on behalf of the Department and said that what has to be allowed is the aggregate allowance for depreciation taken into account in computing the written down value under any law or rules of a Part B State. In support of the application for a reference,

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the appellant relied on the aforesaid. Explanation and contended that in view of the Explanation the respondent could not claim depreciation a1lowance on the basis of actual cost minus the depreciation allowances actually allowed under the Hyderabad Income-tax Act. On this application the Tribunal expressed the view that if the Explanation applied to the case on hand, then the contention of the Department was correct and must be upheld. It said, however, that it had no power to review its own order and, therefore, considered it unnecessary to express any-opinion whether the Explanation was valid and affected the case before it. It said finally that the followiug question of law did arise out of its order and accordingly stated a case thereon :

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"Whether in making the assessment for the year 1951-52 under the Indian Income-tax Act is the assessee company entitled to claim depreciation allowance on the basis of the written down value computed at the time of the assessment for the year 1359-F, or is _to be computed on the basis of the actual cost minus the depreciation allowances granted under the Hyderabad Income-tax Act".

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The reference was then heard by the High Court of Judicature at Hyderabad which by its order dated February 16, 1954, held that the Expla_nation added

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324 SUPREME COURT REPORTS

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[1961]

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r96o to paragraph 2 of tho Removal of Difficulties Order, The c,:,:;is;ioner 1950, by the. notificatiou dated M~rch 9, 1953, was of Income-tax. void ou certam grounds one of w h1ch was that the Hydembad Explanation was ultra vires the powers of the Central v. Government under s. 60-A of the Indian Income-tax Dewan Bahadin Act. Therefore, it a1rnwered the question in favour of Ramgopal Ltd. Mills the respondent. The appellant then obtained the necessary certificate of fitness and preferred the pre- s. K. Das J. sent appeal. In the meantime, there was a further change of law. On May 8, 1956, the Central Government made a notification (No. S. R. 0. 1139) in exercise of the powers conferred on it by s. 12 of the Finance Act, 1950, whereby an Explanation in identical terms as the earlier Explanation made under s. 60-A of the Indian Income-tax Act, was added to paragraph 2 of the Removal of Difficulties Order, 1950. The arguments before us have proceeded on the basis of the Explanation added by the notification aforesaid and it is not disputed that if the Explanation is valid and applies to the present case, then the appeal must be allowed and the question of law answered in favour of the appellant. If, on the contrary, the Explanation is not valid or it does not apply to the present case, then the appeal must be dismissed.

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We proceed now to a consideration in detail of the different contentions urged before us on behalf of the appellant and the respondent. We may first read s. 12 of the Finance Act, 1950, under which notification No. S. R. 0. 1139 dated May 8, 1956, was made. Section 12 reads:

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" If any difficulty arises in giving effect to the provisions of any of the Acts, rules or orders extended by section 3 or section II to any State or merged territory, the Central Government may by order, make such provision, or give such direction, as appears to it to be necessary for removing the difficulty".

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On behalf of the appellant it has been argued that the notification was validly made in exercise of the powers conferred on the Central Government under s. 12 aforesaid; that it does not suffer from. any of the defects pointed out by the High Court in regard

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325

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2 S.C.R. SUPREME COURT REPORTS

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to the earlier notification of 1953 made under s. 60-A r96o of the· Income-tax Act; and that it adds an Explana- Th c . . · h" h · • Ir t t th t t" f • omm1ss1oner t10n w 1c m terms gives euec o e con en !OD o of Income-tax the appe~lant and this Court must consider the change Hyderabad • in law made thereby and give effect to it in answerv. ing the question of law arising out of the Tribunal's Dewan Bahadur order. On the other hand, the validity of the notifi- Ramgopal Mills cation ha.s been very stenuously contested before us Ltd. by learned Counsel for the respondent. He has chal- s. K. Das J. lenged its validity and also its applicability to the present case on the following grounds : (1) that it is ultra vires the powers conferred on the Central Government by s. 12; (2) that it can have no retrospective effect; and (3) that it contravenes Art. 14 of the Constitution. ·

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. . • omm1ss1oner of Income-tax Hyderabad • v.

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We shall consider these arguments in the order in which we have stated them. The fin1t question is whether the notification is validly made under s. 12 or is it ultra vires the powers conferred on the Central Government by that section ? On behalf of the respondent it is urged that a condition for the exercise of the power under s. 12 is contained ill the opening clause, which says : "If any difficulty arises in giving effect to the provisions of any of the Acts, rules or orders extended by section 3 or section 11 to any State etc." The contention is that no difficulty arose in giving effect to the provisions of any of the Acts, rules or orders referred to in the opening clause; to any State etc. and, therefore, the condition for the exercise of the power is not fulfilled and on that ground the notification is invalid. We are unable to accept this argument as correct. Section 10 of the Income-tax Act says, in its first sub-section, that the tax shall be payable by an assessee in respect of the profits or gains of any business, profession or vocation carried on by him. Sub-s. (2) thereof says that such profits or gains shall be computed after making certain allowances, and one of these allowances is in respect of the depreciation of such buildings, machinery, plant, etc. as a.re used for the purpose of the business (cl. vi). The depreciation except in certain cases is calculated on the written down value, which expre$sion is expla.ined

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326

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SUPREME COURT REPORTS [1961]

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'9⁶⁰ in sub-s. (5) of s. 10. Clause (b) of the sub-section. -_ . states: · Comnnssione" ,,.S O )

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-_ . · The Comnnssione" ,,.S O ) of Income-tax • 1 (5 - (a) " ........................ """ "" ........ · "' Hyderabad ' (b) In the case of assets acquired before the prev. vious year the actual cost to the assessee less all dep- Dewan Bahadur recia.tion actually allowed to him under this Act, or Ramgopal Mills a.ny Act repealed thereby or under executive orders Lid. issued when the Indian Income-tax Act, 1886 (II of s. K. Das J. 1886), was in force ".

¶55

It is obvious that in applying cl. (b) to an assessee in a Part B State there would be an initial difficulty, in as much as prior to 1950 when the Indian Income-tax Act came into force in a Part B State no depreciation could have been actually allowed to such an assessee under the Income-tax Act or under any Act repealed thereby; for example, the Hyderabad Income-tax Act was repealed by the Finance Act, 1950 and not by the Income-tax Act, and would not therefore be covered by cl. (b). Such and other difficulties led to the Removal of Difficulties Order, 1950, which has not been seriously challenged before us. Indeed, the High Court said that it was not open to the respondent to challenge the validity of the Removal of Difficulties Order, 1950, because such a point was not taken before the Tribunal. Learned Counsel for the respondent has then submitted that whatever initial difficulty there might have been in giving effect to the Indian Incmp.e-ta.x Act in a Part B State, that difficulty was solved by paragraph 2 of the Removal of Difficulties Order, 1950, and, in any view, there was no fresh difficulty which could necessitate the addition of an Explanation in 1953 or 1956. Here again we think that the submission is not correct. The basic and normal scheme of deprecia.tion under the Indian Income-tax Act is that it decreases every year, being a percentage of the written down value which in the first year is the actual cost and in succeerling years actual cost less all depreciation actually allowed under the Income-tax Act or any Act repealed thereby etc. The Hyderabad Income-tax Act not having been repealed by the Income-tax Act but by the Finance Act, 1950, there wa.s a difficulty in

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2 S.C.R. SUPREME COURT REPORTS

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allowing depreciation to an assessee in a Part B State in 1 960 60 the first year of assessment under the Indian Income- Th Commissioner tax Act. This difficulty was sought t? ?e re.moved by 0^~^Income-tax. paragraph 2 of the Removal of D1ffwult1es Order, Hyderabad 1950. If, however, depreciation actually allowed v. under the Hyderabad Income-tax Act was taken into Dewan Bahadur account in computing the aggregate depreciation Ramgopal Mills allowance and the written down value, an anomli.lous Ltd. result would follow as in the present case, namely, s. K. Das J. depreciation allowance to be allowfld to the assessee in the accounting year under the Indian Income-tax Act would be more than what was allowed in previous yea.rs under the Hyderabad Income-tax Act. This would create a disparity and be against the scheme of the Indian Income-tax Act. It was therefore necessary to explain pa.re.graph 2 of the Removal of Diffi· culties Order, 1950, to assimilate or harmonise the position regarding depreciation 11.llowance, and the Explanation added in 1953 or 1956 was obviously intended to remove the difficulty arising out of that disparity or disharmony.

¶59

1 960 60 Commissioner 0^~^Income-tax. Hyderabad v.

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Furthermore, the true scope and effect of s. 12 seems to be that it is for the Central Government to determine if any difficulty of the nature indicated in the section has arisen and then to make such order, or give such direction, as appears to it to be necessary to remove the difficulty. Parliament has left the matter to the executive; but that does riot make the notification of 1956 bad. lo Pandit Banarsi Das Bhanot v. The· State of Madhya Pradesh, &: Ors. (¹ ) we said at page 435: "Now, the authorities a.re clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be la.id, the rates at which it is to be charged in respect of different classes of goods and the like". We a.re, therefore, of the view that the notification of 1956, was validly ma.de under s. 12 and is not ultra ·vires the powers conferred on the Central Government by that section.

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The second question is-does the notification apply

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(1J [1959J s.c.R. 427.

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SUPREME COURT REPORTS [1961]

328

I '

i96o to the assessment in the present case, which is an T he of Income-tax C ommissioner^--.. assessment for the was made m 1956 and . year it . 1951-52? The notification a . e dd d an Explanation . to Hvderabad • paragraph 2 of the Removal of Difficulties Order, · v. 1950. It says that a particular expression occuring Dewan Bahadur in that paragraph means and shall be deemed always Ramgopal 1vi.u, to have meant the aggregate allowance for deprecia- I.td. tion taken into account in computing the written down s. I<. na, J. value etc., under any law of a Part B State. The argument on behalf of the respondent is that the law which governs an a'.ssessment for the assessment year 1951-52 is the law in force at the time when the Finance Act, 1951, came into force; accordingly, so the argument proceeds, paragraph 2 of the Removal of Difficuties Order, 1950, as it stood on April 28, 1951, when the Finance Act, 1951, came into force, will apply in the present case. We consider this argument to be unsound. The Explanation, though added in 1956, explains the meaning of paragraph 2 of the Removal of Difficulties Order, 1950 and says in express terms that the paragraph shall be deemed always to have had that meaning. Section 12 by the very nature of its intent and purpose confers on the Central Government power to make an order to remove a difficulty which has already arisen, and the power to remove the difficulty must necessarily include the power to remove the difficulty from the time it arose. The Central Government has, therefore, the power to make an order or give a direction so as to remove the difficulty from the very beginning, and that is what the notification of 1956 does. It applies to the assessment of 1951-52; indeed it applies to all assessments made under the Iridian Income-tax Act in which paragraph 2 of the Removal of Difficulties Order, 1950, operates.

¶68

The last challenge to the validity of the notification of 1956 is that it contravenes Art. 14 of the Constitution, because it discriminates between different classes of tax payers. Learned Counsel for the respondent has asked us to consider the cases of assessees in three different areas which subsequently come in a Part B State : in one area there was no law relating to

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2 S.C.R. SUPREME COURT REPORTS

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329

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income.tax ; in the second there was a law relating to r96o income-tax under which written down value was com- Th c -. . pute on t e . d h b as1s^. o f d eprec1at1on , . actua ll y a ll owe d of e Income-ta" ommiss1oner year after year, while in the third the ·written down Hyderabad ' value was computed in the manner provided under v. the Hyderabad Income-tax Act ; it is pointed out that Dewan Bahaur on the extension of the Indian Income- tax Act' (read Ramgopal Mills with paragraph 2 of the Removal of Difficulties Order, Ltd. 195{) and the Explanation) to those areas, the assessee s. K. Das J. in the first area will get depreciation allowance on the actual cost; in the second area he will get such allowance on the basis of actual cost less depreciation actually allowed; and in the third area he will get such allow. ance on the actual cost less depreciation taken · into account. It is contended that this resultant discrimination is arbitrary and without any rational jutification. We think that learned Counsel for the respondent has ignored one essential consideration which clearly vitiates his argument. In the matter of depreciation· allowance, the assessee in the three areas in the example given by him do not stand on the same footing ; they are not situated a.like so as ·to be entitled to be treated a.like. It is obvious that an assessee from an area where there was no income-tax law at all can never say that in the matter of depreciation .allowance a.s respects buildings, machinery, plant etc., he is on a par "with a person in an area where there was a law relating to income-tax a.Bowing deprecia .. tion on such buildings, machinery, plant etc. The same would be the position with regard to areas where the previous law as to depreciation was different. Indeed, to treat all these persons alike would be tantamount to unequal treatment. In our view, the notification of 1956 creates no unequal treatment of persons in a like situation ; it applies to all who are in a like situation, namely, all those to whom para.graph 2 of the Removal of Difficulties Order, 1950, applies. We consider that 'the challenge to the notification based on Art. 14 is wholly unsubsta.ntia.I.

¶73

It has not been cfisputed before us that a ch11onge in

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330 SUPREME COURT REPORTS (1961)

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i96u law validly made and applicable to a case pending in appeal must be considered and given effect to by the Tl ie C 01n1niss1oner^{-. .} A II C Th I . . of Income-tax ppe ate ourt. e cone us10n we have reached IS Hyderabad ' that the notification of 1956 was validly made and v. applies to the present case. In view of this conclusion Dtwan Bahadur we have considered it unnecessary to examine the Ramgopat Mi.'; notification of 1953 or the reasons for which the High Ltd. Court held that notification to be bad. s. 1c Da' 1. For the reasons given above, we allow this appeal and set aside the judgment and order of the High Court dated February 16, 1954. The question referred to the High Court is answered in favour of the appellant. The appellant has succeeded by reason of the notification of 1956 and taking that circumstance into consideration, we direct that there will be no order for costs for the hearing in this Court.

¶77

Appeal allowed.

¶78

zv6o STATE OF UTTAR PRADESH AND OTHERS November II. V. BASTI SUGAR MILLS CO., LTD. (P. B. GAJENDRAGADKAR, A. K. SARKAR, IC SuBBA RAO, K. N. WANCHOO and J. R. MUDHOLKAR, JJ.}

¶79

Indt<striaJ Dispt<te-Bonus-Statute empowering Government to direct payment of bonus by notification-Validity of-Whether retrospective-United Provinces Indt<striaJ Disputes Act, I947• (U. P. z8 of I947), s. 3(b) and (d)-Constitt<tion of India, Art. I9(I)(j).

¶80

The Government of U. P. appointed a Court of enquiry under ss. 6 and 10 of the United Provirlces Industrial Disputes Act, 1947, and referred to it the present dispute. The Court of enquiry submitted its report to the Government, whereupon the Government issued a notification in July, 1950, directing the various sugar factories to pay bonus to their workmen for the years 1948-49 as well as to pay certain amounts as bonus for the years 1947-48. • The respondents obtained writ of prohibition from the High

The Commissioner of Income-Tax, Hyderabad v. Dewan Bahadur Ramgopal Mills Ltd.

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The Commissioner of Income-Tax, Hyderabad v. Dewan Bahadur Ramgopal Mills Ltd.

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Gazula Dasaratha Rama Rao versus the State of Andhra Pradesh & Others