Automatic extension of tax amendments to notified territory governed reassessment proceedings in Raigarh State.

A local notification applying the Indian Income-tax Act, 1922 to Raigarh State and making future amendments automatically applicable meant the 1948 amendment to section 34 extended to that territory when it took effect in British India. The amendment's requirement of prior Commissioner sanction before reassessment proceedings could begin therefore governed the Raigarh reassessment proceedings. The contention that the law had crystallised on merger of the State was not examined in the reference, because the question proceeded on the continued operation of the notification and the amended law.

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Issues: Whether section 34 of the Indian Income-tax Act, 1922, as amended by the Income-tax and Business Profits Tax (Amendment) Act, 1948, applied to reassessment proceedings in the Raigarh State under the Raigarh Darbar notification dated 31 July 1944.

Analysis: The notification made the Indian Income-tax Act, 1922, applicable to the Raigarh State and expressly provided that future amendments to that Act would apply automatically. The amendment made in 1948 introduced the requirement of prior sanction of the Commissioner before proceedings under section 34 could be commenced. That amendment, therefore, operated in the Raigarh State from the time it operated in British India. The contention that the law had crystallised on the merger of the State was not open to be examined in the reference, as the question referred proceeded on the continued operation of the notification and on the amended law.

Conclusion: The amended section 34 was applicable to the reassessment proceedings, and the question was answered in the affirmative.

Ratio Decidendi: Where a local notification applies a central taxing statute and expressly makes future amendments automatically applicable, later amendments to that statute extend to the notified territory from the date they take effect in the parent jurisdiction.

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