Basheshar Nath vs The Commissioner Of ...
on 19 November, 1958
Equivalent citations:
1959 AIR 149, 1959 SCR Supl. (1) 528
Income-tax-Evasion
of taxation-Case referred to Investigation Commission-Commencement of the Constitution-
Settlement of case --Constitutional validity of-Waiver of fundamental right, if
permissible-Taxation of Income (Investigation Commission) Act, 1947 (30 Of
1947), s. 8A- Constitution of
India,
Art. 14, Part III.
HEADNOTE:
The
two questions for determination in this appeal were, (1) whether a settlement
under s. 8A of the Taxation of Income (Investigation Commission) Act, 1947 (30
Of 1947) made after the commencement of the Constitution was constitutionally
valid and (2) whether the waiver of a fundamental right was permissible under
the Constitution. The appellant's case was on July 22, 1948, referred by the
Central Government under S. 5(1) of the Act to the Investigation Commission.
for investigation and report. The Commission directed the authorised official
under s. 6 of the Act to examine the appellant's accounts. He submitted his
final report by the end of 1953. The Commission considered the report heard the
assessee and came to the conclusion that Rs. 4,47,915 had escaped assessment.
Thereupon the appellant on May 20, 1954, applied to the Commission for a settlement
of his case under s. 8A of the Act, agreeing to pay Rs. 3,50,000 by way of tax
and penalty at the concessional rate. The Commission reported to the Central
Government approving of the settlement, the Central Government accepted it and
it was recorded by the Commission. The Central Government directed the recovery
of the said amount under s. 8A(2) of the Act. The appellant was permitted to
make payments by monthly instalments of Rs. 5,000 and the total amount thus
paid up to September 8, 1957, aggregated to Rs. 1,28,000. In the meantime the
Income Tax Officer issued a certificate and certain properties of the appellant
were attached. Relying on the decisions of this Court in Suraj Mall Mohta and
Co. v. A. V. Visvanatha Sastri,
[1955]
1 S.C.R. 448 and M. Ct. Muthiah v. The Commissioner of Income-tax, Madras,
[1955] 2 S.C.R. 1247,
the
appellant applied to the Commissioner of Income-tax challenging the validity of
the settlement made under s. 8A of the Act on the ground that S. 5(1) Of the
Act on which it was founded had been declared void by this Court, and claimed
that his properties might be released from attachment and the amount paid under
the settlement might be refunded to him., On January 29, 1958, the Commissioner
of Income Tax sent a reply to the appellant maintaining that the settlement was
valid and 529 that the appellant was bound thereunder to pay up the arrears of
instalments and requesting him to continue to pay in future. Against this
decision of the Commissioner of Income Tax the. appellant came up to the Supreme
Court by special leave. It was contended on behalf of the respondent that the
Act laid down two distinct and separate procedures, one for investigation and
the other for settlement and it was the former alone and not the D, latter that
was affected by the decisions of this Court. and that the appellant by
voluntarily entering into the settlement had waived his fundamental right
founded on Art. 14 of the Constitution.
Held
(Per Curiam), that both the contentions must fail. It was not correct to say
that the Taxation of Income (In- vestigation Commission) Act, 1947, laid down
two different procedures, one for investigation and assessment under s. 8(2) of
the Act and another for settlement under s. 8A of the Act and assessment in
terms of such settlement and that while the decision of this Court in M. Ct.
Muthiah v. The Commissioner of Incometax, Madras, declaring s. 5(1) of the Act
to be discriminatory and therefore void, affected only the former procedure and
not the latter. The Act laid down but one procedure and in entertaining a
proposal for settlement as in the investigation itself the Commission exercised
the same jurisdiction, and powers and followed the one and the same procedure
as laid down by ss. 5, 6 and 7 Of the Act. Since the settlement in the instant
case was no exception to that rule, it was covered by the decision and must be
held to be violative of Art. 14 Of the Constitution. M. Ct. Muthiah v. The
Commissioner of Income-tax, Madras, [1955] 2 S.C.R.
1247,
applied. The observations made in the majority judgment of this Court in Syed
Qasim Razvi v. The State of Hyderabad,
[1953] S.C.R. 589, must be kept strictly confined to the special facts of that
case and had no application to the facts of the present case. Syed Qasim Razvi
v. The State of Hyderabad, [1953] S.C.R. 589, held inapplicable.
Per
Das, C. J., and Kapur J.-There could be no waiver of the fundamental right
founded on Art. 14 Of the Constitution and it was not correct to contend that
the appellant had by entering into the settlement under s. 8A of the Act,
waived his fundamental right under that Article. Article 14 was founded on a
sound public policy recognised and valued all over the civilised world, its
language was the language of command and it imposed an obligation on the State
of which no person could, by his act or conduct, relieve it. As it was not strictly
necessary for the disposal of this case, the question whether any other
fundamental right could be waived need not be considered in this connection.
Laxamanappa Hanumantappa jamkhandi v. The Union of India, [1955] 1 S.C.R. 769;
Dewan-Bahadur Seth Gopal Das Moht 67 530 v. The Union of India, [1955] 1
S.C.R.773; Baburao Narayanrao Sanas v. The Union Of India, [1954] 26 I.T.R.
725; Subedar v. State, A.I.R. 1957 All. 396 and Pakhar Singh v. The State,
A.I.R. 1958 Punj. 294, distinguished and held inapplicable.
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