Continuing exemption notification: pre-reorganisation tax relief remained effective for the successor Bar Council from the appointed day.

A pre-reorganisation exemption notification was treated as continuing in force for the successor State Bar Council because the Reorganisation Act preserved existing "law", including notifications having the force of law, until lawfully altered or repealed. On that basis, the Council was entitled to exemption from the appointed day, and assessment orders issued on the contrary footing were jurisdictionally flawed. An administrative order limiting exemption to a later assessment year was also unsustainable because it ignored the continuing legal effect of the earlier notification. The writ remedy was available against action without authority of law, and the consequential tax proceedings were quashed.

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Issues: (i) Whether the exemption notification granted to the erstwhile Bar Council of Madhya Pradesh continued to apply to the State Bar Council of Chhattisgarh after reorganisation of the State. (ii) Whether the assessment orders and the order restricting exemption to a later assessment year could be sustained when exemption from the appointed day was claimed.

Issue (i): Whether the exemption notification granted to the erstwhile Bar Council of Madhya Pradesh continued to apply to the State Bar Council of Chhattisgarh after reorganisation of the State.

Analysis: The definition of "law" in the Reorganisation Act included notifications having the force of law immediately before the appointed day. The Act also preserved the territorial operation of existing laws and enabled only lawful adaptation or modification by competent authority. The exemption notification issued in 1966 was therefore treated as continuing in the territories of the reorganised State until altered or repealed. Since no such alteration was shown, the notification continued to operate in favour of the newly constituted State Bar Council.

Conclusion: The exemption notification remained applicable to the State Bar Council of Chhattisgarh.

Issue (ii): Whether the assessment orders and the order restricting exemption to a later assessment year could be sustained when exemption from the appointed day was claimed.

Analysis: Once the continuing exemption was held applicable, the petitioner Council was entitled to exemption from the appointed day itself. The assessing authority proceeded on an erroneous view that no valid exemption existed and thereby committed a jurisdictional error. The later administrative order granting exemption only from a subsequent assessment year failed to account for the legal continuity of the earlier notification and gave no sustainable reason for denying exemption from the appointed day. The availability of an appellate remedy did not bar writ relief against an order passed without authority of law.

Conclusion: The assessment orders and the later exemption order were unsustainable to the extent they denied exemption from the appointed day.

Final Conclusion: The writ petitions succeeded, the tax assessments and consequential proceedings were quashed, and the petitioner Council was held entitled to exemption from the appointed day under the continuing effect of the earlier notification.

Ratio Decidendi: A pre-reorganisation exemption notification, being "law" within the meaning of the Reorganisation Act, continues to apply to the successor State and its institutions until it is lawfully altered or repealed by the competent authority.

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