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TMI Blog1956 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... the firm are citizens of India. It is said that since its inception the firm has all along been assessed to income-tax by the Income-tax Officer, District III, Calcutta. Thus assessments for the years 1948-49 and 1949-50 were made by the Income-tax Officer, District III, Calcutta. Notices under section 22(2) of the Income-tax Act were issued to the petitioner on different dates by the Income-tax Officer, District III, Calcutta, calling upon the petitioner to submit returns for the assessment years 1950-51, 1951-52, 1952-53, 1953-54 and 1954-55, the notice for the last mentioned year being dated 23rd August, 1954. In compliance with these notices the petitioner duly submitted its returns for those respective years to the Income-tax Officer, District III, Calcutta. In the course of assessment proceedings for the year 1950-51 a question was raised regarding the location of the principal place of business of the petitioner. Eventually the Income-tax authorities seem to have been satisfied that it was in Calcutta and on 18th December, 1954, the Income-tax Officer, District III, Calcutta, made assessment for the year 1950-51. On the 25th January, 1955, the petitioner received a letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14, in so far as it protects all persons against discriminatory and hostile legislation, have been discussed and explained by this Court in a series of cases beginning with Chiranjit Lal Chowdhury v. The Union of India and ending with Budhan Chowdhry and Others v. The State of Bihar. In the last mentioned case a Full Bench of this Court summarised the result of the earlier decisions on this point in the words following : " It is now well-established that while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (2) that that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases; namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer of the area in which the applicant's place of business is situate, and as there is such an officer in existence, namely, the Officer of Ward C, Section II, in my opinion, it is only the latter officer who can assess the assessee. " Kania, J. (as he then was), said at page 149 : " A plain reading of the section shows that the same is imperative in terms. It also gives to the assessee a valuable right. He is entitled to tell the taxing authorities that he shall not be called upon to attend at different places and thus upset his business. " It will be noticed from the above passages that the learned Judges treated the provisions of section 64 more as a question of right than as a matter of convenience only. It was for the above decision that the Indian Income-tax Act, 1922, was amended by the Indian Income-tax (Amendment) Act, 1940 (XL of 1940), by adding to clause (b) of sub-section (5) of section 64 the words " in consequence of any transfer made under sub-section (7A) of section 5 " and by adding sub-section (7A) to section 5. The relevant portion of sub-section (5) of section 64 so amended reads as under :--- " (5) The provisions of sub-section (1) and sub-section (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such transfer shall not render necessary the reissue of notice already issued by the Income-tax Officer from whom the case is transferred quite clearly indicates that the transfer contemplated by the sub-section is the transfer of a particular case actually pending before an Income-tax Officer of one place to the Income-tax Officer of another place. The fact that in this case the Income-tax Officer, Special Circle, Ranchi, issued fresh notice under section 22(2) quite clearly shows that he did not understand that any particular pending case of this assessee had been transferred to him. Evidently he thought that the assessment of the petitioner's income, generally and as a whole, had been transferred to him and that it was, therefore, for him to initiate a case, i.e., assessment proceedings for a particular year. In our judgment such an omnibus wholesale order of transfer is not contemplated by the sub-section. It is implicit in the sub-section that the Commissioner of Income-tax or the Central Board of Revenue, as the case may be, should before making an order of transfer of any case apply his or its mind to the necessity or desirability of the transfer of that particular case. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness in Calcutta, to have his assessment proceedings before the Income-tax Officer of the area in which his place of business is situate. The Income-tax authorities have by an executive order, unsupported by law, picked out this petitioner and transferred all his cases by an omnibus order unlimited in point of time. This order is calculated to inflict considerable inconvenience and harassment on the petitioner. Its books of account will have to be produced before the Income-tax Officer, Special Circle, Ranchi---a place hundreds of miles from Calcutta, which is its place of business. Its partners or principal officers will have to be away from the head office for a considerable period neglecting the main business of the firm. There may be no suitable place where they can put up during that period. There will certainly be extra expenditure to be incurred by it by way of railway fare, freight and hotel expenses. Therefore the reality of the discrimination cannot be gainsaid. In the circumstances this substantial discrimination has been inflicted on the petitioner by an executive fiat which is not founded on any law and no question of reasonable classification for purposes of legisla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g more than dividing off one group of things from another; and unless some difference or distinction is made in a given case no question under article 14 can arise. It is just a question of framing a set of rules. It is elementary that no two things are exactly alike and it is equally obvious many things have features that are common. Once the lines of demarcation are fixed, the resultant grouping is capable of objective determination but the fixing of the lines is necessarily arbitrary and to say that governments and legislatures may classify is to invest them with a naked and arbitrary power to discriminate as they please. Faced with the inexorable logic of this position, the learned Judges who apply this test are forced to hedge it round with conditions which, to my mind, add nothing to the clarity of the law. I will pass over the limitations with which the classification test is now judicially surrounded, namely that it must be "reasonable", it must not be "discriminatory" or "arbitrary", it must not be "hostile"; there must be no "substantial, discrimination" and so forth, and will proceed at once to a rule that is supposed to set the matter at rest. The rule is taken from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because of that decisions on the same point will vary as conditions vary, one conclusion in one part of the country and another somewhere else; one decision today and another tomorrow when the basis of society has altered and the structure of current social thinking is different. It is not the law that alters but the changing conditions of the times and article 14 narrows down to a question of fact which must be determined by the highest Judges in the land as each case arises. [See on this point Lord Sumner's line of reasoning in Bowman's case]. Always there is in these cases a clash of conflicting claims and it is the core of the judicial process to arrive at an accommodation between them. Anybody can decide a question if only a single principle is in issue. The heart of the difficulty is that there is hardly any question that comes before the Courts that does not entail more than one so-called principle. As Judge Leonard Hand of the United States Court of Appeals said of the American Constitution : " The words a judge must construe are empty vessels into which he can pour anything he will. " These rules are useful guides in some cases but they do not, in my opinion, go to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power as here, That was what happened in the Coal Control case; the order itself was struck down and not the executive action taken by virtue of the unrestricted powers conferred by that law. See page 813 where it was said: " The order commits to the unrestrained will of a single individual the power to grant, withhold or cancel licences in any way he chooses and there is nothing in the order which would ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. " So also in State of Madras v. V. G. Row. It is true that these were cases under article 19 and not 14 of the Constitution but the principle is the same. I need not multiply instances. What is the position here? Here is an Act that fixes a certain venue for assessment in section 64. That is the normal law of the land for these purposes. The language in sub-sections (1) and (2) is mandatory: "he shall be assessed." If there is doubt or dispute about the correct venue, it can only be decided after hearing the party concerned. Then come the provisions for transfer. Now it is, I think, necessary that there should be powers of transfer and the mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose who have businesses at stake, for the butcher, the baker and the candlestick maker. It lays down for this land "a rule of law" as understood in the free democracies of the world. It constitutes India into a Sovereign Democratic Republic and guarantees in every page rights and freedom to the individual side by side and consistent with the overriding power of the State to act for the common good of all. I make no apology for turning to older democracies and drawing inspiration from them, for though our law is an amalgam drawn from many sources, its firmest foundations are rooted in the freedoms of other lands where men are free in the democratic sense of the term. England has no fundamental rights as such and its Parliament is supreme but the liberty of the subject is guarded there as jealously as the supremacy of Parliament. The heart and core of a democracy lies in the judicial process, and that means independent and fearless judges free from executive control brought up in judicial traditions and trained to judicial ways of working and thinking. The main bulwarks of liberty and freedom lie there and it is clear to me that uncontrolled powers of discrimination in matters th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is supreme and its action is not fettered by a written Constitution, but the encroachment on the liberty of the subject was so great that the House of Lords was reluctant to reach the conclusion which it ultimately did by a majority, that that had in fact been done; and one of the learned Law Lords, Lord Atkin, read a powerful dissenting opinion. One of his criticisms at page 226 was that the order of detention was made, "by an executive minister and not by any kind of judicial officer; it is not made after any inquiry as to facts to which the subject is party, it cannot be reversed on any appeal ...... It is an absolute power which, so far as I know, has never been given before to the executive. " In my opinion, that is the very point here. In England the power can be conferred but, because it so vitally affects the liberty of the subject, the judges there fight against any interpretation that would lead to that conclusion and in the end reach it only when compelled to do so for overwhelming reasons. In India the fundamental freedoms conferred by the Constitution are guarded with equally jealous care and it seems to me that the whole point of having this Chapter on Fundament ..... X X X X Extracts X X X X X X X X Extracts X X X X
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