1. This petition under Art. 226 of the Constitution of India which was originally instituted by the former Ruler of the then Princely State of Mysore, and, which, after his death, is now being prosecuted by his legal representatives is directed against the Notification No. 266/F. No. 22/21/63-ITA-II dated 8th September 1971, issued by the Central Government, first respondent herein, purporting to delete petitioner's Palace at Mysore from the schedule to an earlier Notification No. 31-IT. Dated 14th May 1954, issued pursuant to clause (iii) of paragraph 15 of the Part B States (Taxation Concessions) Order, 1950, by which the Palaces at Mysore alongwith two other Palaces of petitioner at Bangalore and Ootacamand respectively had come to be declared as Official residences of petitioner. By virtue of the said declaration of 14-5-1954 the income from the said three places were exempted from income-tax and super-tax and not includible in the total income or the total world income of then Ruler of Mysore. By the deletion purported in the notification of 8-9-1971 the Palace of the Mysore ceased to be recognised as official residence of the former Ruler and consequently income there from became exigible to income-tax and super-tax. This deletion is challenged in this writ petition.
2. Prior to the commencement of the Constitution of India, Petitioner was the Ruler of the then State of Mysore and after the then State of Mysore and after the commencement of the Constitution Mysore became a part B State in the Union of India. The Indian Income-tax Act, 1922 (hereinafter referred to as the '1922 Act') was extended to the then part B State of Mysore with effect from 1st of April, 1950. Thereafter, s. 60A empowering the Central Government, to grant exemptions, if it is considered it necessary or expedient so to do for avoiding any hardship of anomaly or removing any difficulty arising as a result of the extension of the '1922 Act', inter-alia, to part B States, was introduced into the '1922 Act' Pursuant to and in exercise of the power vested by the said s. 60A, the Central Government promulgated part B States (Taxation Concessions) order, 1950. Paragraph-15 of that order reads :
'15. Exemptions, - (1) Any income falling within the following classes shall be exempt from income-tax and super-tax and shall not be included in the total income or total world income of the person receiving them;
i) Omitted as unnecessary.
ii) Omitted as unnecessary.
iii) The bona fide annual value of the palaces of Rulers of Indian States which are declared by the Central Government as the Official residence of such Rulers; iv) XX XX XXX
For the purpose of clause (iii) of para 15, the Central Government issued a notification dated 14th May 1954, which is at Annexure 'A' to the petition. In relation to the Ruler of the quondam Princely State of Mysore, three Palaces viz. The Palaces at Mysore, Bangalore and Fernhill, Nilgiris respectively were all declared as the Official residences of the former Ruler of Mysore. This is at Sl. No. 61 of Annexure 'A'. Consequently the income from the said Palaces stood exempt from income-tax and super-tax and were not includible in the total income or the total world income of the person receiving them.
It would, however, appear that by a letter No. 22/21/63-ITA II dated 8th July, 1971 from respondent-2 to the petitioner, the declaration touching the Place at Mysore as the Official residence of the original petitioner was, for certain reasons set-out therein, proposed to be withdrawn and petitioner was given an opportunity to discuss the matter with Member-in-charge of Income-tax, Central Board of Direct Taxes before a final decision was taken in the matter. In response to this communication, petitioner caused a reply dated 24th July, 1971, as per Annexure against the legality of the action proposed were taken.
Thereafter the Central Government issued the impugned notification dated 8th September 1971 at Annexure 'D' deleting the Palace at Mysore from the Entry at Serial No. 61 in the table annexed to the Notification dated 14th May, 1954 at annexure 'A'. The invoke provisions of para 15(iii) of the part B States (taxation Concessions) Order, 1950 read with clause (L) of s. 297(2)(1) of the Income-tax Act 1961 (hereinafter referred to as the '1961 Act'). The reason for the action is stated to be that a part of the Palace at Mysore had been let-out by the former Ruler to earn rents, and that, therefore, the Central Government considered it expedient to withdraw the recognition as official residence respecting the Palace at Mysore.
3. We have heard Sri M. R. Lakshmikantharaje Urs, learned counsel for the petitioner, and Sri S. R. Rajashekara Murthy for the Revenue.
Learned counsel for the petitioner, in support of his contention that Annexure 'D' is bad in and without the authority of law, has urged the following grounds :
(a) That there is no power vested in the Central Government to issue the impugned Notification at Annexure 'D' inasmuch as, while after the repeal of the '1922 Act' by s. 297 of the '1961 Act' - the operation of part B States (Taxation Concessions) Order, 1950 was expressly continued by virtue of clause (L) of s. 297(2) of the '1961' Act' was however not presented and it was only on 9-9-1972 long subsequent to the date of impugned notification a proviso expressly enabling such rescission was introduced in the '1961 Act'
(b) that the Central Government having itself induced petitioner to grant a lease of a part of the Mysore Palace were estopped from issuing the impugned notification; and
c) that the notification at Annexure 'D' was violative of the constitutional pledge of equality before the law guaranteed under Art. 14 of the Constitution.
4. Re : Point (a) : So far as ground (a) is concerned, the main contention is that as on the date of the impugned notification there was no power in the Central Government to withdraw or amend the earlier notification at Annexure 'A'. Such a power the argument proceeds was acquired only on and after 9-9-1972 when provison to clause (L) of sub-s. (2) of s. 297 of the '1961 Act' was inserted pursuant to the Rulers of Indian States (Abolition of Privileges) Act, 1972. In other words the contention is that while the said clause (L) of s. 297(2) of the '1961 Act' provided for the continuance of any notification issued u/s 60A of the '1922 Act' it did not till 9-9-1972, envisage or confer any power of rescission. In our opinion the argument is unsound and proceeds on propositions of statutory construction which are clearly untenable. The notification contemplated by the said clause (L) of s. 297(2) is an obvious reference to the statutory orders enable to be made u/s 60(1) of the '1922 Act'. Part B states (taxation Concessions) Order, 1950, was promulgated pursuant to and in exercise of power u/s 60A of the '1922 Act'. The notification at Annexure 'A' was issued pursuant to clause (iii) of para 15 of the Statutory order.
We may now notice the language of s. 60A of the '1922 Act' and s. 297(1)(L) of the '1961 Act'. The former reads;
'60A. Power to make exemption, etc., in relation to merged territories or to the territories which immediately before the 1st November, 1956, were comprised in any Part B State or to Chandernagore. If the Central Government considers it necessary or expedient so to do for avoiding any hardship or anomaly, or removing any difficulty, that may arise as a result of the extension of this Act to the merged territories or to the territories which immediately before the 1st Nov., 1956, were comprised in any Part B State or to Chandernagore, the Central Govt. may, be general or special order, make an exemption, reduction in rate or other modification is respect of income-tax in favour of any class of income, or in regard to the whole or any part of the income of any person or class or persons; Provided that the power conferred by the section shall not be exercisable in the case of merged territories and the territories which immediately before the 1st November, 1956, were comprised in Part B States other than the state of Jammu and Kashmir, after the 31st day of March, 1955, and in the case of the State of Jammu and Kashmir and Chandernagore, after the 31st day of March, 1959, except for the purpose of rescinding an exemption, reduction or modification already made'.
Clause (L) of s. 297(2) of the '1961 Act' reads :
'(1) any notification issued under sub-s. (1) of s. 60 or s. 60 or s. 60A of the repealed Act and in force immediately before the commencement of this Act shall, to the extent to which provision has not been made under this Act, continue in force until rescinded by the Central Government'.
with effect from 9-9-1972 pursuant to the Rules of Indian States (Abolition of Privileges) Act, 1972, the expression 'until rescinded by the Central Government' was omitted and the following provison introduced :
'Provided that the Central Government may rescind any such notification or amend it so as to rescind any exemption, reduction in rate or other modification made there under';
If what is provided by s. 297(2)(L) is the continuance of that statutory order, then on parity of reasoning the power to recognise or declare any Palace as the official residence of a former Ruler and the power to rescind or amend any such notification which is implicit and included in that power is also preserved. That would be the clear effect of s. 21 of the General Clauses Act.
The argument for the petitioner is that it is only after 9-9-1972 that the Central Government acquired for the first time the power to rescind any notification. According to the argument, proviso to s. 60A of the '1922 Act' which enabled a recession of the exemption was not kept alive u/s 297(2)(L) of the '1961 Act'. The fallacy of this argument consists in the understanding that the source of the power to rescind flowed from the proviso to s. 60A of the '1922 Act' and that since that power to rescind u/s 60A of the '1922 Act' was not, according to the argument, preserved in the '1961 Act', but introduced for the first time on 9-9-1972 by means of the proviso, the Central Government had on 8-9-1971 no power to issue the impugned notification.
A proper reading of the provison to s. 60A would show that the power to rescind was not created by or flowed from the provison to the said s. 60A and that while it merely recognised the power inherent in the Central Government to rescind any notification, it stipulated and imposed restrictions on the exercise ability of the power under the main provision of s, 60A itself on and after certain dates. The power to rescind a notification was inherent in the power to issue to issue the notification and indeed that power was recognised in s. 297(2)(L) itself is clear from the expression 'until rescinded' obtaining in the clause. We may refer to s. 21 of the General Clauses Act for the rule of construction in that behalf. The power to rescind existed even prior to 9-9-1972 and it was not necessary for the Central Government to appeal to or draw upon the provison introduced on 9-9-1972 to exercise any such power or recession. Sri Urs, learned Counsel for petitioner sought to make another point in this connection. He said that the notification at Annexure 'A' having been issued pursuant to the statutory order made u/s 60A of the '1922 Act' the Central Government having considered it necessary and expedient so to do for the purpose of avoiding hardship to the Rulers of the former Indian States, any notification with drawing any such concession should be proceeded by the formation of opinion on the part of the Central Government that on the same considerations of avoidance of hardship it was no longer necessary to continue the concession. Formation of such an opinion, it is urged, is not shown to have preceded the issue of the impugned notification. Support for this argument was sought to be drawn from the language of s. 21 of the General Clauses Act, where it provides that the power to rescind or amend is exercisable 'in like manner' and subjects that power 'to like conditions'. The conditions referred to in s. 21 subject to which the power to rescind could be exercised are the conditions to which the order issued under the main Act must be made subject; and do not contemplate those conditions upon the fulfilment of which the right to issue an order arises under the main Act, S. 21 of the General Clauses Act is in pari materia with s. 32(3) of the Interpretation Act, 1889 in England and Provides a rule of construction. The language of s. 21 is not hedged in by any expressions such as 'unless there is any thing repugnant in the subject or context'. As in s. 12 of that Act and therefore the power to rescind must be held to be without any limitations or conditions (See : Ranchhod Zina v. Patankar; : AIR1966Guj248 (FB).
We, accordingly, hold and answer point (a) against the petitioner.
5. Re : Point (b) : Point (b) relates to ground of estoppel in paras 6 and 12(ii) of the memorandum or writ petition to the effect that the lease of a part of the Palace at Mysore having been granted at the insistent requests of the Central Government itself and that the Central Government having itself induced the petitioner to grant the lease, it could not take advantage of its own acts and stands estopped from withdrawing the exemption. The allegation that Central Government put pressure on the petitioner to lease out a part of the Palace has been denied in the course of the statement of objection filed by respondents. In this context, it requires also to be noticed that this contention does not find a place in the representation dated 24-7-1971, at Annexure 'C', filed by the petitioner in response to the proposal to withdraw the exemption contained in Annexure 'B'.
It is not alleged by petitioner that a representation was implicit in the transaction of the lease that the exemption from tax pursuant to the said statutory order would remain immutable notwithstanding the proposed lease. That apart, in exercising the power of recession the Central Government was exercising a statutory power, and petitioner's plea in this behalf is in effect a plea of estoppel against exercise of a statutory power. 'Generally, the State is not subject to estoppel to the same extent as is an individual or a private corporation. Otherwise, it may be rendered helpless to assert its powers in Government. Therefore, as a general rule the doctrine of estoppel will not be applied against the State in its governmental public or sovereign capacity. An exception, however to the State where it is necessary to prevent fraud or manifest injustice'. (See American Jurisprudence, page 783 paragraph 123, quoted with approval : 1973CriLJ280 ).
The circumstances pleaded by the petitioner in support of the plea of estoppel, in our opinion, are not sufficient either on facts or in law to sustain it. Accordingly, point (b) is also held against the petitioner.
6. Re : Point (c) : The last contention urged by Sri Urs is that in missing the impugned notification at Annexure 'D' petitioner has been singled-out for a hostile discrimination in view of the alleged circumstance that in case of Rulers of other former Indian States no withdrawal of exemptions have been made under similar circumstances. The averments in the petition is support of this plea are as follows :
' .... In fact, to the best of my information, most of the Rulers have let out certain portions which constitute Annexure to their Palaces to local authorities, to the Central Government and others. In fact, on the day when the Taxation Concession order came into being and also subsequently, most Rulers have let out portions of their Palaces to others. With reference to them, there has been no withdrawal of exemption and it is only in my case that the said exemption is only in my case that the said exemption is sought to be withdrawn. Since all these Palaces are placed on equal footing, there is no difference at all between the other Palaces and mine, and Central Government in picking and choosing the Mysore Palace for purposes of withdrawal of exemption while leaving the other Palaces similarly situated untouched, has violated Article 14 of the Constitution of India. I state that the impugned notification is discriminatory and is therefore unconstitutional and void'.
In the statement of objections, respondents countering these allegations have allegations have stated thus :
(xiii) It has also been alleged that the petitioner has been singled out for withdrawal of Notification and on this ground it has been alleged that it violated Articles 14 and 19 of the Constitution of India.
(xiv) The allegation of isolating the petitioner for withdrawal of Notification is emphatically denied, Exemptions have been withdrawn in the case of other Palaces also, which were found on review, to have been let out. For instance, Notification No. 117 (F. No. 22/21/63-I-T.A.II) dated 19-4-1971 in respect of Rangamahal, Darbargarh. A copy of the said notification is placed at Exhibit 'III'. It is to be noticed that the allegations contained in the petition in support of this pleas are in general terms and have been promptly denied by respondents. Petition does not contain any specific averments to show what those similarly circumstanced cases are and how petitioner and the other Rulers concerned have been dissimilarly treated. A challenge to executive action on the ground that it violates Article 14 must be pleaded and proved if it is so succeed. Factual averments in this behalf must be made with sufficient specificity, so that the respondents have notice of petitioner's allegations and have an opportunity to meet the same. In the present case, we are constrained to hold, the allegations on which the plea of hostile discrimination its founded lack specificity and do not measure-up to the required standards of pleadings and in view of the respondents' denials cannot be considered sufficient to sustain the plea. Thus on point (c) also petitioner fails .
7. No other contentions were urged.
8. In the result, for the reasons stated above this writ petition fails and is dismissed. Rule discharged. However, having regard to the circumstances of the case, parties are directed to bear their own costs.