Removal of difficulties power cannot rewrite substantive tax law; 1962 amendment order exceeded section 6 limits.

Section 6 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 permits directions only to remove an actual difficulty in giving effect to the extended income-tax law, so the existence of that difficulty is a condition precedent and must be shown objectively. The earlier 1949 Removal of Difficulties Order had already dealt with the practical issue by requiring depreciation actually allowed under merged State laws to be considered. The 1962 Amendment Order did not remove any remaining difficulty; it introduced a notional depreciation concept and thereby changed the settled meaning of the statute. On that reasoning, the 1962 Amendment Order was ultra vires section 6.

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Issues: Whether the Taxation Laws (Merged States) (Removal of Difficulties) Amendment Order, 1962 was validly issued under section 6 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949, in the absence of a proved difficulty arising in giving effect to the extended income-tax law.

Analysis: Section 6 empowered the Central Government to make provisions or give directions only for the removal of a difficulty that had actually arisen in giving effect to the extended law. The existence of such difficulty was therefore a condition precedent and had to be established as an objective fact, not treated as a matter of subjective governmental satisfaction. The earlier Removal of Difficulties Order, 1949 had already addressed the practical problem created by the application of the Indian Income-tax Act, 1922 to merged States by requiring depreciation actually allowed under merged State laws to be taken into account. The 1962 Amendment Order did not remove any remaining difficulty; instead, it altered the settled meaning of the expression by introducing a notional depreciation concept. That exceeded the limited power conferred by section 6.

Conclusion: The 1962 Amendment Order was invalid and ultra vires section 6 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949; the conclusion is in favour of the assessee.

Ratio Decidendi: A removal-of-difficulties power can be exercised only when an actual difficulty in implementing the statute exists, and it cannot be used to alter the substantive scheme or meaning of the parent law.

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