Merged-state income-tax appeals retained former law procedure, so the Tribunal lacked power to seek a High Court reference.

A pending appeal under the Baroda State Income-tax Act continued to be governed by that former State law after merger, because the 1949 extension statute preserved the existing levy, assessment and collection framework and only substituted the corresponding authority in place of the abolished Huzur Adalat. That substitution did not import the ordinary procedural incidents of the Indian Income-tax Act, including the right to seek a reference under Section 66(1), because that right was not part of the Baroda law governing the pending appeal. The Tribunal therefore sat only as the substituted authority under the former State regime and lacked jurisdiction to make a reference to the High Court under the Indian Act.

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Issues: Whether the Appellate Tribunal, while disposing of an appeal transferred from the Baroda State Huzur Adalat under the Taxation Laws (Extension to Merged States and Amendment) Act, 1949, had jurisdiction to make a reference to the High Court under Section 66(1) of the Indian Income-tax Act, 1922.

Analysis: The appeal arose from an assessment made under the Baroda State Income-tax Act and, after merger, was heard by the Appellate Tribunal only as the corresponding authority substituted for the abolished Huzur Adalat. Section 7(1) of the 1949 Act preserved the Baroda law for levy, assessment and collection in respect of the relevant period, and the first proviso merely substituted the corresponding authority under the Indian Act for the authority named in the Baroda law. That substitution did not convert the proceeding into one governed by the ordinary procedural incidents of the Indian Income-tax Act. The right to seek a reference under Section 66(1) was a procedural incident available under the Indian Act, but it was not a right existing under the Baroda law, which continued to govern the assessee's rights for the pending appeal. The Tribunal therefore acted in the place of the Huzur Adalat and not in its ordinary jurisdiction under the Indian Income-tax Act.

Conclusion: The Tribunal had no jurisdiction to make a reference under Section 66(1) of the Indian Income-tax Act, 1922.

Ratio Decidendi: Where a pending appeal under a former State income-tax law is continued before a substituted authority by a merger statute, the assessee's procedural rights remain governed by the former State law unless the new enactment expressly confers additional rights; the substituted authority does not acquire the ordinary procedural incidents of its own statute merely by acting in place of the abolished tribunal.

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