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PETITIONER: K.S. RASHID AND SON

       Vs.

RESPONDENT: THE INCOME-TAX INVESTIGATION  COMMISSION, ETC.(With connecte

DATE OF JUDGMENT: 22/01/1954

BENCH: MUKHERJEA, B.K. BENCH: 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

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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.

JUDGMENT:     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

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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

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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  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

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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 b.e  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

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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

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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. 748