- (1.) THESE are two writ applications filed by the Jaipur Udyog Limited (hereinafter referred to as the Company) and E. C. Gautam, one of the shareholders of this company, to challenge the jurisdiction of the Income-tax Officer and that of the sales Tax Officer to assess the petitioner company for income-tax and sales tax. Since the questions of law which have been raised by the petitioners are common to both the writ applications, we propose to dispose them of by one judgment.
(2.) WRIT application No. 366 of 1961 is filed against the Union of India and the income-tax Officer, Estate Duty-cum-Income-tax Circle, Jaipur impleading therein the State of Rajasthan merely as a pro forma respondent whereby the company has challenged the assessment orders passed by the respondent No. 2 assessing the petitioner company under the Indian Income Tax Act, 1922 for the assessment years 1953-54, 1954-55, 1955-56 and 1956-57. Writ Application No. 114 of 1962 is filed against the Commissioner of Sales Tax, Udaipur, the Sales Tax Officer, district Sawai Madhopur, Gangapur city and the State of Rajasthan challenging the assessment order passed by the Sales Tax Officer on 23rd February, 1957 under rajasthan Sales Tax Act, 1954.
(3.) WE first of all deal with writ application No. 368 of 1961. The petitioner's case is that the Government of the erstwhile Jaipur State was desirous of industrialising the State and therefore it had made an approach to the petitioner company for setting up a cement factory at Sawai Madhopur. The company agreed to establish the present cement factory on the terms and conditions which were ultimately incorporated in an agreement entered into with the State of Jaipur on 18th november, 1948 ( Annexure A) and consequently started the production of cement in the year 1953. The main term of the said agreement on which the company has built up the whole) structure of its case is as under : "clause 16 (a) : The licensee (petitioner company) shall not be liable to pay to the State any income, business profits, excess profits, capital gains and. corporation taxes or any other tax of the nature of: these taxes, i. e. any tax, cess or levy assessed on income, profits or gains by whatever name called, for a period to expire fifteen years after commencement of the working of the cement factory. Any dividends paid, credited or distributed or deemed to have been paid, credited or distributed from any profits and gains made during the period to expire five years after the commencement of the working of the said factory shall also be exempted from these taxes in the hands of the shareholders. ";