S.K.DAS, J.

(1) THIS judgment relates to and governs eleven appeals which for convenience have been classified into two groups. The first group may be called the group of Travancore-Cochin appeals, and within this group fall Civil Appeals Nos. 143 to 145 of 1954. The, second group may be called the group of Mysore appeals and within this group are eight appeals, namely, Civil Appeals Nos. 27 to 30 of 1956 and 161 to 164 of 1956. By reason of the circumstance that certain common questions of law and fact arise in all these eleven appeals, they have been heard one after the other; but it will be convenient and will avoid confusion if we state the facts relating to the Travancore-Cochin group first and then deal with the questions arising therefrom. We shall then state the additional facts of the Mysore group of appeals, and answer the questions arising therefrom, in so far only as they have not been answered already in relation to the Travancore-Cochin group. It may be here added that in the Travancore-Cochin appeals (Civil Appeals 143 to 145 of 1954) the appellant is the assessee, A. N. Lakshmana Shenoy, of Messrs. New Guna Shenoy Company, Ernakulam, and the two respondents are the Income-tax Officers of Ernakulam in Cochin and of Kottayam in Travancore. In the other group of appeals, namely, the Mysore appeals, the appellants are the Income-tax Officers of certain income-tax circles in Bangalore and the respondents are assessees who carry on business within the jurisdictional area of the said Incometax Officers. In the Travancore Cochin appeals, the High court of Travancore-Cochin came to a decision against the assessee, while in the Mysore appeals the High court of Mysore came to an opposite conclusion on identical questions of law; that is why in the first group of appeals the assessee is the appellant and in the second group the appellants are the Income-tax Officers.

(2) TRAVANCORE-COCHIN appeals: We proceed now to deal with the Travancore-Cochin appeals. The assessee, A. N. Lakshmana Shenoy, is a hardware merchant who carried on his trade and business for several years in the then States of Travancore and Cochin, with his headquarters at Ernakulam in Cochin. He was assessed to income-tax in both the States under the income-tax law in force there, namely, the Cochin Income-tax Act of 1117 M. E. (hereinafter referred to as the Cochin Act) and the Travancore Income-tax Act of 1121 M. E. (hereinafter referred to as the Travancore Act). He was so assessed by the Incometax Officer at Ernakulam for the Cochin State and the Income-tax Officer at Kottayam for the Travancore State. It is a matter of history that Cochin and Travancore were formerly independent States, and till the lapse of paramountcy, the Crown as represented by and operating through the political authorities provided the nexus between those States and the central Indian government. The Indian Independence Act, 1947, released the States from their obligation to the Crown; but in August, 1947, the Rulers of the two States acceded to the Dominion of India. This was followed by a process of two-fold integration-the consolidation of the States into sizeable administrative units and their democratisation. On 27/05/1949, the Rulers entered into a covenant which was concurred in by the government of India. By that covenant the Rulers agreed that as from the first day of July, 1949, the States of Travancore and Cochin should be united in and form one State with a common executive, legislature and judiciary by the name of the United State of Travancore and Cochin. The covenant further provided that ` there shall be a Rajpramukh for the United State and the Ruler of Travancore shall be the first Rajpramukh; the executive authority of the United State shall be exercised by the Rajpramukh and there shall be a council of ministers to aid and advise him `. Article IX of the covenant said that ` the Rajpramukh shall within a fortnight of the appointed day execute on