( 1 ) THIS is a Letters Patent Appeal against the order of Kotval J. , in Miscellaneous petition No. 466 of 1955.

( 2 ) THE appellant used to carry on business in the State of Nandgaon and did so during the years 1946-47, 1947-48 and 1948-49. At that time, the provisions of the Indian Income-tax Act, 1922, were applicable to the Nandgaon State on account of the extension of that Act to the State in the year 1942. The appellant was assessed to income-tax for the above years under the said act by three separate orders of the Income-tax Officer, dated respectively 29-12-1947, 9-11948 and 29-3-1949, and the tax was duly realised by the State authorities. The State merged with Madhya Pradesh with effect from ]st August 1949 by the state Merger (Governors' Provinces) Order, 1849, end by the Taxation Laws (Extension to Merged States and Amendment) Act 1949 (hereinafter referred to in the judgment as the Taxation Laws Act) the Indian Income-tax Act was extended to the State of Nandgaon with effect from 1st April 1949. In the years 1954 and 1955, the Income-tax Officer issued three separate notices to the appellant under section 34 of the Indian Income-tax Act for re-assessment of tax for the very same -years. The petitioner contested the validity of the notices under Article 226 of the constitution. His petition was heard by Kotval J. , and was dismissed.

( 3 ) THE Taxation Laws Act repealed the Income-tax Act applicable to the State with the only saving in Section 7 as below :

". . . . . . . . . . . . except for the purposes of the levy assessment and collection of income-tax and supertax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income-tax Act, 1922, as extended to that State by Section 3, or, as the case may be, the levy, assessment and collection of business profits tax for any chargeable accounting period ending on or before the 31st day of march, 1948 and for any purposes connected with such levy, assessment or collection. "

The contention of the appellant was that the exception did not cover the case of 're-assessment' and accordingly notices for re-assessment could not be issued under Section 34 of the Indian Income-tax Act, This contention was repelled by the learned Single Judge on the view that the term 'assessment' in Section 7 of the Taxation Laws Act, should be interpreted widely to cover the proceedings of re-assessment.

( 4 ) IN Rajendra Nath v. Commissioner of Income-tax, AIR 1834 PC 30 (A), their lordships of the Privy Council held that the Indian Income-tax Act nowhere imposed any limit of time within which the assessment under the provisions of sections 23 and 29 was to be made, and that the service of notice of demand could, therefore, be made at any time. This decision was explained by their lordships in Commissioner of Income-tax, Bombay Presidency and Aden v. Khemchand Ramdas, AIR 1938 PC 175 (B), in which it was observed that when once a final assessment is arrived at, it cannot be re-opened except in the circumstances detailed in Sections 34 and 35 of the Act. In this connection, their Lordships of the Mysore High Court observed in City tobacco Mart v. Income-tax Officer, AIR 1955 Mys 49 (C) :

"the view taken by the Privy Council was that an assessment became complete when the Income-tax Officer determined the amount due by the assessee and issued a notice of demand under Section 23. The mere fact that the Commissioner of Income-tax could exercise powers of revision under Section 33 of the Income-tax Act or that the Income-tax officer at any time within one year from the date of any demand, may make rectifications, and correct mistakes in his assessment did not make the assessment under Section 23 of the Act anytheless final or the proceedings under the Income-tax Act incomplete. "

( 5 ) THE interpretation of Section 13 of the Finance Act, 1950, which is in terms of section 7 of the Taxation Laws Act, came up for consideration before a Pull Bench of

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