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Judgment
The petitioners have filed this writ petition for declaring the Compulsory Deposit Scheme (Income Tax Payers) Act, 1974 to have been passed
without jurisdiction, and as such not applicable to the State of J & K.
The learned counsel for the Union of India, Mr. K. N. Raina, has instead of filing a reply affidavit, openly at the bar conceded the legal position
on the basis of which the writ petition has been filed. In fact it was he who drew the attention of the court to various Entries in the 7th Schedule of
the Constitution, especially to the Entry 20 and to the Entry 97. His argument is that these Entries, especially, Entry 20 was not applicable to the
State of J & K in a modified form, it would not cover the impugned Act, and, under these circumstances without following the procedure laid
down in Art. 370, the impugned Act could not have been made applicable to the State of J & K
It has also been submitted by the ld. counsel for the Union of India that the impugned Act came into force in 1975 when the Proclamation of
Emergency was in force, by virtue of Art. 370 as applicable to this State, the Parliament had powers to legislate for the State in relation to matters
not enumerated in the Union List, as applicable to the State of J & K. The Emergency was, however, revoked in 1977 and the impugned Act
having been given effect during the Emergency, ceases to effect on the expiry of six months after the Proclamation of Emergency ceased to
operate. As such also the impugned Act was no longer in force in the State J & K. 4. As held above the impugned Act being not in force now, the
notice issued to the petitioners for depositing the compulsory deposit for the years 1978-79 and 1979-80 are, hereby held to have no force in law
and as such are held to be without jurisdiction.
In the result it may be stated further that the impugned Act, not being in force in the State of J & K, the depositors are entitled to the refund of
already deposited amounts under the impugned Act.
The Writ Petition is accordingly disposed of.