TaxTMI 
TaxTMI 
1960 (9) TMI 4
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.... the Nawab Saheb of Cambay representing the State of Cambay sold for and on behalf of the State the property known as " Cambay State Mills " to a private limited company--" Shree Vijaylaxmi Cotton Mills Ltd. " In the indenture of conveyance the vendor covenanted for himself and his successors that the vendor shall not during the period of five years from the date of the conveyance and during such further period thereafter as the Cambay Durbar may, from time to time, determine, levy, impose, claim or recover from the purchaser company and its successors and assigns any income-tax, super-tax, excess profits tax or any other tax, impost or duty on the income, profits or gains of the said mills or business thereof in the hands of the purchaser ....
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....es, might grant such reliefs as it might think appropriate. The appellant company made an application on May 7, 1949, to the Commissioner of Income-tax, Bombay, claiming exemption from income-tax, super-tax, excess profits tax and business profits tax on the basis of the covenant made by the Cambay State in favour of its vendor, Vijaylaxmi Cotton Mills. This application was, however, rejected, by the Government of India and this decision was communicated to the appellant company by the Commissioner of Income-tax by his letter dated October 25, 1951. Thereafter the appellant company was assessed to income-tax for the years 1951-52, 1952-53. On June 11, 1954 the appellant applied to the High Court of Bombay for relief under article 226 of the....
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....rritory is acquired by a sovereign state for the first time that is an act of state. It matters not how the acquisition has been brought about. It may be by conquest, it may be by cession following on treaty, it may be by occupation of territory hitherto unoccupied by a recognized ruler. In all cases the result is the same. Any inhabitant of the territory can only make good in the municipal courts established by the new sovereign such rights as that sovereign has, through his officers, recognised. Such rights as he had under the rule of predecessors avail him nothing. Nay more, even if in a treaty of cession it is stipulated that certain inhabitants should enjoy certain rights, that does not give a title to these inhabitants to enforce thes....
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....xmi Cotton Mills to exemption from income-tax and so the right can be enforced. It is to be noticed that in the application before the High Court no such case of recognition was set up. Paragraph 6 of the petition to which the learned counsel drew our attention says : " The petitioners say that ever since the grant of the said exemption from 1943 onwards the said Shree Vijaylaxmi Cotton Mills enjoyed the said exemption and the said Cambay State carried out its obligations. " It is urged that by these words the appellant wanted to say that the Government of India also gave the Vijaylaxmi Cotton Mills an exemption from taxation on the basis of the covenant. The words used in paragraph 6 are however not capable of this interpretation. We think....