Printers (Mysore) v. ARAMCHAND PREMCHAND LTD., AHMEDABAD

The High Court answered the question in the affirma tive and came to the conclusion that the assessee was losses incurred by it in its entitled t:o Baroda business and set them off against the profits made iu the taxable territories. The appellant then moved the High Court and obtained a certificate of fitness. On that certificate the present appeal has come to us. It is necessary here The main contention on behalf of the appellant is that the High Court came to an erroneous conclusion with reg<ml to the true scope and effect of the third· proviso. to s. 5 of the Act. refer to some of the provisions of the Act to under In 1940 the Central Legis st~nd its general scI:eme. lature passed the Excess Profits Tax Act, 1940 (Act No. XV of 1940), to impose a tax on excess profits arising out. uf certain businesses. vVe shall have occa sion to refer to some of the provisions of that Act, in For the pmposes of that Act, the expres due comsc. period" meant (a) any sion "chargeable accounting accounting period falling wholly within the beginning on March 31, 1946, and (b) where any accounting period fell partly within and partly without the said term, such part of that accounting period as fell within the said term. It may be here stated that originally the term was from September I, 1939, to March 31, 1941, several annual Finance Acts the term was but by extended up to March 31, 1946. September 1, 1939, and ending ln 1947 came the Act in which "chargeable account- ing period" means: . (a) any accounting· period falling wholly within the term beginning on April I, J 946, and ending on 'March 31, 1949, and (b) where partly within and partly without the said term, such part accounting period falls 3 S.C.R. SUPREME COURT REPORTS 731 of that accounting period as falls within term. the said 1960 Commissioner of· Income-tax v. Karamchand Premcliand ·Ltd. S. K. Das :J. The Act extended to the whole of India. The world "business" is defined in s. 2(3) of the Act as including any trade, commerce or manufacture, etc., the profits of which are chargeable ·according to. the provisions There of s. 10 of the Indian Income-tax Act, · ! 922. are two provisoes to this definition clause, and second proviso states that all businesses to which Act applies carried on by the same person shall be treated as one business for the purposes of the Act. The expression "taxable profits" is clefinecl under s. 2( l 7) of the Act and it means the ain6unt by which the profits period. exceed the abatement in. respect of that period. ·what is· meant by "abatement" is defined in s. 2(1) of the Act. The charging section is s. 4 and we may that section here, so far as it is relevant for out pur pose, in order to· understand the general scheme of the tax imposed under the Act. during a chargeable accounting "S. 4. Charge of tax-Subject to the provisions of this Act, there shall in respect of any business to whid1 this Act applies, be charged, levied and paid on the amount of taxable profits during any charge able accounting period, a tax (in this Act referred to as "business profits tax'') which shall, in respect of any chargeable accounting period ending on or before the 31st clay of March, 1947, be equal sixteen and two-third per cent. of the taxable pro fits, and in respect of any chargeable . accounting period begini1ing after . that date be equal to such percentage of the taxable profits as may be fixed by the annual Finance Act." Shortly stated, the scheme is that in respect of any business to which the Act applies, there shall be charg· ed, levied arid paid a tax called "business profits tax" on the amount: of the taxable profits, which means the amount exceeding the abatement, during any charge able accounting period; the tax shall be equal to six teen and two-third per cent. of the taxable profits respect of the chargeable accounting period ending on or before March 31, 1947, and in respect of any charge able accounting period after that date, the tax shall ' Commtssioner of Income~tax v. Karamchand Premckand Ltd. S. [(. Das ]. 732 ~UPREME COURT REPORTS [1960] be equal to such percentage of the taxable profits as may be fixed by the annual Finance Act. Then comes s. 5 which is the section dealing with the application of the Act and it is in these terms : "S. 5. Application of Act-This Act shall apply to every business of which any part of the profits made during the chargeable accounting period is chargeable to income.tax by virtue of the provisions of sub-clause (i) or sub-clause (ii) of clause (b) of sub-section (1) of section 4 of the Indian Incorne t ax Act, 1922, or of clause (c) of that sub-section: Provided that this Act shall not apply to any business the whole of the profits of which accrue or arise without the taxable territories where such business is carried on by or on behalf of a person who is resident but not ordinarily resident in the taxable territories unless the business is controlled in India: Provided further that where the profits of a part only of a business carried on by a person who is not resident in the taxable territories or not ordinarily so resident accrue or arise in the taxable territories or are deemed under the Indian Income-tax Act, 1922, so to accrue or arise, then except where the business being the business of a person who is resident but not ordinarily resident, in the taxable territories is con trolled in India, this Act shall apply only to such part of the business and such part shall for all the purposes of this Act be deemed to be a separate business: Provided further that this Act shall not apply to any income, profits or gains of business accruing or arising within any part of India to which this Act does not extend unless such income, profits or gains >tre received in or are brought into the taxable terri tories in any chargeable accounting period, or are assessable under section 42 of that Act.'' \Ve have read the section as it stands to-day. The expression " taxable territories" in the provisoes was substituted for "British India" by the Adaptation of Laws Order, 1950, and the third proviso originally referred to any income, profits or gains of business a.ceruing or arising within "any Indian State" ; then 1960 ComMissioner of Income-tax v. K"rnmchand Premchand Ltd. SX Das J- 1 - . ,,._ , 3 S.C.R. SUPREME COURT REPORTS: 733 · the expression "a Part B State" was substituted, but this was again changed_ by the Adaptation of Law~ (No. 3) Order, 1956, and the present expression "any part of India to which this Act does not extend" was introduced. For the purposes of this appeal nothing turns upon these changes, and :we may read the third proviso as referring to any income, profits or gains of a business accruing or arising in an Indi<m State. Sec tion 6 deals wjth relief on occurrence of "deficiency of profits" an expression which is defined in s. 2(7) of the Act. The rest of the Act deals with matters, such as issue of notice for assessment, assessments, profits escaping assessment, penalties, appeal, .etc., with which we are not directly concerned in this appeal. · the profits made during the chargeable Now, ss. 4 and 5 of the Act make it quite clear that the unit of taxation is the business, that is, any busi~ ness to which the Act applies; and if a person cfrries on more than one business to all of which the Act applies, all the businesses carried on by the same per son shall be treated as one business for the purposes of the Act. Section .5, in its substantive part, states to which business the Act applies and says that the Act applies to every business of which any part of accounting period is chargeable to income-tax by virtue , of. ·provisions of sub-cl. (i) or sub-cl. (ii) of cl. (b) of sub s. (l). of sc 4 of the Indian Income-tax· Act, 1922, or cl. (c) of that sub-section. A reference to 'the afore said provis<ions of the Indian Income-tax Act, 1922, that in so far as they concern the pre shows at once 5 in its substantive part makes the sent assessee s. Act applicable to his business whether the profits ,of the business accrued or arose in India or Baroda; and this i~ so in spite of the fact that the Act extended only Indeed, learned counsel-for the appellant to India. has conceded that had s. 5 stood by itself without any of the provisoes, the Baroda business of the assessee would have come within the' wide ambit of s .. ~ and His the Act woiild be applicable to that business. contention, however, is that the third proviso has the effect of excluding the Baroda business from the pur view of the Act, except in so far _as the income, profits or gains of that business are received or deemed to 31-6 SCI/ND/82- 731 SUPREME COURT HEPORTS [1960] 1960 Commissioner of buow-tax v. Karmnchrmd Prr111rltr111d ],/r/ . SJ<. Das J. · he received ill or brought into India. On behalf ol the assessce the argument is that in its true scope anrl e ect the third proviso has merely the effect of exempt- ing the income, profits or gains of the Baroda business except when they arc received or brought into India, . hut the business itself is not: excluded from the pur view of the Act; the business is still one to 'rhich Act applies under the sul>stantive part of s. :"i and as the third proviso .exempts income, profits or gains only, the losses of the Baroda business can be set off against the profits of the business in India. These are the two main rival contentions which· we have to consider in this appeal. Now, let us examine a little more closely ss. 4 and 5 of the Act. v\'c have stated earlier that s. 4 is the charging secti•)n, which levies a tax on the amount of taxable profits during any chargeable accounting period, in respect of_ any brnincss i-o which the Act applies. The corresponding section in the Excess Profits Tax Act, 1940, was also s. 4 thereof, which levied a tax on the amount by which the profits during any chargeable accounting period exceeded the standard profits in respect of any business to which that Act applied. lJ nclcr the Excess Profits Tax Act, l 'l4·0, as also nnder the Act under onr consicleratio11, the unit is the husiness-bnsiness· which the Act applies. For the application of the Act WC have to go to s. !J. vVc have i)ointed 0111. that '' in its substantive part makes the Act applicable >. to cvcrv hminess of which any part of th'e profits chargeable to income-tax by virtue ·of the provisions of sub-cl. (i) or sub-cl. (ii) of cl. (b) of sub-s. (1) of s. 4 of the Indian Income-tax Act, 1922, and, thns makes the Act the Baroda. bnsincss of the assessce. The question then is-does the third proviso to s. :; exclude that business except in so far as the income, profits or gains of that. business are received or deemed to he received in or are brought. into the taxable territories in any chargeable accotinting period? If that is the true scope and effect of the third proviso, then the appellant is entitled to succeed. countrary, the third proviso merely makes the Act in applicable to income, profits or gains of the Baroda bm1ness unies> such income, profits or gains applicable to If, on 1960 Co.mmissioner qf Income· tax v •. Karamchand Premchand Ltd. S. K. Das]. 3 S.C.R. SUPREME COURT REPORTS 735 received or deemed to be received in or are brought into the taxable territories, but does not exclude the business from the purview of ss. 4 and 5, then the answer given by the High Court is correct. The High Court has stated that whichever view is taken the third proviso leads to certain difficulties, and in a case where much can be said on both sides. the benefit of any ambiguity of language must be given to the assessee. \Ne agree with the High Court that the question is not quite free from difficulty; but on the language of the proviso as it stands, the answer given by the High Court appears to us to be the correct answer.·. It is not the case of the appellant that the first and the second provisoes to s. 5 apply to the facts of case. But it: is significant to note the phraseology of these two ptovisoes and contrast them with the third proviso. The first proviso says:-· "Provided that the Act shall not apply to any business the whole of the profits of which accrue or arise without the taxable territories, etc.., --- . therein from the purview of The language is clear enough to exclude the business referred to the Act. Similarly, the second proviso excludes under certain circumstances part of a b11siness aiicl uses appropriate language to give effect to that exclusion. By a •legal fiction as it were, it divides a business into two parts, one separate from the other, and makes the Act appli cable to one of them only. Unlike the other two provisoes, the third proviso does not use the language of exclusion in respect of' any business. vVhat it takes out of the ambit of "income, profits and gains" of a particular business. The language is thus more apt to effectuate an exemp tion from tax of rather than an exclusion of the bl.1siness from the purview of the Act. On behalf of the appellant it is contended that such a constructi?n results in this anomaly that if the income, profits or gains are not brought into India, they escape tax and yet tl1e losses of a business which is ontsicle India are taken into consideration in computing the profits, etc., in lndia. This, it is argued, could not have been the object of the legislature in "income, profits or gains" the Act is merely 736 SUPREME COURT REPORTS [l 960j 1960 Curn1nissioner lncome~lax v. Karamchand Premchand Ltd, enacting I he third proviso to s. 5 uf the Act. It is contended that the object was to exclude the business of in an Indian State as also the income; profits or gains thereof, \Vere recc1vcc.l in or brought into J ndia. This argument. is not devoid of plausibility and requires careful consideration. ttnle~s ~uci1 }Jroiits, etc., • . - +- S.K. Das J. \Ve may here refer tu the relev;111t provisions of the Excess Profits Tax Act, l 9·10. Section 5 of that Act in its substantive part and the first and second pro visoes thereto were worded in identical languag-e, but the third proviso to s. 5 of the Excess Prolit:s Tax Act, HMO, was worded quite dilferemly the third proviso to s. 5 of the Act. The third proviso to s. 5 of the Excess Prolits Tax Act, lV-IU, stated: "Provided further ·that this Act shall not apply to any busiue" the 11·holc oI the profits of which accrue or arise Jn a Part B State, and where the profits o[. a pan of a business accrue or arise in a Part ll State, sucli part shall, for the purposes of this provision, be clcemcd to be a separate business the whole of the profits of which accrue or arise in a Part B State, and the other part: of the business shall, for all the purposes oI this Act, be deemed to be a separate business." The lang·uagc used was clearly one of exclusion, and it said that the Excess Profits Tax Act was not ap plicable to a business the profits of which <kerned 01 arose in a Part ll State. \\'hy then clid the legislature language in the third proviso to s. !i of use different the Act? On behalf of the appellant. it has been sub mitted that the change in language is deliberate and the reason for the change is to make the income, profits or gains of a business accruing in an Indian or Part B State liable to tax 11·hen such income, profits or gain; are brought in India while under the third proviso tu s . .5 of the Excess Profits Tax Act, they were not liable to tax even when they were broug·ht int,o India. On behalf of the assessee, however, it has been submitted that the change in lang1iage is due to a different reason altcwether. The third ii of the Excess Profits Tax Act, l !J40, and s. 1+(2)(c) (now deleted) of the Indian I ncome-t:ix Act, I !l~2, wc1·e cmcted :11 about the same time, and the broad object of both rhc J>rol'iso to s. 0 . 3 S.C.R. SUPREME COURT REPORTS 737 chargeable to the change in profits became provlSlons was to exclude profits of a business ·in an Indian or Part B State from charge of tax; but under the Excess Profits Tax Act, 1940, such profits were not chargeable even if received in or brought into India whereas under s. 14(2)( c) of the Indian lncome tax if tax Act such received in or brought into· India. This difference, learned counsel for the assessee· states, was no doubt done away with by language· of the third proviso to s. 5 of the Act; but the change in language did smnething more, because it assimilated' the position under the proviso· t:o that under s. 14(2)( c) namely, that though of the Indian Income-tax Act, . profits of a business. in an Indian State cannot be taxed the taxable territories, unless they: are brought into yet the losses incurred can be adjusted' in computing the profits of the business as a whole. Learned counsel for the assessee has· relied on the decision of this Court: in Commissioner of lncornc-tax, ·Mysore, Tra·uancore Cochin and Coorg v. lndo-Afercontile Bank Ltd. (')and the decisions of the Bombay High Court ·in Commis sioner of Income-tax., Bombay City v., Murlida·r iVl.athu. rawalla Mahajan Association (2) and Commissioner of Excess Profits Tax, Bo111bay City v. Bhogilal H. Patel. Bombay ('). The first two decisions cited above con sidered the effect of s. 21( I), Indian Income-tax Act, 1922, with special reference to the first proviso thereto (as it stood at the time relevant therein) and its inipact on ~. 10 of tl1e said Act. It was held that sub-s. (I) of ~. 2-1 dealt onlv with set-off of loss under one head and therefore ag'.aimt profits rn; der any other head, the old first proviso to sub-s; (l j of s. 21 applied and barred the rig·ht of set-off only where a loss in the Indian State was sought to be set off against Indian profits under any other head; where, however, the assessee sought to set off his loss in the I hdian State against his Indian profits under the same head, e.g., set-off of loss incurred in a pusiness carried on in an l ndian State against the profits of the same or another business carried on in India, the prm·iso did not apply am! the assessce was en ti tied to such set-off under s. I 0 (!) [19"9] Supp_ 2 S.C.R. 2S6. (2) [19!P.J JG I.T.R. J.t:;, (3) [1952) 21 l.T.R. Z2. 1960 Commissiouer of 11lcorne-tax v. I( aramchand Premclumd Ltd. S.K. Das J. / .. -- . • 738 SUPREME COURT REPORTS [1960] . t 5 "th d t regar o · e t 1r proviso o s. '960 of the Indian Income-tax Act. Learned counsel for -. -. the assessee has submitted that the same principle f th th h' d l' Commissioner of app !BB WI e o Imome-ta> v. Act. Learned counsel has submitted that as under s. 10 of the Indian Income-tax Act, different businesses Karamchand Premchand Ud. constitute one head and in order to determine what s. K. Das J. are the profits and gains of a business under s. 10 an assessee is entitled to show all his profits and set off against those profits losses incurred by him, in the same head ; so also under s. 5 of the Act, the Baroda business of the assessee is within the am bit of the Act, though the income, profits or gains thereof are excluded by the third proviso unless they are received or brought into India. He has pointed out that the position under the Excess Profits Tax Act was different, as was explained in Bhogilal Patel's case (1 ) where the learned Chief Justice said : " This contention of Mr. Kolah is based on the language used in the proviso, namely, that 'this Act shall not apply to any business thew hole of the profits of which accrue or arise in an Indian State'. Now, this contention is obviously fallacious, because the proviso does not say that the Act shall not apply to the profits of a business which accrue or arise in an Indian State. What the proviso says is that the Act shall not apply to any business the whole of the profits of which accrue or arise in an Indian State. The expression 'the whole of the profits of which accrue or arise in an Indian State ' is an expression which indicates the nature of the business which is excluded from the purview or ambit of the Act". Now, the third proviso to s. 5 of the Act uses not the phraseology of the Excess Profits Tax Act, but the very phraseology which according to the learned Chief Justice would have made all the difference. Learned counsel for the assessee has argued, and we think it has considerable force, that the legislature had before it the language used in s. 14 (2) (c) of the Indian Income-tax Act and it knew the effect of those provi sions and it used the same language in the third proviso to s. 5 of the Act. If the object of the legisla ture was to exclude the business itself from the ambit (t) (1952] 21 I.T.R. 72. 1960 Commissioner of Income-tax v. Karamchand Premchand I:.td. S.K. Das J- 3 S.C.R. SUPREME COURT REPORTS 739 of the Act wl1ile taxing the profits which were brought language which failed to achieve that object. then it used territories, taxable territories. the taxable reliance is placed on the decisions On behalf of the appellant it bas been pointed out - that the expression used in the third proviso to s. 5 is - "Provided further that the Act shall not apply to any income, profits or gains of a business, etc." It argued that this language, (namely, that the Act shall not apply) is apt to exclude· from the purview of the Act business the profits of which accrue or arise in an Jnclian State, - except in so far as _ such profits are brought into In support of this argument a reference has been made to s. 4(3) of the Indian Income-tax Act as it stood prior to 1939 in C.ommis Income-tax, Madras v. M. T. T. K. M. M. sioner of S. M. A. R. Somasundaram Chettiar (1) and Commis sioner of Income-tax, Bombay v., The Provident Invest ment Co. Ltd. (2). It is true that s. 4(3) of the Indian I ncome-t:ax Act, as it stood prior to 1039, said that this Act (meaning the Indian Income-tax Act, 1 ~l22) shall not apply to certain classes of income", and in the two decisions cited it was held. that the word '"business" mca nt a business whose profits were being assessed in the year under consideration ·and there was no justification for deduction of the expe1ises of a foreign btisiness. think that the use of "the Act shall not apply", is. decisive the expression, in this case. \;\Te have to read the third proviso as a whole :ind in the context in which it occurs, in order to find o_ut what it means. So read it is difficult to hold that it has the effect of excluding the Baroda busi ness except in so far as the prof-its thereof are brought into the taxable territories. ·what it says in express terms is that the Act shall not apply to any income, profits or gains of business accruing or arising in an f nd ia n State, etc. It does not say that the lnisiness itself is excluded from the purview of the Act. We proviso in the have to read and construe the third ·context 'of the substantive part of s . .5 which takes in the Baroda business :ind the phraseology of ,the first and second provisos thereto, which clearly uses the 'Ne do not, however, (l' A.I.R. 1928 Mad. 487. , (2) (1931) I.L.R. 56 Born. 92. • 1960 Commissioner of Incomt~lax \'. ll~,irt•mrhmuf Prnnclwud Ltd. S.K. Das J. • 4 - - HO SUPREiVm COl'RT REPORTS [1960] it excl11clccl to consider what l:111g11agc of exclrnling· the business referred to therein. The third pnl\'iso cloes not use th:il language and 1d1at learned counsel for the appellant is seeking to do is to a~tcr the l:i.ngu1gc of the proviso so as to n1:i.ke it rc:1cl as 1ho11gh business the income, profits or p;ai'ns of \\'liich accrue or arise in :m Indian is that 1he third proviso docs Staie. The diflicnhy ou the contr~iry, it uses language which not say so: rncrch· exempts from tax the income, profits or gains unless such incnn1c, profits or g·:i.ins arc received in or hro11ght into India. Next. we have the expression "income, profits or g·ains"' means. In the context of 1he third proviso, it cannot include losses because the income, latter pan of the pro\'iso .says "unless such profits nr g;iins into the taxable arc received, etc., territories". Obvio11sly, losses cannot be hro11ght into 1he t·:1x:ihle territories except in an accounting sense, in the :rnd the expression "income, profits or gains" context cannot include losses. The expression mnst have the same rncanii1g· thro11ghout the proviso, anrl cannot have one meaning an<i a the Lnter part o[ the proviso. di1Te1'ent mc:rning in The ;ippcllant crnnot therefore the third say that prm-iso exclpclcs the business altogether, because it takes away from the ambit of the Act not only income, profits or gains hut also losses of the business referred to therein. first part in the l4(2)(c) of the On behalf of the appellant it has been arguer! that thong·h the language of the third proviso to s. !J of the· Indian that of s. Act is similar to 1 ncome-tax Act. the language of the t11·0 provisions is not identical and it is not correct t:o say that their effect is snbstantiall\' the same. It is pointed out 1'11at the language of s. i'-1(2)(c) was one of exemption only in respect of ,any income, profits or gains accruing or arising in an Indian State, though for purposes of "total income"' the Income-tax Act applier! thereto, and therefore the normal process of aggregating profits and losses where\'cr they occnrred could be adopted. But says learned counsel for the appellant, the posi tion is otherwise under the third proviso to s. 5 of the "the Act Act.. because, firstly, it uses the expression, 1960 Commissi0111Jr of Income-tax v. Karamchand Premchand Ltd . S.K. Das J. 3 S.C.R. SUPREME COURT REPORTS 741 shall not apply" and secondly, there is no question of exempting the profits from tax while including them for the purposes of "total income". vVe agreed that the complication of excluding the profits from tax while including them for determining "total income" does not . arise under the third proviso to s. 5 of the Act; but the argument presented is the same as we have dealt with earlier. The argument merely takes us back to the question--does the third proviso to s. 5 of the Act merely exempt the income, profits or gains or does it exclude If it excludes the business, the appellant the business? is right in saying that the position under the proviso is not the same as under s. 14(2)(c) of the Indian Income tax Act. If, on the contrary, the proviso merely exempts the income, profits or gains of the business to which the Act otherwise applies, then, the position is the same as under s. 14(2)(c). It is perhaps repetition, but we may emphasize again that exclusion, if any, must be done with reference to business, which is the unit of taxation. The first and second provisos to s. 5 do that, but the third ' proviso does not. Lastly, it has been contended that the construction adopted by the High Court is likely to lead to conse quences which the legislature manifestly could not have intended. This contention has been pi;~ssed in respect of two matters: (a) computation of capital under the rules in Schedule II of the Act in a case where the assessee company sustains a loss in an Indian State; and , (b) relief for deficiency of profits where th'e assessee makes profits in an Indian State but sustains a lossin India. As to the first matter, it has been fully dealt with by the High C<;mrt with reference to r. 2A. of the Rules in Schedule II and it has been rightly pointed out that no difficulty really arises by reasons of r. 2A. Nor are we satisfied that any real difficulty arises with regard to relief for deficiency of profits when the assessec makes profits in an Indian State but sustains a loss in India. The Ad will not apply to such profits unles:. thev are brought into India, and if thev are brought inw India, s .. 6 will apply with reg~rd to relief on the ground It is -unnecessary to consider of deficiency of profits. 32--6 SCI/ND/82 - ' ' } 1960 Commissioner of lnco.ne-ta,,; v. Knramch,,nd Pre, nchand Ltd. S.K. Das J. 742 SUPREME COURT REPORTS [1960] here any hypothetical difficulty which may arise in the application of s. 6. . The appellant relies, on the third proviso to s. 5 of the Act in support of the contention that it excludes the Baroda business of the assessee and the losses of that business cannot be set off against the profits of the business in India, and the appellant can succeed only· on establishing that the proviso clearly and without any ambiguity excludes the Baroda business. We agree with the High Court that if there is any ambiguity of language, the benefit of that ambiguity must be given to the assessee. However, the· conclusion at which we have arrived is that on the language of the proviso as it stands, it does not exclude the Baroda business of the assessee but exempts only the income, profits or gains thereof unless they are received or deemed to be re ceived in or brought into India. Accordingly, the High Court correctly answered the question of law referred to it. The appeal fails. and is dismissed with costs. Appeal dismissed. 1960 April 28 H. C. NARAYANAPPA AND OTHERS v. THE STA.TE OF MYSORE AND OTHERS (B. P. Sinha, C.J.,' Jafer Imam, A. K. Sarkar, K. Subba Rao and J.C. Shah, JJ.) . Transport Business-Stage carriages-Exclusion of private operators-Competence of Parliament to create monopolies-Grant of monopoly to State for transport business-Scheme framed by State for State Transport Undertaking-Legality-Motor Vehicles Act, 1939 (IV of 1939), Ch. IV A, ss. 68C, 68D (2)--Constitution of India, Arts. 12, 13(3)(a), 19(l)(g), 19(6), 298, Seventh Schedule, List II, entry 26, List III, entries 21, 35. In exercise of the powers conferred by s. 68C of the Motor Vehicles Act 1939, the General Manager of the Mysore Govern ment Road Transport Departmem published a scheme for the ex clusion of p~ivate operators on certain routes in a specified area and reservation of those routes for the State Transport Undertak ing. The scheme was s. 68D(2) of the Act ater the Chief Minister of the State bad given an opµortunity to the operators affected by the scheme to make r~i:resentations objecting to it. The petitioners who were approved by the Government tf-, .... - '