Removal-of-difficulty orders remain valid when they cure a real tax-implementation problem without changing the parent Act's policy.

A removal-of-difficulty order under section 6 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 is valid where it addresses a real impediment in applying the extended tax provisions and does not effect a substantive change in the parent Act's policy. The 1962 amendment order was treated as adjusting the working of the depreciation scheme for cases involving earlier exemption under merged-state laws or agreements, rather than as unauthorised delegated legislation. Its retrospective Explanation, operating only on pending proceedings and not closed assessments, was also regarded as a reasonable classification and therefore not contrary to article 14.

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Issues: (i) Whether the Taxation Laws (Merged States) (Removal of Difficulties) (Amendment) Order, 1962 was within the power conferred by section 6 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 and was not invalid as unauthorised delegated legislation. (ii) Whether the 1962 Order offended article 14 of the Constitution of India by making an unreasonable classification between assessees whose assessments had become final and those whose assessments were pending.

Issue (i): Whether the 1962 Order was within the power conferred by section 6 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 and was not invalid as unauthorised delegated legislation.

Analysis: The power under section 6 was held to be a power to remove difficulties arising in giving effect to the provisions extended to the Merged States, and the Court treated the existence of a relevant difficulty as a matter for the Central Government's satisfaction, subject only to judicial review for relevance and not for reasonableness. The Explanation inserted by the 1962 Order was found to address a real impediment in applying the depreciation scheme under section 10(5)(b) of the Indian Income-tax Act, 1922 to cases where income had earlier been exempted under merged-state laws or agreements with rulers. The Court further held that the Order did not amount to a substantial amendment of the 1922 Act or to a change in policy, but only adjusted the working of the depreciation provisions. It also rejected the argument that the Order was bad because it amended the earlier Removal of Difficulties Order, 1949, or because the 1922 Act had been repealed for all purposes.

Conclusion: The 1962 Order was valid and within the delegated power under section 6 of the 1949 Act.

Issue (ii): Whether the 1962 Order offended article 14 of the Constitution of India by making an unreasonable classification between assessees whose assessments had become final and those whose assessments were pending.

Analysis: The retrospective Explanation was held to operate only on pending proceedings and not on closed assessments. The Court applied the settled principle that a law is not discriminatory merely because it operates prospectively or retrospectively so as to affect only pending matters, provided the classification has a rational nexus with the legislative object. The distinction between finalised assessments and pending assessments was treated as a reasonable classification, and the Court found the challenge under article 14 unsustainable.

Conclusion: The 1962 Order did not violate article 14.

Final Conclusion: The constitutional and delegated-legislation challenges to the 1962 Order failed, and the writ petition was dismissed with costs.

Ratio Decidendi: A removal-of-difficulty order is valid if it addresses a genuine impediment in giving effect to an extended tax provision, does not alter the essential policy of the parent Act, and its retrospective operation confined to pending proceedings constitutes a permissible classification under article 14.

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