TMI Blog1953 (9) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act XIV of 1124), and the first notice issued to the petitioner dated 10th December, 1949, (Exhibit A) reads as follows:- NOTICE. Whereas the Income-tax Investigation Commission having been informed that a substantial portion of your income for 1942 and 1943 has escaped assessment, has ordered investigation into the matter, you are hereby required to produce the following on or before 21st December, 1949, before the Commission. (1) The account books (day books and ledgers) for the years 1942 and 1943. (2) Kurippu books, invoices, vouchers, bills of lading and customs duty receipts for 1942 and 1943. (3) Bank pass books showing dealings with banks for 1942 and 1943. (4) Stock books for the years 1942 and 1943. (5) Statement of properties purchased by you either in your name or in the names of your relatives or dependents during 1942 and 1943 showing such particulars as acreage, price paid, annual yield, Sirkar tax etc. (6) Statement of house properties constructed or purchased in 1942 and 1943 showing the cost thereof and municipal valuation. 3. On 21st November, 1951, the first respondent forwarded to the petitioner for information a copy of the notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Investigation Commission has no power to conduct an investigation regarding his income in respect of any year whatsoever; and (b) that at any rate the said Commission cannot go beyond the two years, 1942 and 1943, covered by the Evasion Cases Nos. 1 and 2 of 1125. 5. Before dealing with those contentions, however, we would like to dispose of a preliminary objection raised by the learned Advocate-General that this Court is not competent to entertain the petition in view of the fact that the second respondent is not amenable to its jurisdiction. Under Article 226(1) of the Constitution the power of a High Court to issue directions, orders or writs is confined to the territories in relation to which it exercises jurisdiction and to persons or authorities, including in appropriate cases any Government, within those territories and the contention was that as the second respondent functions outside the State of Travancore-Cochin and the first respondent is a mere subordinate of the second, it is beyond our competence to grant the prayer embodied in the petition. 6. This argument was sought to be supported by a recent decision of the Supreme Court of India in Electio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction of a statutory provision similar in scope, purpose or wording of Article 226 of the Constitution and is not of much assistance in the construction of that article. (c) It was said that it could not have been contemplated that an inhabitant of the State of Madras, feeling aggrieved by a threatened interference with the exercise of his rights in that State by an authority located in Delhi and acting without jurisdiction, should seek his remedy under Article 226 in the Punjab High Court. It is a sufficient answer to this argument of inconvenience to say that, the language of the article being reasonably plain, it is idle to speculate as to what was or was not contemplated. (d) Our attention has been called to certain decisions of High Courts dealing with the situation where the authority claiming to exercise jurisdiction over a matter at first instance is located in one State and the appellate authority is located in another State. It is not necessary for the purposes of this appeal to decide which High Court would have jurisdiction in such circumstances to issue prerogative writs under Article 226. 8. In a recent English case, Regina v. Industrial Disputes Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hape its proceedings in accordance with the directions of this Honourable Court (paragraph 15). 12. When we were discussing the draft of the order to be pronounced it struck us that there was an aspect of the case which had not been dealt with at the Bar and on which we should hear counsel before we disposed of this petition. The following extract from our order dated the 22nd May, 1953, summarises the questions involved:- The proceedings of the Income-tax Investigation Commission are based on the Travancore Taxation on Income (Investigation Commission) Act, 1124 (Travancore Act XIV of 1124), and the following legislative sequence will underline the importance of its validity for a proper adjudication of the contentions urged before us: (1) 26th July, 1949. Notification issued by the Government of Travancore-Cochin bringing into force the Travancore Taxation on Income (Investigation Commission) Act, 1124 (Travancore Act XIV of 1124) with effect from 22nd July, 1949, under Section 1(3) of that enactment as continued in force by the Travancore-Cochin Administration and Application of Laws Ordinance, 1124 (Travancore Ordinance 1 of 1124). (2) 26th January, 1950. The Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to Section 3(1) of the United State of Travancore and Cochin Administration and Application of Laws Ordinance, 1124 (1 of 1124) what are continued in force are 'the existing laws of Travancore'. 'Subject to the provisions of this Ordinance, the existing laws of Travancore shall, until altered, amended or repealed by competent authority, continue to be in force mutatis mutand is in that portion of the territories of the United State which before the appointed day formed the territory of the State of Travancore.' The preamble to the Ordinance also emphasises that what are continued in force are the laws which were in force in Travancore immediately prior to the appointed day, namely, the 1st of July, 1949: 'WHEREAS, for the peace and good government of the United State of Travancore and Cochin, it is necessary to make provisions for the continuance, in that portion of the territory of the United State, which, before the 1st day of July, 1949 (hereinafter in this Ordinance referred to as the appointed day ) formed the State of Travancore the laws which were in force in that State immediately prior to the appointed day;.........................' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive. 13. We have since heard the learned Advocate-General, and Mr. M.K. Nambiar on behalf of the petitioner, and have come to the conclusion that sub-section (3) of section 1 of the Travancore Taxation on Income (Investigation Commission) Act, 1124, came into force immediately on the passing of the Act under Section 22 of Act VI of 1123 by His Highness the Maharaja of Travancore on the 24th Kumbhom, 1124 (7th March, 1949), and that the operation of the other sections of the Act alone was postponed to such date as the Government may by notification in the Government Gazette appoint. According to us what sub-section (3) of Section 1 really means is that that sub-section shall come into force immediately and the remaining provisions of the Act on such date as the Government may by notification in the Government Gazette appoint. The rules of statutory interpretation, the long legislative practice of the State and the resultant absurdity of another inference, all alike compel such a conclusion, and if the conclusion is right, sub-section (3) of Section 1 will be an existing law coming within the definition of that term in Section 2(b) of the United State of Travancore and Cochin A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (b) in the disposal of cases transferred to the Central Commission under clause (a) it shall have and exercise the same powers as it has and exercises in the investigation of cases referred to it under the Taxation on Income (Investigation Commission) Act, 1947 (XXX of 1947), and shall be entitled to act for the same term as under sub-section (3) of Section 4 of that Act: (bb) any decision given, whether before or after the commencement of this Act, by the Chief Revenue Authority of Travancore or of Travancore-Cochin in the exercise or purported exercise of any powers conferred on it by any law for the time being in force in the State shall be deemed to be a decision given by the Income-tax Authority for the purposes of sub-section (2) of Section 8 of the Travancore Taxation on Income (Investigation Commission) Act, 1124 (Travancore Act XIV of 1124): (c) any reference in the State law, by whatever form of words, to the State Government, or the State Commission shall, in relation to income other than agricultural income, be construed as a reference to the Central Government of the Central Commission, as the case may be; (d) the report of the Central Commission shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cases Nos. 1 and 2 of 1125 can be enlarged or whether the Central Commission should be confined solely to 1942 and 1943. Under that section any reference by the Government had to be made before the last day of Makarom, 1125 (11th February, 1950), and no reference was possible after that date. The only reference in this case prior to the last day of Makarom, 1125 (11th February, 1950), was the reference of Evasion Cases Nos. 1 and 2 of 1125. It follows that the Income-tax Commission has no jurisdiction to go beyond the years covered by those cases and that any attempt to enlarge the scope of the enquiry is without legislative warrant. It has hence to be prohibited as prayed for in the petition and a writ to that effect will issue as far as the first respondent is concerned. 19. That the above is the correct position will be clear from a bare reading of Section 5:- (1) Our Government may at any time before the last day of Makarom, 1125, refer to the Commission for investigation and report any case or points in a case in which Our Government have prima facie reasons for believing that a person has to a substantial extent evaded payment of taxation on income, together with such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possible under sub-section (4) of Section 5 of Act XIV of 1124 untrammelled by any observation of ours and as it is unnecessary for us to decide that point for dealing with this petition, we see no reason why we should not accede to his request. We would also leave open the argument of Mr. Nambiar that the Income-tax authority referred to in Section 8(2) of the Travancore Taxation on Income (Investigation Commission) Act, 1124 (Travancore Act XIV of 1124), will not take in the Chief Revenue Authority of Travancore who dealt with the assessment of the petitioner and that sub-section (bb) of Section 3 of the Opium and Revenue Laws (Extension of Application) Act, 1950 (Central Act XXXIII of 1950), introduced by the Opium and Revenue Laws (Extension of application) Amendment Act, 1951 (Central Act XLIV of 1951), will be of no avail for the purpose as the amendment will have only prospective operation in spite of the provision in the Amending Act that sub-section (bb) shall be deemed always to have been substituted. 21. In the result we allow the petition to the extent indicated in paragraph 18 above and direct that in the circumstances of the case the parties shall bear their r ..... 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