JUDGMENT

KANIA, J. :— This is an appeal from the Judgment of a Division of the High Court of Gujarat in Special Civil Appln. No. 1797 of 1972 on a certificate granted under Article 133(1) of the Constitution of India. The relevant facts are as follows :-

2. The assessee is a Private Limited Company and carries on the business of manufacturing and selling textiles at Porbundar in Saurashtra in the Gujarat State. Before 1948 Porbundar was a part of the Princely State of that name. No Income-tax was levied by the erstwhile Porbundar State prior to 1948. In 1948 there was a merger of several princely States and as a result of the merger, the State of Saurashtra was formed. No income-tax was levied by the State of Saurashtra till 1949 when it promulgated the Saurashtra Income-tax Ordinance. Under that Ordinance provision was made for the grant of depreciation allowance based on the written down value. The said Ordinance defined "written down value" as follows :

"Written down value" means :-

(a) in case of assets acquired in the previous year, the actual cost to the assessee; and

(b) in the case of assets acquired before the previous year the actual cost to the assessee less all depreciation