1968 (12) TMI 1 - SC - Income Tax

Sec. 277 of the IT Act is not violative of either art. 14 or art. 20(2) of the Constitution - there is repugnancy/inconsistency and the two enactments i.e. IPC and General Clauses Act can not stand together - Assessee appeal dismissed

Summary

Issues Involved:
1. Whether the appellant can be prosecuted under both Section 52 of the Income-tax Act, 1922, and Section 177 of the Indian Penal Code.
2. Whether the repeal of the 1922 Act by the 1961 Act affects the prosecution of the appellant for offences committed under the 1922 Act.
3. Whether the appellant can be prosecuted under both Section 177 of the Indian Penal Code and Section 52 of the 1922 Act simultaneously.
4. Whether the complaint petition must be filed by the Inspecting Assistant Commissioner.
5. Whether the choice of prosecution under either Section 177 of the Indian Penal Code or Section 52 of the 1922 Act violates Article 14 of the Constitution.
6. Whether penalties already imposed under Section 28 of the 1922 Act bar prosecution under Section 52 of the 1922 Act.

Issue-wise Detailed Analysis:

1. Prosecution under Both Section 52 of the 1922 Act and Section 177 of the IPC:
The appellant contended that Section 52 of the 1922 Act is a special provision, and thus, prosecution should only be under this section and not under Section 177 of the IPC, which is a general provision. The court rejected this argument, stating that there is no repugnancy or inconsistency between the two statutes. The provisions of Section 52 of the 1922 Act do not alter the nature or quality of the offence under Section 177 of the IPC but merely provide a new course of procedure. The court concluded that the two enactments can stand together and must be treated as cumulative in effect.

2. Effect of Repeal of the 1922 Act by the 1961 Act:
The appellant argued that the repeal of the 1922 Act by the 1961 Act did not save prosecutions for offences committed under the 1922 Act. The court referred to Section 6 of the General Clauses Act, which states that the repeal of an enactment does not affect any investigation, legal proceeding, or remedy in respect of any right, privilege, obligation, or liability acquired under the repealed enactment. The court concluded that the provisions of Section 6 of the General Clauses Act apply, and legal proceedings for offences committed under the 1922 Act may be instituted even after its repeal.

3. Simultaneous Prosecution under Section 177 of the IPC and Section 52 of the 1922 Act:
The appellant argued that under Section 26 of the General Clauses Act, he could be prosecuted either under Section 52 of the 1922 Act or Section 177 of the IPC, but not both. The court clarified that Section 26 does not bar the trial or conviction under both enactments but only bars double punishment for the same offence. Therefore, the appellant can be prosecuted under both sections but cannot be punished twice for the same offence.

4. Filing of Complaint Petition by the Inspecting Assistant Commissioner:
The appellant contended that the prosecution was illegal as the complaint petition was not filed by the Inspecting Assistant Commissioner. The court held that Section 53 of the 1922 Act requires prosecution to be at the instance of the Inspecting Assistant Commissioner, meaning on his authority. It is sufficient if the complaint petition is filed by the respondent on being authorized by the Inspecting Assistant Commissioner.

5. Violation of Article 14 of the Constitution:
The appellant argued that the choice of prosecution under either Section 177 of the IPC or Section 52 of the 1922 Act was left to the arbitrary discretion of the Income-tax Officer, violating Article 14 of the Constitution. The court found no substance in this argument, noting that the offence under Section 52 of the 1922 Act requires the sanction of the Inspecting Assistant Commissioner and that no prosecution can occur if a penalty has been imposed under Section 28 of the 1922 Act. These safeguards ensure no violation of Article 14.

6. Penalties Already Imposed under Section 28 of the 1922 Act:
The appellant argued that penalties had already been imposed for the first three assessment years, barring prosecution under Section 52 of the 1922 Act. The court acknowledged this point but noted insufficient material to determine it. The court left the point open for the appellant to argue before the trying Magistrate at the trial's commencement.

Conclusion:
The appeals were dismissed, with the court affirming that the appellant could be prosecuted under both Section 52 of the 1922 Act and Section 177 of the IPC, that the repeal of the 1922 Act did not affect pending prosecutions, and that the appellant could be prosecuted under both enactments but not punished twice for the same offence. The court also held that the complaint petition need not be filed by the Inspecting Assistant Commissioner himself and found no violation of Article 14. The issue of penalties already imposed was left open for determination by the trial court.