TMI Blog1956 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... other bidi merchants who are similarly situate, equality before the law or the equal protection of the laws and the petitioner can legitimately complain of an infraction of his fundamental right under article 14 of the Constitution. In the view we have taken on the construction of sub-section (7A) of section 5 and the petitioner's rights under article 14, it is not necessary for us, on this occasion, to express any opinion on the contention that the inconvenience and harassment referred to above constitute an imposition of such an interference as amounts to an unwarranted restriction on the petitioner's rights under article 19(1)(g) or a violation of his rights under article 31. Appeal allowed. - Petition No. 271 of 1955 - - - Dated:- 20-3-1956 - Judge(s) : BHAGWATI., DAS., JAGANNADHADAS., SINHA., VIVIAN BOSE JUDGMENT The Judgment of DAS, C.J., and BHAGWATI, JAGANNADHADAS and SINHA, JJ. was delivered by DAS, C. J. DAS, C.J.---This is an application under article 32 of the Constitution praying for an appropriate writ and order restraining the Income-tax Officer, Special Circle, Ranchi, (respondent No. 3), from taking up and proceeding with the assessment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alcutta, from the Income-tax Officer, District III(1), Calcutta, to the Income-tax Officer, Special Circle, Ranchi. Sd. (K.B. Deb), Under-Secretary, Central Board of Revenue. It is alleged and not denied by the respondent that the petitioner had no previous notice of the intention of the Income-tax authorities to transfer the assessment proceedings from Calcutta to Ranchi nor had it any opportunity to make any representation against such decision. Thereafter on the 2nd May, 1955, the Income-tax Officer, Special Circle, Ranchi, called upon the petitioner to submit its return for the assessment year 1955-56. It is then that the present petition was filed under article 32 of the Constitution challenging the validity of the order of transfer dated the 13th December, 1954, and the law under which such order was purported to have been made. The contention is that sub-section (7-A) of section 5 of the Indian Income-tax Act, 1922, and the said order of transfer made thereunder are unconstitutional in that they infringe the fundamental rights guaranteed to the petitioner by articles 14, 19(1)(g) and 31 of the Constitution. Article 14 of the Constitution enjoins that the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that area in which that place is situate or where the business, profession, or vocation is carried on at more than one place by the Income-tax Officer of the area in which the principal place of business, profession or vocation is situate. In all other cases, according to sub-section (2), an assessee shall be assessed by the Income-tax Officer of the area in which he resides. If any question arises as to the place of assessment such question shall be decided, after giving the assessee an opportunity to represent his views by the Commissioner or Commissioners concerned or in case of disagreement between them by the Board of Revenue: [sub-section (3)]. It is quite clear from the aforesaid provisions of section 64 that the Legislature considered the question of the place of assessment to be of some importance to the assessee. The provisions of section 64 of the Indian Income-tax Act, 1922, came up for discussion before the Bombay High Court in Dayaldas Kushiram v. Commissioner of Income-tax, Central. At pages 146 to 147 Beaumont, C.J., observed as follows : " In my opinion, section 64 was intended to ensure that as far as practicable an assessee should be assessed locally, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made under sub-section (7A) of section 5. In order, however, to deprive a particular assessee of the benefits of sub-sections (1) and (2) of section 64, there must be a valid order under section 5(7A) and he will lose the benefit only to the extent to which that right is taken away by a valid order made under sub-section (7A) of section 5. This takes us to the new sub-section (7A) of section 5. Sub-section (7A) of section 5 runs as follows : " (7A) The Commissioner of Income-tax may transfer any case from one Income-tax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income-tax Officer to another. Such transfer may be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Income-tax Officer from whom the case is transferred. " The sub-section in terms makes provisions for the transfer of a "case." Under the Indian Income-tax Act, 1922, a case is started when the Income-tax Officer issues a notice under section 22(2) of the Act calling upon the assessee to file his return of his total income and total world income during the previous year and then the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider it necessary, for the purpose of this case, to pause to consider whether the constitutionality of sub-section (7A) of section 5 can be supported on the principle of any reasonable classification laid down by this Court or whether the Act lays down any principle for guiding or regulating the exercise of discretion by the Commissioner or Board of Revenue or whether the sub-section confers an unguided and arbitrary power on those authorities to pick and choose an individual assessee and place that assessee at a disadvantage in comparison with other assessees. It is enough for the purpose of this case to say that the omnibus order made in this case is not contemplated or sanctioned by sub-section (7A) and that, therefore, the petitioner is still entitled to the benefit of the provisions of sub-sections (1) and (2) of section 64. All assessees are entitled to the benefit of those provisions except where a particular case or cases of a particular assessee for a particular year or years is or are transferred under sub-section (7A) of section 5, assuming that section to be valid and if a particular case or cases is or are transferred his right under section 64 still remains as re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The order of transfer is certainly calculated to inflict considerable inconvenience and harassment to the petitioner as hereinbefore mentioned. But in the view we have taken on the construction of sub-section (7A) of section 5 and the petitioner's rights under article 14, it is not necessary for us, on this occasion, to express any opinion on the contention that the inconvenience and harassment referred to above constitute an imposition of such an interference as amounts to an unwarranted restriction on the petitioner's rights under article 19(1)(g) or a violation of his rights under article 31. For the reasons stated above this petition must be allowed. Accordingly the impugned order is set aside and an injunction is issued in terms of prayer (c) of the petition. The petitioner is entitled to the costs of this application. BOSE, J.---I agree with my Lord the Chief Justice that this petition should be allowed but for different reasons. In my opinion, sections 5(7A) and 64(5)(b) of the Indian Income-tax Act are themselves ultra vires article 14 of the Constitution and not merely the order of the Central Board of Revenue. The only question is whether these sections contrav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to which the classification is made; and classification made without any reasonable basis should be regarded as invalid. " In another case, Ram Prasad Narayan Sahi and Another v. The State of Bihar and Others, the same learned Judge said at page 1139 : " but such selection or differentiation must not be arbitrary and should rest upon a rational basis, having regard to the object which the legislature has in view. " Ivor Jennings puts it another way : " Among equals the law shall be equal and shall be equally administered and that like shall be treated alike. " With the utmost respect all this seems to me to break down on a precise analysis, for even among equals a large discretion is left to judges in the matter of punishment, and to the police and to the State whether to prosecute or not and to a host of officials whether to grant or withhold a permit or a licence. In the end, having talked learnedly round and around the article we are no wiser than when we started and in the end come back to its simple phrasing : " The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. " The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the object sought to be achieved and yet which are bad because despite all that the object itself cannot be allowed on the ground that it offends article 14. In such a case, the object itself must be struck down and not the mere classification which, after all, is only a means of attaining the end desired; and that, in my judgment, is precisely the point here. It is the very point that Fazl Ali, J., made in Anwar Ali Sarkar's case at pages 309-310 : " It was suggested that the reply to this query is that the Act itself being general and applicable to all persons and to all offences, cannot be said to discriminate in favour of or against any particular case or classes of persons or cases, and if any charge of discrimination can be levelled at all, it can be levelled only against the act of the executive authority if the Act is misused. This kind of argument however does not appear to me to solve the difficulty. The result of accepting it would be that even where discrimination is quite evident one cannot challenge the Act simply because it is couched in general terms; and one cannot also challenge the act of the executive authority whose duty it is to administer the Act, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion feel that that has led, or is likely to lead, to hardship and injustice or to a miscarriage of justice; and in the case of this Court a right to transfer is conferred under section 527 only when that is "expedient in the interests of justice." Section 24 of the Civil Procedure Code is wider but that was a law made before the Constitution and, in any case, such an order would be open to review by this Court and in a suitable case, should the High Court act arbitrarily or along non-judicial lines, such as directing a transfer without recording reasons and without hearing the parties concerned when it is possible to afford them a hearing, the matter would be set right here. There is a big difference between investing a judicial authority with such powers and other non-judicial bodies because judges must act in accordance with a recognised procedure and obey the laws of natural justice unless there is express indication to the contrary in the statute. What is the position here? There is no hearing, no reasons are recorded: just peremptory orders transferring the case from one place to another without any warning; and the power given by the Act is to transfer from one end of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d passed an Act in the bald terms of the order made here transferring the case of this petitioner, picked out from others in a like situation, from one State to another, or from one end of India to the other, without specifying any object and without giving any reason, it would, in my judgment, have been bad. I am unable to see how the position is bettered because the Central Board of Revenue has done this and not Parliament. I quote Mukherjea, J. (as he then was), in a case which is not in point here but in a passage whose language seems apt to the present position. The quotation is from Ram Prasad Narayan Sahi v. The State of Bihar : " It is impossible to conceive of a worse form of discrimination than the one which differentiates a particular individual from all his fellow subjects and visits him with a disability which is not imposed upon anybody else and against which even the right of complaint is taken away. " And again, " It is true that the presumption is in favour of the constitutionality of a legislative enactment and it has to be presumed that a Legislature understands and correctly appreciates the needs of its own people. But when on the face of a statute t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be given the right to determine these matters to their subjective satisfaction, there would be no point in these fundamental rights, for the Courts would then be powerless to interfere and determine whether those rights have been infringed. The whole point of the chapter is to place a limitation on the powers of all these bodies, including Parliament, save in its constituent capacity. Therefore, no power resting on the subjective satisfaction of any of these bodies can ever be conferred; the satisfaction must always be objective in the sense in which Lord Atkin explained so that its exercise is open to judicial review In my opinion, the power of transfer can only be conferred if it is hedged round with reasonable restrictions, the absence or existence of which can in the last instance be determined by the Courts ; and the exercise of the power must be in conformity with the rules of natural justice, that is to say, the parties affected must be heard when that is reasonably possible, and the reasons for the order must be reduced, however briefly, to writing so that men may know that the powers conferred on these quasi judicial bodies are being justly and properly exercised. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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