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PETITIONER: DEWAN BAHADUR SETH GOPAL DAS MOHTA

       Vs.

RESPONDENT: THE UNION OF INDIA AND ANOTHER.

DATE OF JUDGMENT: 21/10/1954

BENCH: MAHAJAN, MEHAR CHAND (CJ) BENCH: MAHAJAN, MEHAR CHAND (CJ) DAS, SUDHI RANJAN HASAN, GHULAM BHAGWATI, NATWARLAL H. AIYYAR, T.L. VENKATARAMA

CITATION:  1955 AIR    1            1955 SCR  (1) 773  CITATOR INFO :  R          1955 SC 257  (2)  R          1959 SC 149  (16,30,51,52)  HO         1961 SC1457  (6)

ACT:    Constitution   of  India,  Art.  32-Taxation  on   Income (Investigation Commission) Act, 1947 (XXX of 1947) s.  5(1)- Investigation and Report by Commission in respect of profits made  by assessee and tax payable by  him-Mutual  settlement between  assessee  and Government-Petition  under  Art.  32- Whether competent.

HEADNOTE:    The petitioner, a business man, was alleged to have  made huge  profits  during  the  years of  War  and  the  Central Government  acting under s. 5(1) of the Taxation  on  Income (Investigation Commission) Act, 1947 (XXX of 1947)  referred his  case to the Investigation Commission for  investigation and  report.  During the pendency of the  investigation  the petitioner’s application for settlement under the provisions of  s.  8-A of Act XXX of 1947 was accepted by  the  Central Government and in pursuance thereof the tax was made payable by installments and the claim for evaded income-tax was thus finally settled be mutual agreement.  When the  installments in  the  sum  of  Rs. 4 lacs  odd  still  remained  due  the petitioner  preferred the present petition under Art. 32  of the Constitution alleging that the entire proceedings  under Act  XXX  of  1947,  were illegal,  ultra  vires,  void  and unconstitutional,  that the Income-tax authorities were  not competent  to recover the amount. due from him and that  ss. 5, 6, 7 and 8 of the Act were ultra vires as they  infringed Arts. 14, 19(1) (f) and 31 of the Constitution.    Held,  that the petition under Art. 32 was not  competent as  whatever  had already been paid or  whatever  was  still recoverable from the petitioner was being recovered. on  the basis of the 99 774 settlement  between him and the Government.  Article  32  is

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not  intended for relief against the voluntary actions of  a person.     Suraj Mall Mohta Co. v. A. V. Visvanatha Sastri  (A.I.R. 1954 B.C. 545) referred to.

JUDGMENT: ORIGINAL  JURISDICTION: Petition No. 315 of  1954.  Petition under  article  32 of the Constitution  for  enforcement  of Fundamental Rights.    H.J.  Umrigar,  Narain  Andley,  J.  B.  Dadachanji   and Rajinder Narain for the petitioner.    M.     C. Setalvad, Attorney-General for India, and C.   K. Daphtary, Solicitor-General for India (G.  N. Joshi,  Porusa Mehta and P. G. Gokle, with them) for the respondents.     1954.   October  2  1. The Judgment  of  the  Court  was delivered by        MEHR CHAND MAHAJAN C.J.-The petitioner in this matter is  a resident of Akola in the State of Madhya  Pradesh  and carries  on  business  in various lines,  i.e.,  oil  mills, banking, money lending, etc.  It is alleged that during  the war  years he made huge profits but evaded payment  of  tax. In  the  year  1948 the  Central  Government,  acting  under section  5(1)  of  the  Taxation  on  Income  (Investigation Commission)   Act,   1947,   referred  his   case   to   the Investigation  Commission for investigation and  report,  in respect  of  the  profits  made by  him  during  the  period commencing with 1st of January, 1939, and ending on 31st  of December,   1947.   The  Commission,  after   investigation, reported  on the 28th of February, 1951, that the income  of the  petitioner concealed and withheld from taxation was  in the sum of Rs. 27,25,363 and the tax payable by him amounted to Rs. 18,44,949.       During  the  pendency of the investigation  the  peti- tioner  applied  for  settlement  under  the  provisions  of section  8-A  of  Act XXX of  1947.   This  application  was forwarded  along  with the report by the Commission  to  the Central  Government.   In  the  settlement  application  the applicant  proposed that he was prepared to pay the  sum  of RE;. 18,44,949 as under:                             775 On or before 25-6-1951--Rs. 3,44,949 On  or before 25-3-1952-- Rs. 5,00,000 On   or  before  25-3-1953--Rs.  5,00,0000 On  or before 25-3-1954--Rs. 5000,000  and  that, he be given  credit for a sum of Rs,  32,034-4.6 already  paid by him, The Central Government  accepted  this proposal  and  the  claim for  evaded  income-tax  was  thus finally   settled  by  mutual  agreement.    The   assessee, subsequently,  asked for more time to pay these  instalments and this was, also granted from time to time.     Commencing  from 16th of July, 1951, ,and till the  10th April,  1954. the petitioner paid a total sum of  about  Rs. 14,00,000  towards  discharge of the  liability  voluntarily agreed to by him on account of the tax evaded.  A sum of Rs. 4,50,000 still remains due and is payable in instalments  up to  the  25th of March, 1955.  By one of the  terms  of  the settlement   the  petitioner  undertook  not  to   transfer, mortgage,  charge  or  alienate or encumber  in  any  manner whatsoever  any  of  his movable  or  immovable  properties, barring  stock-intrade  of-the  business,  except  with  the permission of the Commissioner of Income-tax and except  for the  purpose  of  the  payment of  the  tax  due  under  the settlement.

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  In June, 1954, after the decision by this Court of  Suraj Mal  Mohta  v. A. V. Visvanatha Sastri and  Another(1),  the petitioner  preferred this petition under the provisions  of article  32  of the Constitution alleging that he  had  been advised that the entire proceedings under the Act which  had resulted  in the imposition upon him of a liability  of  Rs. 18,44,949  and in the payment already made of  an  aggregate amount  of Rs. 13,99,175 were wholly illegal,  ultra  vires, void   and   unconstitutional  and   that   the   Income-tax authorities were not legally entitled to recover the  amount of Rs. 4,50,000 from him.  In the grounds of the petition it was  stated that sections 5, 6, 7 and 8 of Act XXX  of  1947 were  invalid and ultra vires in so far as  they  contravene the  provisions  of  articles 14, 19(1) (f) and  31  of  the Constitution and that under the Act (1)  A.I.R. 1954 S.C. 545. 776 there  was no reasonable or equitable basic for  classifica- tion,  and that the Act gave to the execrative  unrestrained and  absolute right to pick and choose and to  differentiate between  the same class of taxpayers.  It was  also  alleged that  the  procedure prescribed by the Act  for  discovering concealed  profits was substantially different and was  more prejudicial  to the assessees than the procedure  prescribed under  the  Indian  Income-tax Act by section  34.   In  the concluding  paragraph of the petition it was prayed that  an appropriate writ or direction be issued quashing the  entire proceedings,  and  all orders passed under the  Act  by  the Central  Government  and  the  respondent  Commission,   and restraining  them  from taking  any  proceedings  whatsoever under the Act against the petitioner.  It was further prayed that a direction be issued for restoration to the petitioner of  a sum of Rs. 13,99,715-10-6 with interest at 6 per  cent and  that the respondents be further restrained from  taking any  action against the petitioner for the recovery  of  the sum of Rs. 4,50,000 with interest.     In  our judgment this petition is  wholly  misconceived. Whatever tax the petitioner has already paid, or whatever is still recoverable from him, is being recovered on the  basis of  the  settlement  proposed by him  and  accepted  by  the Central Government.  Because of his request for a settlement no assessment was made against him by following the whole of the  procedure  of the Income-tax Act.   In  this  situation unless  and  until  the petitioner can  establish  that  his consent  was  improperly procured and that he is  not  bound thereby  he  cannot  complain that any  of  his  fundamental rights  has been contravened for which he can  claim  relief under  article  32 of the Constitution.  Article 32  of  the Constitution  is  not  intended for  relief  against  the  I voluntary actions of a person.  His remedy, if any, lies in other appropriate proceedings.    The  learned  counsel for the petitioner  contended  that apparently  the application for a settlement seems  to  have been made under the pressure of circumstances and in view of the coercive machinery of Act XXX of 1947 and the settlement arrived in such circumstances                             777 was not binding and could not, be enforced.  Whatever be the merits  of such a contention, it obviously cannot be  raised in an application made under the provisions of article 32 of the   Constitution.   The  forum  for   investigating   such allegations is elsewhere.       The  result  is  that  this  petition  fails  and   is dismissed with costs.                                     Petition dismissed.

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