1987 (4) TMI 17 - HC - Income Tax

Issues Involved:
1. Validity of the amnesty scheme under section 119(2) of the Income-tax Act, 1961.
2. Immunity or amnesty allegedly granted to respondent No. 3 under the amnesty scheme.
3. Appointment of respondent No. 3 as the Sheriff of Bombay.

Detailed Analysis:

Issue 1: Validity of the Amnesty Scheme under Section 119(2) of the Income-tax Act, 1961
The petitioner challenged the amnesty scheme, claiming it exceeded the powers of the Central Board of Direct Taxes (CBDT) under section 119(2) of the Income-tax Act, 1961. The petitioner argued that previous schemes like the Voluntary Disclosure Scheme and the Special Bearer Bonds Scheme were directly under Parliament's control, whereas the current scheme was not. The court noted the arguments from both sides: the petitioner emphasized the ethical and legal overreach, while the respondent highlighted the scheme's public announcement and parliamentary discussions. The court found merit in the petitioner's arguments, stating that the legality and ethical basis of the scheme required fuller consideration. Consequently, the court issued a rule restricted to prayer (a) of the writ petition but did not stay the operation of any circulars related to the scheme.

Issue 2: Immunity or Amnesty Allegedly Granted to Respondent No. 3
The court observed that the proposals for settlement or grant of amnesty to respondent No. 3 were still pending consideration, with no final decision made. Given this categorical statement from the Union of India, the court decided not to delve further into this aspect.

Issue 3: Appointment of Respondent No. 3 as the Sheriff of Bombay
The petitioner challenged the appointment of respondent No. 3 as the Sheriff of Bombay, claiming it should be quashed by a writ of quo warranto or mandamus. The court noted that a similar challenge had been dismissed in a previous writ petition (Writ Petition No. 325 of 1987) on grounds of constructive res judicata. However, the court disagreed with the earlier judgment, stating that the allegations against respondent No. 3 were serious and not disproven. Despite this, the court concluded that the appointment did not warrant judicial intervention. The appointment was an executive decision by the Council of Ministers, responsible to the State Legislature and ultimately to the voters. The court emphasized that issues of propriety rather than legality should be addressed by the Legislature, not the judiciary. Consequently, the court sustained the non-issue of the rule regarding the appointment.

Conclusion:
The appeal was partly allowed. The court sustained the rejection of the writ petition concerning the immunity or amnesty granted to respondent No. 3 and the appointment of respondent No. 3 as the Sheriff of Bombay. However, the court issued a rule restricted to the challenge against the amnesty scheme, requiring further consideration of its legality and ethical basis. The parties were directed to bear their own costs of the appeal.

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