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Commissioner Of Income-Tax v. Menezes Farmaco.

Bombay High Court

Dec 1, 1998

Judgment

Subsequent
References

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Structured Summary of the Opinion (Reference under section 256(1) of the Income-tax Act, 1961)

Factual and Procedural Background

The assessee, a registered firm, received a Central subsidy during the previous years relevant to assessment years 1985–86 and 1986–87. The Assessing Officer reduced the cost of plant and machinery for the purpose of determining 'actual cost' for allowance of depreciation on the ground that the subsidy would reduce the cost of the plant and machinery. The assessee appealed to the Commissioner of Income-tax (Appeals) (CIT(A)), who held that the Central subsidy need not be deducted from the cost of plant and machinery for the purpose of allowing depreciation, relying on the Andhra Pradesh High Court decision in CIT v. Godavari Plywoods Ltd.

The Revenue appealed to the Income-tax Appellate Tribunal (the Tribunal). The Tribunal relied on this court's decision in Commissioner Of Income-Tax v. Elys Plastics Pvt. Ltd. and other High Court decisions that had held subsidies granted on fixed capital investment were not deductible from the cost for computing depreciation, and it dismissed the Revenue's appeal. The Revenue sought a reference to this court under section 256(1) on the ground of divergent High Court opinions (notably the Punjab and Haryana High Court in CIT v. Jindal Bros. Rice Mills), and the Tribunal referred the question of law set out below to the court for opinion.

Legal Issues Presented

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in upholding the decision of the Commissioner of Income-tax (Appeals) that the amount of Central subsidy received by the assessee should not be reduced from the cost of the assets for the purpose of allowing depreciation?

Arguments of the Parties

Revenue (Mr. R.V. Desai, learned counsel)

The Revenue candidly acknowledged that the controversy is covered by the Supreme Court decision in Commissioner Of Income Tax, Hyderabad v. P.J. Chemicals Ltd., [1994] 210 ITR 830, which held that Central subsidy should not be deducted from the actual cost for the purpose of allowance of depreciation.
However, the Revenue submitted that P.J. Chemicals need not be followed in the present case in view of a later Supreme Court decision, Sahney Steel and Press Works Ltd. v. CIT, [1997] 228 ITR 253, implying that Sahney may affect or qualify the applicability of P.J. Chemicals to the present facts.

Amicus Curiae (Mr. G.S. Jetley, senior counsel)

Mr. Jetley submitted that there is no conflict between the Supreme Court decisions in P.J. Chemicals (1994) and Sahney Steel (1997) because they addressed different legal questions.
He argued P.J. Chemicals dealt directly with whether capital subsidy is a payment to meet any portion of the 'actual cost' for depreciation purposes, whereas Sahney addressed whether particular subsidies were taxable as revenue or capital receipts (a distinct issue), so P.J. Chemicals squarely applies to the present reference.
He relied on the principle (from Commissioner Of Income Tax v. Sun Engineering Works (P) Ltd.) that judgments must be read as a whole and in the context of the questions before the court; one must not extract sentences divorced from that context.

Assessee / Commissioner of Income-tax (Appeals)

The CIT(A) held that the Central subsidy received by the assessee should not be deducted from the cost of plant and machinery for determining 'actual cost' for depreciation, relying upon the Andhra Pradesh High Court decision in CIT v. Godavari Plywoods Ltd.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
CIT v. Godavari Plywoods Ltd., [1987] 168 ITR 632	Held that central subsidy granted on fixed capital investment should not be deducted from the cost of the asset for allowance of depreciation.	Relied upon by the Commissioner (Appeals) and cited approvingly by higher courts; the court noted this decision as part of the majority view supporting non-deductibility of such subsidies.
Commissioner Of Income-Tax v. Elys Plastics Pvt. Ltd., [1991] 188 ITR 11	Held that subsidies were not deductible in computing cost of plant and machinery for purposes of allowing depreciation; explained subsidies are incentives and need not be utilised towards cost of assets.	The Tribunal relied on this court's decision in Elys Plastics to dismiss the Revenue's appeal; the present court summarised and adopted this reasoning as consistent with P.J. Chemicals.
CIT v. Bhandari Capacitors Pvt. Ltd., [1987] 168 ITR 647	Cited as one of the High Court decisions upholding that central subsidy should not be deducted from actual cost for depreciation.	Noted by the court as part of the majority of High Courts whose reasoning P.J. Chemicals accepted.
CIT v. Premier Extraction (P.) Ltd., [1989] 175 ITR 22	Cited as another High Court decision supporting non-deductibility of such subsidies from actual cost.	Listed among the decisions followed by the Supreme Court in P.J. Chemicals as representing the majority view.
CIT v. Diamond Dies Mfg. Corporation Ltd., [1988] 172 ITR 655	Cited as a High Court decision (Karnataka) supporting the view that subsidy is not to be deducted from actual cost for depreciation.	Included among the majority High Court decisions accepted by the Supreme Court in P.J. Chemicals.
CIT v. Jindal Bros. Rice Mills, [1989] 179 ITR 470	Represents the Punjab and Haryana High Court's contrary view on deductibility of subsidy (i.e., a view divergent from the majority).	The court observed this decision took a contrary view; the Supreme Court in P.J. Chemicals did not accept the reasoning of Jindal Bros. and preferred the majority view.
Commissioner Of Income Tax, Hyderabad v. P.J. Chemicals Ltd., [1994] 210 ITR 830 (Supreme Court)	Directly addressed whether central subsidy could be deducted in computing actual cost for depreciation and held that such subsidy should not be deducted because it is an incentive, not a payment to meet actual cost.	The court held the present question was covered by P.J. Chemicals and accepted its reasoning: central subsidy of the nature concerned is not a payment directly or indirectly to meet any portion of 'actual cost'. The court applied P.J. Chemicals to answer the referred question in favour of the assessee.
Commissioner Of Income Tax v. Sun Engineering Works (P) Ltd., [1992] 198 ITR 297	Principle that a judgment must be read as a whole and in light of the questions before the court; one should not extract isolated observations divorced from context.	The court (and amicus) invoked this principle to caution against treating Sahney as conflicting with P.J. Chemicals; it supported the court's approach to reconcile the decisions by reference to the precise issues they decided.
Sahney Steel and Press Works Ltd. v. CIT, [1997] 228 ITR 253 (Supreme Court)	Addressed whether certain subsidies (refund of sales tax, relief of electricity/water charges) were taxable as revenue receipts or were capital receipts; held those particular subsidies could not be treated as aid to setting up the industry.	The court distinguished Sahney from P.J. Chemicals on the ground that Sahney considered taxability (revenue v. capital) and did not consider the question whether subsidy is deductible from 'actual cost' for depreciation. The court concluded Sahney did not create a conflict with P.J. Chemicals.
Seaham Harbour Dock Co.'s case, [1931] 16 TC 333 (HL)	Illustrative authority (cited in Sahney) for the proposition that monies received for the purpose of helping to set up or complete a project are for a capital purpose.	Quoted in the discussion of Sahney to demonstrate the legal test for characterising a subsidy as capital in the hands of the recipient; used as an explanatory example in the court's analysis of Sahney.

Court's Reasoning and Analysis

The court proceeded in the following analytical steps, based strictly on the materials and authorities discussed in the opinion:

The court noted the specific question referred under section 256(1) — whether the amount of Central subsidy must be reduced from the cost of assets for calculating depreciation — and observed that the Tribunal had referred the question because of divergent High Court authority (notably the Punjab & Haryana decision in Jindal Bros.).
On hearing the Revenue's counsel (Mr. R.V. Desai), the court recorded the Revenue's concession that the controversy appears covered by the Supreme Court decision in Commissioner Of Income Tax, Hyderabad v. P.J. Chemicals Ltd. (1994). The Revenue, however, sought to argue that P.J. Chemicals might be distinguishable or not to be followed in view of the later Sahney Steel decision (1997).
Because of this stance, the court requested and received assistance from Mr. G.S. Jetley as amicus curiae. Mr. Jetley argued there was no conflict between P.J. Chemicals and Sahney, explaining that the two Supreme Court decisions addressed different legal questions: P.J. Chemicals addressed deductibility from 'actual cost' for depreciation, while Sahney addressed the tax character (revenue v. capital) of particular subsidies.
The court applied the explanatory principle from Commissioner Of Income Tax v. Sun Engineering Works (1992) that judicial decisions must be read in light of the questions before the deciding court, and that isolated sentences should not be divorced from context. This principle guided the court in attempting to reconcile P.J. Chemicals and Sahney rather than treating them as conflicting.
The court reviewed P.J. Chemicals (1994), noting that the Supreme Court there had examined the character and nature of the subsidy and the divergence of High Court opinions. The Supreme Court in P.J. Chemicals concluded that central subsidies intended as incentives to encourage entrepreneurs to move to backward areas and establish industries are not payments "directly or indirectly" to meet any portion of the 'actual cost' of assets; thus they should not be deducted from actual cost for depreciation purposes.
The court distinguished Sahney (1997) from P.J. Chemicals on the ground that Sahney dealt solely with whether certain subsidies (refund of sales tax, relief of electricity/water charges, etc.) were taxable as revenue receipts or capital receipts — a question of taxable character — and did not address the question whether such subsidies should be excluded from 'actual cost' for depreciation calculation. Therefore, Sahney did not displace or conflict with P.J. Chemicals on the deductibility issue.
Having reconciled the authorities and accepted that the legal question in the present reference is covered by P.J. Chemicals, the court concluded that a Central subsidy of the nature in the present case is an incentive and not a payment to meet any portion of the 'actual cost' of the asset. Consequently, the subsidy cannot be deducted from the actual cost for purposes of computing depreciation.
The court also recorded its approval of the majority view of various High Courts (including the Andhra Pradesh and Bombay decisions cited) and expressly noted that it did not accept the contrary view of the Punjab and Haryana High Court in Jindal Bros.
The court acknowledged the valuable assistance of the amicus curiae in clarifying the distinct issues before the Supreme Court in the cited authorities.

Holding and Implications

Holding (core ruling): The Central subsidy received by the assessee is not a payment, directly or indirectly, to meet any portion of the "actual cost" of assets and therefore cannot be deducted from the "actual cost" for the purpose of allowing depreciation; the question referred is answered in the affirmative in favour of the assessee and against the Revenue.

Practical consequences and implications:

Direct effect on the parties: The Tribunal and the Commissioner of Income-tax (Appeals) were correct in holding that the Central subsidy received by the assessee should not be reduced from the cost of plant and machinery for computing depreciation; the Revenue's contention is rejected.
The court treated the Supreme Court decision in Commissioner Of Income Tax, Hyderabad v. P.J. Chemicals Ltd. (1994) as dispositive of the referred question and distinguished the later Sahney Steel (1997) decision as dealing with a different issue (taxability as revenue or capital receipt), so there was no conflict affecting the present ruling.
No additional remedy or costs were ordered: the reference is disposed of accordingly, with no order as to costs.
Broader precedent: The court adopted and followed the reasoning in P.J. Chemicals and the majority High Court decisions cited; the opinion does not purport to establish a novel principle beyond applying those authorities to the referred question.

Disposition: This reference is disposed of in accordance with the holding stated above, with no order as to costs.

Show all summary ...

Dr. B.P Saraf, C.J:— By this reference under section 256(1) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal has referred the following question of law to this court for opinion at the instance of the Revenue:

“Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in upholding the decision of the Commissioner of Income-tax (Appeals) that the amount of Central subsidy received by the assessee should not be-reduced from the cost of the assets for the purpose of allowing depreciation?”

2. The material facts of the case are as under:

The assessee is a registered firm. During the previous years relevant to the assessment years 1985–86 and 1986–87, the assessee received Central subsidy. The Assessing Officer reduced the cost of the plant and machinery for the purpose of determining the actual cost thereof for allowance of depreciation on the ground that the amount of subsidy would go to reduce the cost of plant and machinery in the hands of the assessee. The assessee appealed to the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) held that the Central subsidy received by the assessee need not be deducted from the cost of the plant and machinery for the purpose of determining actual cost for allowance of depreciation. To arrive at this conclusion, he relied, upon the decision of the Andhra Pradesh High Court in CIT v. Godavari Plywoods Ltd., [1987] 168 ITR 632. The Revenue appealed against the above order of the Commissioner of Income-tax (Appeals) to the Income-tax Appellate Tribunal (“the Tribunal”). The Tribunal, relying upon the decision of this court in Commissioner Of Income-Tax v. Elys Plastics Pvt. Ltd., [1991] 188 ITR 11, wherein following the decision of the Andhra Pradesh High Court in CIT v. Godavari Plywoods Limited, [1987] 168 ITR 632, the decisions of the Madhya Pradesh High Court in CIT v. Bhandari Capacitors Pvt. Ltd., [1987] 168 ITR 647 and CIT v. Premier Extraction (P.) Ltd., [1989] 175 ITR 22 and the decision of the Karnataka High Court in CIT v. Diamond Dies Mfg. Corporation Ltd., [1988] 172 ITR 655, this court had held that the subsidies granted on the fixed capital investment of the assessee were not deductible in computing the cost of plant and machinery for the allowance of depreciation, dismissed the appeal of the Revenue. The Revenue applied for reference under section 256(1) of the Act on the ground that there was divergence of opinion on this point and that the Punjab and Haryana High Court has taken a contrary view in CIT v. Jindal Bros. Rice Mills, [1989] 179 ITR 470. In view of the fact that the Punjab and Haryana High Court had taken a view contrary to that of the Andhra Pradesh and Bombay High Courts and the controversy in regard to the deductibility of the amount of subsidy from the cost of the asset was pending before the Supreme Court for decision, the Tribunal referred the question set out above to this court for opinion.

3. We have heard Mr. R.V Desai, learned counsel for the Revenue, who fairly stated that the controversy in this case is now covered by the recent decision of the Supreme Court in Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830. He, however, submitted that the said decision need not be followed in view of a later decision of the Supreme Court in Sahney Steel and Press Works Ltd. v. CIT, [1997] 228 ITR 253. In view of the above stance of Mr. Desai, learned counsel for the Revenue, we requested Mr. G.S Jetley, senior counsel, to assist the court as amicus curiae. Mr. Jetley accepted the request and addressed the court as amicus curiae. Mr. Jetley stated that there was no conflict between the decisions of the Supreme Court in Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830 and Sahney Steel and Press Works Ltd. v. CIT, [1997] 228 ITR 253. He stated that the points in issue in these two cases were completely different. Mr. Jetley submitted that the issue before the Supreme Court in Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830 was whether the capital subsidy received by the assessee was a payment, directly or indirectly, to meet any portion of the actual cost of the asset, whereas, the controversy in Sahney Steel and Press Works Ltd. v. CIT, [1997] 228 ITR 253 was whether the subsidy received by the assessee-com-pany from the Andhra Pradesh Government in that case was taxable as revenue receipt or not. Thus, the nature of controversy in both the cases, according to Mr. Jetley, was totally different. He, therefore, submitted that there is no conflict whatsoever between the two decisions of the Supreme Court and each deals with a different controversy. He, therefore, submitted that the decision of the Supreme Court in Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830 squarely applies to the present case. In support of this contention, reliance was placed by Mr. Jetley on the following passage from the decision of the Supreme Court in Commissioner Of Income Tax v. Sun Engineering Works (P) Ltd., [1992] 198 ITR 297 (page 320):

“The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this court. A decision of this court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this court, to support their reasonings.” We have carefully considered the rival submissions and perused the two decisions of the Supreme Court referred to above. In Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830 (SC), the controversy before the Supreme Court was whether the subsidy received by the assessee could be deducted in computing the actual cost for calculating depreciation. The Supreme Court took note of the sharp divergence of judicial opinion on this point. The High Courts of Andhra Pradesh, Bombay, Allahabad, Calcutta, Gau-hati, Gujarat, Karnataka, Kerala, Madras, Madhya Pradesh, Orissa and Rajasthan had taken a view upholding the assessee's claim and held that the Central subsidy should not be deducted from the actual cost of the asset for allowing depreciation. The only dissenting view was of the Punjab and Haryana High Court in CIT v. Jindal Bros. Rice Mills, [1989] 179 ITR 470. The apex court in Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830 (SC) had held that Central subsidy should not be deducted from the actual cost of the asset for the purpose of allowance of depreciation. While coming to this conclusion, it was observed (page 839):

“The question in the present context is not whether if a portion of the cost is met directly or indirectly by any other person or authority, it should be deducted or not. Quite obviously, the plain meaning of the section is that it shall be. But the real question is as to the character and nature of a subsidy whether it was really intended to subsidise the cost of the capital or was intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost which is the basis for determining the subsidy being only a measure adopted under the scheme to quantify the financial aid. The contention is that it is not a payment, directly or indirectly, to meet any portion of the ‘actual cost’ but intended as an incentive to entrepreneurs, its quantification determined at a percentage of the fixed capital cost.”

4. In Commissioner Of Income-Tax v. Elys Plastics Pvt. Ltd., [1991] 188 ITR 11, this court held that the subsidies were not deductible in computing the cost of plant and machinery for purposes of allowing depreciation. Speaking for the Bench, Mrs. Justice Sujata V. Manqhar J. (as she then was), observed (page 14):

“… In the first place, the subsidy is, in terms, for the purpose of encouraging industries being set up in certain selected backward districts or areas, or for the purpose of shifting industrial units to such backward districts or areas. It is true that the quantum of subsidy is calculated on the basis of the fixed capital investment of the company in land, building, plant and machinery. But this by itself does not lead to the conclusion that the subsidy is to meet the cost of land, building, plant or machinery. There is nothing in this scheme which requires the subsidy to be utilised towards meeting the cost of land, building, plant or machinery.”

5. It was further observed (Page 14):

“Under section 43(1) of the Income-tax Act, ‘actual cost’ means the actual cost of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority. The subsidy in question is not paid by the Central or State Government to meet the cost of any assets of the assessee. It is given as an incentive for setting up or shifting industrial units in a backward area. The subsidy goes to augment the capital resources of the industry in question.”

6. The decision of the Andhra Pradesh High Court in CIT v. Godavari Plywoods Ltd., [1987] 168 ITR 632 was referred to with approval in the above decision. The decision of the Punjab, and Haryana High Court in CIT v. Jin-dal Bros. Rice Mills, [1989] 179 ITR 470 did not find favour with this court. The Supreme Court in Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830 examined the character and nature of the subsidy to decide whether it was for the specific purpose of meeting a portion of the cost of the asset. It was observed (page 839):

7. The Supreme Court accepted the reasoning of the majority of the High Courts including the Andhra Pradesh High Court in CIT v. Godavari Plywoods Ltd., [1987] 168 ITR 632 and the Bombay High Court in Commissioner Of Income-Tax v. Elys Plastics Pvt. Ltd., [1991] 188 ITR 11 and did not approve the decision of the Punjab and Haryana High Court in CIT v. Jindal Bros. Rice Mills., [1989] 179 ITR 470. The Supreme Court held (page 841):

“The expression ‘actual cost’ needs to be interpreted liberally. The subsidy of the nature we are concerned with, does not partake of the incidents which attract the conditions for their deductibility from ‘actual cost’.”

8. It was observed (page 841):

“The Government subsidy, it is not unreasonable to say, is an incentive not for the specific purpose of meeting a portion of the cost of the assets, though quantified as or geared to a percentage of such cost. If that be so, it does not partake of the character of a payment intended either directly or indirectly to meet the ‘actual cost’. We should prefer the reasoning of the majority of the High Courts to the one found acceptable by the High Court of Punjab and Haryana.”

9. It is clear from the above decision of the Supreme Court that in the case of Government subsidy which is intended to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being only a measure adopted under the scheme to quantify the financial aid, is not a payment, directly or indirectly, to meet any portion of the “actual cost”.

10. The issue before the Supreme Court in Sahney Steel and Press Works Ltd. v. CIT, [1997] 228 ITR 253, on the other hand, was whether the subsidy received by the assessee-company from the Andhra Pradesh Government was taxable as revenue receipt or not. The question whether the amount of subsidy would be deductible from the cost of the asset for finding out the actual cost for the purpose of allowance of depreciation did not even arise for consideration before the Supreme Court in that case at any stage. The earlier decision in Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830 was not referred to because that was not relevant for deciding the point in issue in that case. The only issue in that case was whether the subsidy received in the hands of the recipient was a revenue receipt or a capital receipt. The incentives in that case were given by way of refund of sales tax and also by subsidy on power consumed for production to the extent stated in the notification. Exemption was given also from payment of water rate. Refund was also provided for water rate in respect of water drawn from Government sources. The contention of the assessee was that the subsidies received by it were of capital nature and hence not taxable under the Act. The case of the Revenue, on the other hand, was that the subsidy was of a revenue nature. The Supreme Court held (page 262):

“By no stretch of imagination can the subsidies whether by way of refund of sales tax or relief of electricity charges or water charges be treated as an aid to the setting up of the industry of the assessee.”

11. It was further held (page 262):

“If any subsidy is given, the character of the subsidy in the hands of the recipient—whether revenue or capital—will have to be determined by having regard to the purpose for which the subsidy is given. If it is given by way of assistance to the assessee in carrying on of his trade or business, it has to be treated as trading receipt. The source of the fund is quite immaterial.

For example, if the scheme was that the assessee will be given refund of sales tax on purchase of machinery as well as on raw materials to enable the assessee to acquire new plant and machinery for further expansion of its manufacturing capacity in a backward area, the entire subsidy must be held to be a capital receipt in the hands of the assessee. It will not be open to the Revenue to contend that the refund of sales tax paid on raw materials or finished products must be treated as revenue receipt in the hands of the assessee. In both the cases, the Government is paying out of public funds to the assessee for a definite purpose. If the purpose is to help the assessee to set up its business or complete a project as in Seaham Harbour Dock Co.'s case, [1931] 16 TC 333 (HL), the monies must be treated as having been received for a capital purpose. But if monies are given to the assessee for assisting him in carrying out the business operation and the money is given only after and conditional upon commencement of production, such subsidies must be treated as assistance for the purpose of the trade.”

12. It is clear from the above discussion that there is no conflict between the decisions of the Supreme Court in Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830 and Sahney Steel and Press Works Ltd. v. CIT, [1997] 228 ITR 253.

13. The controversy in both those cases was completely different. There is no dispute that the question referred in this case is covered by the decision of the Supreme Court in Commissioner Of Income Tax, Hyderabad v. P.J Chemicals Ltd.., [1994] 210 ITR 830.

14. For the reasons set out above, we hold that the Central subsidy received by the assessee is not a payment, directly or indirectly, to meet any portion of the “actual cost” but is intended as an incentive to the entrepreneurs. The fact that its quantification is determined as a percentage of the fixed capital cost does not change the nature and character of the subsidy. The amount of Central subsidy, therefore, cannot be deducted from the “actual cost”. Accordingly, we answer the question referred to us in the affirmative, i.e, in favour of the assessee and against the Revenue. Before parting with this case, we want to put on record our appreciation of the valuable assistance rendered to us in this case by Shri G.S Jetley, learned senior advocate, as amicus curiae.

15. This reference is disposed of accordingly with no order as to costs.