Sovereign notifications can have legislative force when issued through rule-making machinery, disallowing deduction of managing agents' commission.

Notifications issued in 1931, 1932 and 1933 under the Holkar State industrial tax regime were treated as having legislative force because they were promulgated through the same rule-making machinery as the tax rules themselves. The notifications were not mere administrative directions; they operated as binding legal exposition of rule 3(2)(ix) and governed the computation of industrial profits. On that basis, the managing agents' commission on profits was not deductible under the Indore Industrial Tax Rules, 1927, and the tax assessments were upheld.

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Issues: Whether the notifications issued by the sovereign authority in 1931, 1932 and 1933 had legislative force so as to disallow deduction of the managing agents' commission on profits under rule 3(2)(ix) of the Indore Industrial Tax Rules, 1927.

Analysis: The rules governing industrial tax in the former Holkar State were framed and promulgated through Cabinet resolutions and notifications, and the later notifications were issued in the same manner. The challenged notifications did not merely express an administrative opinion; they operated as legislative exposition of rule 3(2)(ix) and functioned in the nature of an explanation to the charging scheme. In a sovereign state, an order issued by the ruler and promulgated as part of the rule-making process has the force of law, and its character must be gathered from its content and mode of promulgation. The notifications therefore could not be treated as lacking legal efficacy or as being subordinate merely because they were framed in the form of orders.

Conclusion: The notifications were valid and binding, and the managing agents' commission on profits was not deductible under rule 3(2)(ix).

Final Conclusion: The tax assessments were upheld because the sovereign notifications had the force of law and governed the computation of industrial profits.

Ratio Decidendi: Where a sovereign ruler issues a general order through the same promulgation machinery as the rules themselves, the order must be treated as binding law or legislative exposition, and not as a mere administrative direction, if its content shows that it governs the rights and liabilities of subjects.

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