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PETITIONER: BIDI SUPPLY CO.

       Vs.

RESPONDENT: THE UNION OF INDIA AND OTHERS.

DATE OF JUDGMENT: 20/03/1956

BENCH: DAS, SUDHI RANJAN BENCH: DAS, SUDHI RANJAN BOSE, VIVIAN BHAGWATI, NATWARLAL H. JAGANNADHADAS, B. SINHA, BHUVNESHWAR P.

CITATION:  1956 AIR  479            1956 SCR  267

ACT:        Constitution  of India, Art. 14-Indian Income Tax Act,  1922        (XI  of  1922), ss. 5 (7-A), 64(6)(b) as amended  by  Indian        Income  Tax (Amendment) Act, 1940 (Act XL  of  1940)-Whether        ultra  vires the Constitution-Transfer, Order of-By  Central        Board  of  Revenue under s.  5(7-A)-Transferring  assessment        proceeding  of  petitioner from Calcutta  to  Ranchi-Without        notice  to petitioner and without giving it  opportunity  to        make representation against such  decision-Constitutionality        of-Assessee, rights of-Under s. 64, of the Act.

HEADNOTE:        The  petitioners  registered  firm-has  its  head-office  in        Calcutta where its books of account are kept and  maintained        and  where  it has its banking account, the members  of  the        firm being citizens of India.  Since its inception the  firm        has all along been assessed to income-tax by the  Income-Tax        Officer,  District III, Calcutta.  The assessments  for  the        years  1948-49  and  1949-50 were made  by  the  Income  Tax        Officer, District III, Calcutta.  Notices under s. 22(2)  of        the  Income  Tax Act were issued to the  petitioner  by  the        Income Tax Officer, District III, Calcutta to submit returns        for  the years 1950-51, 1951-52, 1952-53, 1953-54 and  1954-        55.   The  Income Tax Officer, District III,  Calcutta  made        assessment   for  the  year  1950-51  on  18-12-1954   being        satisfied  that  the  principal place  of  business  of  the        petitioner was in Calcutta.        On  the 25th January 1955 the petitioner received  a  letter        from the Income-Tax Officer, District III, Calcutta that  in        pursuance to orders dated 13th December 1954 under s. 5(7-A)        of   the  Income  Tax  Act  its  assessment   records   were        transferred from  that office to the  Income Tax Officer,        Special  Circle,  Ranchi  with whom the  petitioner  was  to        correspond  in future regarding its assessment  proceedings.        The  order stated that the Central Board of Revenue  "hereby        transfers  the case of" the petitioner.  The petitioner  had        no  previous  notice  of the  intention  of  the  Income-Tax        authorities  to  transfer the  assessment  proceedings  from        Calcutta  to  Ranchi nor bad it an opportunity to  make  any

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      representation against such decision.  ’When called upon  to        submit  its  return  for the  assessment  year  1955-56  the        petitioner   by  an  application  under  Art.  32   of   the        Constitution contended that sub-section (7-A) of s. 5 of the        Indian  Income-Tax Act, 1922 and the order of transfer  made        thereunder were unconstitutional in that they infringed  the        fundamental rights guaranteed to the petitioner under  Arts.        14,  19(1)(g)  and  31 of the Constitution.  S.  64  of  the        Indian  Income-Tax Act makes provisions for determining  the        place  of  assessment.   Sub-section  (1)  of  that  section        provides        268        that where an assessee carried on a business, profession  or        vocation at any place he shall be assessed by the Income-Tax        Officer 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.  The section is imperative in  terms  and        gives a valuable right to the assessee.        By  amending  the Indian Income-Tax Act 1922 by  the  Indian        Income-Tax (Amendment) Act, 1940 (Act XL of 1940) by  adding        to  clause  (b) of sub-section (5) of s. 64  the  words  "in        consequence of any transfer made under sub-section (7-A)  of        s.  5"  and by adding subsection (7-A) to s. 5  the  benefit        conferred  by  the  provisions of subsection  (1)  and  sub-        section  (2) of s. 64 is taken away and is to be deemed  not        to  have  existed at any time as regards the  assessee  with        regard to whom a transfer is made under sub-section (7-A) of        s. 5.        Held  that as under s. 22(2) of the Act, the notice and  the        return  are to be confined to a particular assessment  years        sub-section (7-A) of s. 5 contemplates the transfer of  such        a  "case"  i.e. the assessment case for a  particular  year.        The provision that such a transfer may be made "at any stage        of   the  proceedings"  obviously   postulates   proceedings        actually pending and "stage’ I refers to a point in  between        the  commencement and ending of those proceedings.   Further        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.        Accordingly  such  an omnibus wholesale  order  of  transfer        dated 13th December 1954 as was made in the present case  is        not  contemplated  by  the  sub-section  and  therefore  the        impugned  order of transfer which was expressed  in  general        terms  without  any  reference to any  particular  case  and        without any limitation as to time was beyond the  competence        of the Central Board of Revenue and the petitioner was still        entitled to the benefit of the provisions of subsections (1)        and (2) of s. 64.        The impugned order is discriminatory against the  petitioner        and violates the fundamental right guaranteed to it by  Art.        14   of  the  Constitution  in-as-much  as  the   income-tax        authorities by an executive order unsupported by law  picked        out the present petitioner and transferred all his cases  by        an  omnibus order unlimited in point of time,which order  is        calculated   to  inflict  considerable   inconvenience   and

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      harassment on the petitioner.        BOSE J. Section 5(7-A) of the Indian Income-Tax Act is ultra        vires  Art. 14 of the Constitution and so is s. 64(5)(b)  in        so far as it        269        makes an order under s. 5(7-A) as it now exists, inviolate.        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.        Chiranjit Lal Chowdhury v. The Union of India ([1950] S.C.R.        860),  Budhan  Chowdhry and others v. The  State  of  Bihar,        ([1955] 1 S.C.R. 1045), Dayaldas Kushiram v. Commissioner of        Income-Tax Central (I.L.R. [1940] Bom. 650; [1940] 8  I.T.R.        139),  Eshugbai  Eleko’s case (L.R. [1931]  A.C.  662),  The        State  of  West Bengal v. Anwar Ali  Sarkar  ([1952]  S.C.R.        284),  Ram Prasad Narayan Sahi and Another v. The  State  of        Bihar  and  Others’  ([1953]  S.C.R.  1129),  Bowman’s  case        ([1917]  A.C. 406), Coal Control case ([1954]  S.C.R.  803),        State  of  Madras  v. V. G. Bow  ([1952]  S.C.R.  597),  and        Liversidge v. Sir John Anderson ([1942] A.C. 206),  referred        to.

JUDGMENT:        ORIGINAL JURISDICTION: Petition No. 271 of 1955.        Under article 32 of the Constitution for the enforcement  of        fundamental rights.        S.C.   Isaacs  (D.   N.  Mukerji,  with  him)   for   the        petitioner.        M.C.  Setalvad, Attorney-General for India, (B.  Sen  and        R. H. Dhebar, with him) for the respondents.        1956.  March 20.        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  the  petitioner  to  income-tax  and   other        ancillary reliefs.  The facts shortly are as follows:-        The   petitioner   is  a  firm  carrying  on   business   as        manufacturer and seller of Bidi.  In 1948 it was  registered        as a firm under the Indian Partnership Act.  It has its head        office  in Calcutta, where its books of account are said  to        be kept and maintained and        270        where  it is said to have its banking account.  It  has  its        factories  near Chakradharpur in the State of Bihar  but  it        has  no banking account there.  The members of 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 111, 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

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      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  from the Income-tax Officer, District III,  Calcutta        informing it "that in pursuance to orders under section 5(7-        A)  of  the  Income-tax  Act  your  assessment  records  are        transferred  from  this office to  the  Income-tax  Officer,        Special  Circle,  Ranchi  with whom you  may  correspond  in        future  regarding your assessment proceedingS".   The  order        referred to in the above communication was as follows:-        No. 55(70)IT/54.        Central Board of Revenue.        New Delhi, dated the 13th December, 1954.                             ORDER.        No. 87.  Under sub-section (7-A) of section 5 of the  Indian        Income-tax  Act,  1922  (XI of 1922) the  Central  Board  of        Revenue hereby transfers        271        the case of Biri Supply Company, 3/1, Madan Street, Calcutta        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  con-        tention 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  shall        not deny to any person equality before the law or the  equal        protection of the laws within the territories of India.  The        expression "the State" used in Part III of the  Constitution        which  deals  with fundamental rights includes,  unless  the        context otherwise requires, the Government and Parliament of        India and the Government and the legislatures of each of the        States  and  all  local  or  other  authorities  within  the        territory of India or under the control of the Government of        India.  The scope and effect of article 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        36        272

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      of  India(1) and ending with Budhan Chowdhry and  others  v.        The  State of Bihar(2).  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 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 and the object  of  the        Act under consideration.  It is also well-established by the        decisions   of   this  court  that   article   14   condemns        discrimination  not only by a substantive law but also by  a        law of procedure".        We have, therefore, to approach the problem posed before  us        bearing in mind the above principles laid down by this court        in  so  far as they may be applicable to the  facts  of  the        present case.        Turning now to the Indian Income-tax Act, 1922 we find  that        section  64  makes provision for determining  the  place  of        assessment.   By sub-section (1), where an assessee  carries        on a business, profession or vocation at any place, he shall        be assessed by the Income-tax Officer 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        (1) [1950] S.C.R. 869.        (2) [1955] 1 S.C.R. 1045.        273        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(1).        At pages 657 to 658 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,  and        the  area to which an Income-tax Officer is appointed  must,        so far as the exigencies of tax collection allow, bear  some        reasonable relation to the place where the assessee  carried        on business or resides.  There is Do evidence that there was        any difficulty in restricting the area to which the  Income-        tax   Officer,  Section  II  (Central),  was  appointed   to        something much narrower than the Bombay Presidency, Sind and        Baluchistan.  Therefore, in my opinion, Income-tax  Officer,        Section  II (Central), is not the Income-tax Officer of  the        area in which the applicant’s place of business is  situate,

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      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 pages 660-661:        "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        (1)  I.L.R. [1940] Bom. 650; [1940] 8 I.T.R. 139.        274        Indian  Income-tax  Act,  1922 was  amended  by  the  Indian        Income-tax (Amendment) Act, 1940 (Act 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 (7-A)  of        section 5" and by adding sub-section (7-A) 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  subsection  (2)        shall  not  apply and shall be deemed never at any  time  to        have applied to any assessee        (a) ...................................................... :         .....................................................        (b)where  by  any direction given or any  distribution  or        allocation  of work made by the Commissioner  of  Income-tax        under sub-section (5) of section 5, or in consequence of any        transfer  made  under  sub-section (7-A)  of  section  5,  a        particular  Income-tax  Officer has been  charged  with  the        function of assessing that assessee, or        (c) ........................................................        It  is  thus  clear from this  amendment  that  the  benefit        conferred  by  the provisions of sub-section  (1)  and  sub-        section  (2) are taken away and is to be deemed and  not  to        have existed at any time as regards the assessee with regard        to whom a transfer order is made under sub-section (7-A)  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(7-A)        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  (7-A) of section 5. This takes us to the  new  sub-        section (7-A) of section 5.        Sub-section (7-A) of section 5 runs as follows:         "(7-A) 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        275        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 assessee submits his  return        in the prescribed form.  It is quite clear from the  section        that  the  notice  and the return are to be  confined  to  a        particular assessment year and the sub-section  contemplates        the transfer of such a "case", i.e., the assessment case for

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      a  particular year.  The provision that such a transfer  may        be  made  "at  any  stage  of  the  proceedings"   obviously        postulates  proceedings actually pending and "stage"  refers        to  a point in between the commencement and ending of  those        proceedings.  Further the provision that 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, bad 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        276        of  that particular case.  The fact that it is necessary  or        desirable  to transfer a case of assessment of a  particular        assessee  for  any  particular  year  does  not  necessarily        indicate  that  it  is equally  necessary  or  desirable  to        transfer  another assessment case of that assessee  for  any        other  assessment year.  We are accordingly of  the  opinion        that the impugned order of transfer, which was expressed  in        general  terms without any reference to any particular  case        and  without any limitation as to time, was beyond the  com-        petence  of  the  Central  Board of  Revenue.   We  did  not        understand the learned Attorney-General to contend that such        was not the correct interpretation of the sub-section.        We  do  not consider it necessary, for the purpose  of  this        case, to pause to consider whether the constitutionality  of        sub-section  (7-A)  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 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  (7-A)  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  (7-A)  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        regards  his other case or cases.  As said by Lord Atkin  in        Eshugbai  Eleko’s  case(1)  the executive can  only  act  in        pursuance  of  the powers given to it by law and  it  cannot        interfere with the liberty, property        (1)L.R. [1931] A.C. 662, 670.        277

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      and  rights of the subject except on the condition  that  it        can  support  the legality of its action before  the  court.        Here there was no such order of transfer as is  contemplated        or  sanctioned  by  sub-section (7-A)   of  section  5  and,        therefore,  the present assessee still has the right,  along        with  all  other  Bidi merchants  carrying  on  business  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        legislation can arise.  Here "the State" which includes  its        Income-tax department has by an illegal order denied to  the        petitioner,  as compared with 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.        It  has  further  been urged that this  order  indirectly  C        affects  the  petitioner’s fundamental right  under  article        19(1)(f)  and  article 31.  There can be no  gainsaying  the        fact  that the order purports to deprive the  petitioner  of        its right under section 64 to which        278        it  would otherwise be entitled.  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 (7-A) 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(7-A) 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  contravene        article  14.   Despite the constant endeavour of  Judges  to        define  the  limits of this law, I am unable to  deduce  any        clear   cut  principle  from  the  oftrepeated  formula   of

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      classification.   As I have said in another case,  even  the        learned  Judges  who propound that theory and  endeavour  to        work  it  out are driven to concede that  classification  in        itself is not enough for the simple reason that anything can        be  classified  and  every  discriminatory  action  must  of        necessity  fall  into some category of  classification,  for        classification  is nothing 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        279        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        the  American decisions and was stated thus in The State  of        West Bengal v. Anwar Ali Sarkar(1):        be  fulfilled,, namely (1) that the classification  must  be        founded on an, intelligible differentia which  distinguishes        those  that  are grouped together from others and  (2)  that        differentia  must  have a rational relation  to  the  object        sought to be achieved by the Act".        Mukherjea, J. (as he then was) said at page 321 ibid that        "the classification should never be arbitrary, artificial or        evasive.   It  must rest always upon  real  and  substantial        distinction  bearing a reasonable and just relation  to  the        thing  in 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".        (1) [1952] S.C.R. 284, 334.        (2) [1953] S.C.R. 1129.        37        280        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

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      of India".        The truth is that it is impossible to be precise, for we are        dealing with intangibles and though the results are clear it        is  impossible  to  pin  the thought  down  to  any  precise        analysis.   Article 14 sets out, to my mind, an attitude  of        mind, a way of life, rather than a precise rule of law.   It        embodies  a  general awareness in the consciousness  of  the        people  at large of something that exists and which is  very        real but which cannot be pinned down to any precise analysis        of fact save to say in a given case that it falls this  side        of the line or that, and 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(1)).        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        (1)[1917] A.C. 406, 466, 467.        281        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 T. 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 the root of the matter; nor am I  alone        in  so  thinking  though  my approach  is  more  direct  and        fundamental  than is usual.  Patanjali Sastri, C.J. said  in        The  State of West Bengal v. Anwar., Ali Sarkar(1) that  the        reported decisions        "underline  the futility of wordy formulation, of  so-called        ’tests’ in solving problems presented by concrete cases".        I  endeavoured  to  point out in my judgment  in  Anwar  Ali        Sarkar’s  case(1)  at  page 361 that  one  can  conceive  of        classifications  that  conform to all these  rules  and  yet        which  are  bad:  classifications made in  the  utmost  good        faith;/classifications  that  are scientific  and  rational,        that ’Will have direct and reasonable relation 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(1) 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 discrimina-

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      (1)  [1952] S.C.R. 284, 297.        282        tion  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, because that authority will say:-I        am not to ’blame as I am acting under the Act.  It is  clear        that  if the argument were to be accepted, article 14  could        be  easily  defeated.  I think the fallacy of  the  argument        lies in overlooking the fact that the ’insidious discrimina-        tion  complained of is incorporated in the Act  itself’,  it        being  so drafted that whenever any discrimination  is  made        such discrimination would be ultimately traceable to it".        Nor,  in the past, has this Court hesitated to strike,  down        the  Act or Order itself when it confers unrestricted  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 the State of Madras v. V. G. Row(2).  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:  "be  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 conferral of such        (1) [1954] S.C.R. 803.        (2) [1952] S.C.R. 597.        283        powers would not offend article 14.  But, put at its lowest,        it  is anomalous that when similar powers are  conferred  on        the High Courts and even on this Court under., for  example,        the Code of Criminal Procedure, they should be hedged  round        with  limitations, whereas, when it comes to a  Commissioner        of   Income-tax  or  the  Central  Board  of   Revenue,   no        limitations  whatever are placed upon them.  Section 526  of        the  Criminal Procedure Code confers only limited powers  of        transfer  on  the High Court and article 136  empowers  this        Court  to intervene should those powers be exceeded  by  the        High Court and should this Court in its discretion feel 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

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      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 India to the        other; nor is that power unused.  We have before us in  this        Court  a case pending in which a transfer has  been  ordered        from Calcutta in West Bengal to Ambala in the Punjab.        After  all, for whose benefit was the Constitution  enacted?        What was the point of making all this        284        pother  about  fundamental  rights?  I  am  clear  that  the        Constitution is not for the exclusive benefit of governments        and  States; it is not only for lawyers and politicians  and        officials  and those highly placed.  It also exists for  the        common man, for the poor and the humble, for those 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        that  seriously  affect the lives and properties  of  people        cannot  be left to executive or quasi executive bodies  even        if  they exercise quasi judicial functions because they  are        then  invested with an authority that even  Parliament  does        not possess.  Under the Constitution, Acts of Parliament are        subject  to judicial review particularly when they are  said        to  infringe  fundamental rights, therefore,  if  under  the        Constitution Parliament itself has not uncontrolled  freedom        of  action,  it  is evident that  it  cannot  invest  lesser        authorities with that power.  If the legislature itself  had        done here what the Central Board of Revenue        285        has  done  and had 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(1):        "It   is  impossible  to  conceive  of  a  worse   form   of

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      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 there is no classification at all, and  no        attempt has been made to select any individual or group with        reference to any differentiating attribute peculiar to  that        individual  or  group  and not  possessed  by  others,  this        presumption is of little or no assistance".        In  the  case  of Liversidge v.  Sir  John  Anderson(1)  the        learned  Law  Lords were at great pains to see  whether  the        British  Parliament  had  in  fact  left  the  matter  under        consideration  there  to the subjective  satisfaction  of  a        Secretary  of  State.  There was no doubt that  the  British        Parliament could do so because 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 ulti-        (1) [1953] S.C.R. 1129, 1143.        (2) [1942] A.C. 206.        286        mately  did by a majority, 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 Fundamental Rights is to ensure  that        the  very  things that the English judges fight  against  in        their courts will not happen here.        In  England the task of the judges is to see  whether  their        Parliament  has  conferred those wide powers; in  India  our        task  is  to see whether the Constitution has done  so.   In        England  the  conferral of those powers  is  never  conceded        unless Parliament uses clear, express and unambiguous words.        In  our Constitution I find an absence of any such  clarity;        on the contrary, the whole trend of the Constitution  points        the other way          If  an executive authority or  a quasi judicial  body,  or        even  Parliament  itself,  were 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        satis-

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      287        faction  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.        In  a democracy functioning under the Rule of Law it is  not        enough to do justice or to do the right thing; justice  must        be seen to be done and a satisfaction and sense of  security        engendered in the minds of the people at large in place of a        vague  uneasiness  that Star Chambers are  arising  in  this        land.   We  have  received  a  rich  heritage  from  a  very        variegated  past.   But it is a treasure which can  only  be        kept at the cost of ceaseless and watchful guarding.   There        is  no room for complacency, for in the absence of  constant        vigilance  we  run the risk of losing it.   "It  can  happen        here."         I  would hold for these reasons, and in particular for  the        reason  given by Fazl Ali J. in the passage from one of  his        judgments  quoted above, that section 5(7-A) is ultra  vires        article 14 of the Constitution and so is section 64(5)(b) in        so  far as it makes an order under section 5(7-A) as it  now        exists, inviolate.        I would allow the petition.        38        288