K.S. Rashid and Son Vs. The Income-Tax
Investigation Commission [1954] INSC 6 (22 January 1954)
MUKHERJEA, B.K.
HASAN, GHULAM MAHAJAN, MEHAR CHAND (CJ) DAS,
SUDHI RANJAN BOSE, VIVIAN
CITATION: 1954 AIR 207 1954 SCR 738
CITATOR INFO :
F 1956 SC 246 (23) R 1957 SC 882 (6) F 1959
SC 881 (6) AFR 1961 SC 532 (3,9,14,24,36,47) RF 1961 SC1506 (9)
ACT:
constitution of India, art. 226--Jurisdiction
of Punjab High Court to issue writs to Income-tax Investigation Commission
located in Delhi--Remedy under art. 226--Discretionary--Taxation on Income
(Investigation Commission) (Act XXX of 1947), ss. 5 and 8(5).
HEADNOTE:
The Punjab High Court has jurisdiction to
issue a writ under art. 226 of the Constitution to the Income-tax Investigation
Commission located in Delhi and investigating the case of the petitioner under
5 of the Taxation on Income (Investigation Commission) Act, 1947, although the
petitioners were assessees within the U.P. State and their original assessments
were made by the Income-tax authorities of that State.
Article 226 of the Constitution confers on
all the High Courts new and very wide powers in the matter of issuing writs
which they never possessed before. There are only two limitations placed upon
the exercise of such powers by a High Court; one is that the power is to be
exercised "throughout the territories in relation to which it exercises
jurisdiction", that is to say, the writs issued by the court cannot run
beyond the territories subject to its jurisdiction. The other is that the
person or authority to whom 739 the High Court is empowered to issue writs
"must be within those territories" and this ,implies that they must
be amenable to its jurisdiction either by residence or location within those territories.
The remedy provided in art. 226 of the
Constitution is a discretionary one and the High Court has always the
discretion to refuse to grant any writ if it is satisfied that the aggrieved
party can have an adequate or suitable relief elsewhere.
Ryots of Garabandho v. Zamindar of
Parlakimedi (70 I.A. 129) and Election Commission v; Saka Venkata Subba Rao
[1953] S.C.R. 1144 referred to.
CIVIL APPELLATE JURISDICTION: CIVIL APPEALS
Nos. 118 to 121 of 1952.
(Appeals under article 133 (1) (c) of the
Constitution of India from the Judgment and Order dated the 10th August, 1950,
of the High Court of Judicature, Punjab at Simla (Khosla and Kapur JJ.) in
Civil Miscellaneous Nos. 256, 260, 261 and 262 of 1950).
Dr. Balkshi Tek Chand (T. N. Sethi, with him)
for the appellants.
M.C. Setalvad, Attorney-General for India (Porus A. Mehta, with him) for the respondents.
1954. January, 22. The Judgment of the Court
was delivered by MUKHERJEA J.--These four consolidated appeals, which have come
before us, on a certificate granted by the High Court of Punjab under article
133 (1)(c)of the Constitution, are directed against one common judgment of a
Division Bench of that court dated the 10th August, 1950, by which the learned
Judges dismissed four analogous petitions, presented on behalf of the different
appellants, claiming reliefs under articles 226 and 227 of the Constitution, in
respect of certain income-tax investigation proceedings commenced against them
under Act XXX of 1947. It appears that a partnership firm carrying on business
under the name and style of K.S. Rashid & Son was started on the 5th of
May, 1934, the partners being three in number to wit K.S. Rashid Ahmed, Saeed
Ahmed, his son, and Mrs. Zafar Muhammed, his mother Mrs. Zafar Muhammed died on
the 7th of January, 1946, and as a result of her death the partnership stood
dissolved. Immediately on the day following, 740 that is to say on the 8th of
January, 1946, a new firm was started bearing the same name, with the two
surviving partners of the original firm and one Saeeda Begum, a daughter of
K.S. Rashid, as the third partner. On the 31st of December, 71947, the Central
Government referred the cases of this firm, as well as of the individuals
constituting it, to the Income-taxInvestigation Commission for enquiry and
report under section 5of Act XXX of 1947, presumably on the ground that there
had been substantial evasion of payment of income-tax in these cases. The
authorised official appointed under section 5 (4)(3) of the Act, who figures as
respondent No. 2 in all these appeals, in due course started investigation in
these cases and the appellants' complaint is, that contrary to the provisions
of the Act, he extended his investigations to a period subsequent to the 31st
March, 1943, up to which date the income-tax assessment in all these cases was
completed. A petition embodying this complaint was made -to the authorised
official on the 8th of April, 1949, but no order was passed on the petition, as
the Commission was expecting an early change of law in this respect. The law
was amended by an Ordinance dated the 5th of July, 1949, but the appellants
still contended that the amendment was neither retrospective in its operation,
nor did it enable the authorised official to carry on his investigation beyond the
31st March, 1943. The account books, however, were shown to the official under
protest. On the 17th September, 1949, three applications were filed before the
Commission, one with regard to the affairs of Mrs. Zafar Muhammed stating that
no investigation could take place in regard to her as she was already dead;the
second with regard to the affairs of Saeeda Begum on the ground that she being
a new partner and not having been assessed before, was not subject to 'the
jurisdiction of the Commission; while the third application was to the effect
that the new firm, which came into existence on the 8th of January, 1946, could
not have its affairs enquired into at all under the provisions of the Act.
After that, in June, 1950, four miscellaneous petitions were filed, (being C.M.
Gases Nos. 259 to 262 741 of 1950) on behalf of the appellants, before the High
Court of Punjab, and the prayers made therein were of a three- fold character.
It was prayed in the first place that a writ of prohibition might be issued to
the Commission and the authorised official directing them not to proceed with
the investigation of cases referred to the Commission under section 5 of Act
XXX of 1947. The second prayer was for a writ in the nature of certiorari for
quashing the proceedings already commenced. The third and the alternative claim
was that the proceedings before the Commission might be revised under article
277 of the Constitution and suitable orders passed as the justice of the case
would require. Upon these petitions, rules were issued on the 25th of July, 1950, after a report from the Investigation Commission had been called for. On
behalf of the respondents, who resisted these petitions, certain preliminary
points were raised in bar of the petitioners" claim. It was contended in
the first place that the petitioners being assessees belonging to U.P., their
assessments were to be made by the Income-tax Commissioner of that State and
the mere fact that the location of the Investigation Commission was in Delhi would not confer jurisdiction upon the Punjab High Court to issue writs under
article 226 of the Constitution. The second objection was that the Act itself
being of a special nature which created new rights and liabilities, the
remedies provided for in the Act itself for any breach or violation thereof
were the only remedies which could be pursued by the aggrieved parties and
article 226 or 227 of the Constitution would not be available to the
petitioners. The third ground taken was that the court could not give relief to
the petitioners because of sections 5(3) and 9 of Act XXX of 1947. These
contentions found favour with the learned Judges who heard the petitions, and
although they did not express any final opinion on the third point raised they
dismissed the applications of the petitioners on the first two grounds
mentioned above. It is against these orders of dismissal that the present
appeals have been taken to this court and Dr. Tek Chand, who appeared on behalf
of the appellants, has assailed the 742 propriety of the decision of the High
Court both the points.
So far as the first, point is concerned,
which relates to the question of jurisdiction of the Punjab High Court to issue
writs of certiorari or prohibition in these cases, the learned Judges based
their decision entirely upon the pronouncement of the Judicial Committee in the
well known case of Ryots of Garabandho v.' Zamindar of Parlakitnedi(1). The
question for consideration in that case was, whether the High Court of Madras
had jurisdiction to issue a writ of certiorari in respect of an order passed by
the Collective Board of Revenue, as an appellate authority, in certain
proceedings for settlement of rent between the Zamindar of Parlakimedi and the
Ryots of certain villages within his estate situated in the district of Ganjam
which was wholly outside the limits of the Presidency town of Madras. The
question was answered in the negative. The Judicial Committee laid down that
the three Chartered High Courts of Calcutta, Madras and Bombay had powers to
issue, what were known as the high prerogative writs, as successors to the
Supreme Courts which previously exercised jurisdiction over these Presidency
Towns; but the exercise of the powers under the Charter was limited to persons
within the ordinary original civil jurisdiction of the three High Courts, and
outside that jurisdiction it extended only to 'British subjects' as defined in
the Charter itself. It was held that the Supreme Court of Madras had no
jurisdiction under the Charter which created it to correct or control a country
court of the East India Company deciding a dispute between Indian inhabitants
of the Ganjam district about the rent payable for land in that district; and no
such power was given by any subsequent legislation to its successor, the High
Court . A contention seems to have been raised on behalf of the appellants that
the jurisdiction to issue writs could be rounded on the fact that the office of
the Board of Revenue, which was the appellate authority in the matter of
settlement of rents, was located within the town of Madras (1) 70 I.A. 129.
743 and the order complained of was made in
that town and reliance was placed in this connection upon the case of Nundo Lal
Bose v. The Calcutta Corporation (1), where a certiorari was issued by the Calcutta
High Court to quash an assessment made by the Commissioners of the town of
Calcutta on a certain dwelling house. This contention was repelled by the
Judicial 'Committee with the following observations:
"The question is whether the principle
of that case can be applied in the present case to the settlement of rent for
land in Ganjam, merely on the basis of the location of the Board of Revenue, as
a body which is ordinarily resident or located within the town of Madras, or on
the basis that the order complained of was made within the town. If so, it
would seem to follow that the jurisdiction of the High Court would be avoided
by the removal of the Board of Revenue beyond the outskirts of the town, and
that it would never attach but for the circumstance that an appeal is brought
to, or proceedings in revision taken by, the Board of Revenue.
Their Lordships think that the question of
jurisdiction must be regarded as one of substance, and that it would not have
been within the competence of the Supreme Court to claim jurisdiction over such
a matter as the present by issuing certiorari to the Board of Revenue on the
strength of its location in the town. Such a view would give jurisdiction to
the Supreme Court, in the matter of the settlement of rents for ryoti holdings
in Ganjam between parties not otherwise subject to its jurisdiction, which it
would not have had over the Revenue Officer who dealt with the matter at first
instance." It is on the basis of these observations of the Judicial
Committee that the learned Judges have held that the mere location of the
Investigation Commission in Delhi is not sufficient to confer jurisdiction upon
the Punjab High Court to issue a writ in the present case. It is said that the
petitioners are assessees within the U. P State and their original assessments
were made by the Income-tax Officers of that State.
(1)I.L.R. II Cal. 275 744 The subsequent
proceedings, which had to be taken in pursuance of the report of the
Investigation Commission, would have to be taken by the Income-tax authorities
in the U.P., and if a case had to be stated, it would be stated to the High
Court at Allahabad. Taking, therefore, as the Privy Council had said, that, the
question of jurisdiction is one of substance, it was held that no jurisdiction
in the present case could be vested in the Punjab High Court, for that
jurisdiction could be avoided simply by removal of the Commission from Delhi to
another place.
This line of reasoning does not appear to us
to be proper and we do not think that the decision in the Parlakimedi's case(1)
is really of assistance in determining the question of jurisdiction of the High
Courts in the matter of issuing writs under article 226 of the Constitution.
The whole law on this subject has been discussed and elucidated by this court
in its recent pronouncement in Election Commission v. Venkata Rao(2 ) where the
observations of the Judicial Committee in Parlakimedi's case, upon which
reliance has been placed by the Punjab High Court, have been fully explained.
It is to be noted first of all, that prior to the commencement of the
Constitution the powers of issuing prerogative writs could be exercised in
India only by the High Courts of Calcutta,, Madras and Bombay and that also
within very rigid and defined limits. The writs could be issued only to the
extent that the power in that respect was not taken away 'by the Codes of Civil
and Criminal Procedure (3) and they could be directed only to persons and
authorities within the original civil jurisdiction of these High Courts. The
Constitution introduced a fundamental change of law in this respect.
As has been explained by this Court in the
case referred to above, while article 225 of the Constitution preserves to the
existing High Courts the powers and jurisdictions which they had previously,
article 226 confers, on all the High Courts, new and very wide powers (1) 70
I.A. 139.
(1) [1953] S.C.R. 1144.
(3) Vide in this connection Besant v. Tire
Advocate General of Madras. 46 I.A. 176.
745 in the matter of issuing writs which they
never possessed before. "The makers of the Constitution" thus
observed Patanjali Sastri C.J.
in delivering the judgment of the court,
"having decided to provide for certain basic safeguards for the people in
the new set up, which they called fundamental rights, evidently thought it
necessary to provide also a quick and inexpensive remedy for the enforcement of
such rights, and, finding that the prerogative writs, which the courts in
England had developed and used whenever urgent necessity demanded immediate and
decisive interposition, were peculiarly suited for the purpose, they conferred,
in the State's sphere, new and wide powers on the High Courts of issuing
directions, orders, or writs primarily for the enforcement of fundamental
rights, the power to issue such directions, etc. 'for any other purpose' being
also included with a view apparently to place all the High Courts in this
country in somewhat the same position as the Court of King's Bench in
England." There are only two limitations placed upon the exercise of these
powers by a High Court under article 226 of the Constitution; one is that-the
power is to be exercised "throughout the territories in relation to which
it exercises jurisdiction", that is to say, the writs issued' by the court
cannot run beyond the territories subject to its jurisdiction.
The other limitation is that the person or
authority to whom the High Court is empowered to issue writs "must be
within those territories" and this implies that they must be amenable to
its jurisdiction either by residence or location within those territories. It
is with reference to these two conditions thus mentioned that the jurisdiction
of the High Courts to issue writs under article 226 of the Constitution is to
be determined. The observations of the Judicial Committee in Parlakimedi's
case(1) have strictly speaking no direct bearing on the point. It is true as
the Privy Council said in that case that the question of jurisdiction must be
regarded as one of substance, but the meaning and implication of this
observation could be ascertained only with reference to the context of (1) 701.
A. 129.
11--95 S.C. 1./59 746 the facts and
circumstances of that case. As was pointed out by this court in the case
referred to above(1): "Their Lordships considered, in the peculiar
situation they were dealing with, that the mere location of the appellate
authority alone in the town of Madras was not a sufficient basis for the
exercise of jurisdiction whereas both the subject matter, viz., the settlement
of rent for lands in Ganjam, and the Revenue Officer authorised to make the
settlement at first instance were outside the local limits of the jurisdiction
of the High Court. If the Court in Madras were recognised as having
jurisdiction to issue the writ of certiorari to the appellate authority in
Madras, it would practically be recognising the court's jurisdiction over the
Revenue Officer in Ganjam and the settlement of rents for lands there, which
their Lordships held it never had. That was the 'substance' of the matter they
were looking at." In our opinion, therefore, the first contention raised
by Dr. Tek Chand must be accepted as sound and the view taken by the Punjab
High Court on the question of jurisdiction cannot be sustained.
So far as the second point is concerned, the
High Court relies upon the ordinary rule of construction that where the
legislature has passed a new statute giving a new remedy, that remedy is the
only one which .could be pursued. It is said that the Taxation on Income
(Investigation Commission) Act, 1947, itself provides a remedy against any
wrong or' illegal order of the Investigating Commission and under section 8 (5)
of the Act, the aggrieved party can apply to the appropriate Commissioner of
Income-tax to refer to the High Court any question of law arising out of such
.order and thereupon the provisions of sections 66 and and 66-A of the Indian
Income-tax Act shall apply with this modification that the reference shall be
heard by a Bench of not less than three Judges of the High Court. We think that
it is not necessary for us to express any final opinion in this case as to
whether section 8 (5) of the Act is to be regarded as providing the only remedy
available to the aggrieved party and that it excludes altogether the remedy provided
for (1) A.I.R. z953 S.C. 310, 214; [1953] S.C.R. 1144.
747 under article 226 of the Constitution.
For purposes of this case it is enough to state- that the remedy provided for
in article 226 of the Constitution is a discretionary remedy and the High Court
has always the discretion to refuse to grant any writ if it is satisfied that
the aggrieved party can have an adequate or suitable relief elsewhere. So far
as the present case is concerned, it has been brought to our notice that the
appellants before us have already availed themselves of the remedy provided for
in section 8(5) of the Investigation Commission Act and that a reference has
been made to the High Court of Allahabad in terms of that provision which is
awaiting decision. In these circumstances, we think that it would not be proper
to allow the appellants to invoke the discretionary jurisdiction under article
226 of the Constitution at the present stage, and on this ground alone, we
would refuse to interfere with the orders made by the High Court. Dr. Tek Chand
argues that the Income-tax authorities have not referred all the matters to the
High Court which the appellants wanted them to do. But for this there is a
remedy provided in the Act itself and in case a proceeding occasions a gross
miscarriage of justice, there is always the jurisdiction in this court to
interfere by way of special leave. In the result, we dismiss the appeals but in
the circumstances of the case make no order as to costs. ' Appeals dismissed.
Agent for the appellant: Rajinder Narain.
Agent for the respondents: R.H. Dhebar.
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