# I96r RANJIT SINGH April r4 v. THE COMMISSIONER OF INCOME-TAX, U. P. AND OTHERS

- **Citation:** [1962] 1 S.C.R. 966
- **Court:** Supreme Court of India
- **Decided:** 1959-06-08
- **Case number:** Writ Petition No. 85 of 1959
- **Bench:** S. K. Das, J. L. Kapur, M. Hidayatullah, J. C. Shah, T. L. Venkatarama Aiyar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/i96r-ranjit-singh-april-r4-v-the-commissioner-of-income-tax-u-p-and-others-2113
- **Pages:** 12

## Headnote

Income Tax-Evasion of Taxation-Case referred lo Investigation Commission-Settlement of Case-Notice of demand-Commencement of Constitution-Reco11ery of tax thereafter-LegalityTaxation on Income (Investigation Commission.) Act, 1947 (30 of
1947), ss. 8, 8-A-Constitution of lndia, Art. r4.
In 1948 the Central Government referred a number of cases
in which the petitioner was concerned, to the Income-tax Investigation Commission set up under the relevant provisions of the
Taxation on Income (Investigation Commission) Act, 1947· After
the Commissi~n had submitted the report under s. 8-A(l} of the
Act, in which the total tax payable on the undisclosed income
upto March 31, 1947, was estimated, the petitioner applied for
a settlement of his case by offering to pay the amount of tax in
instalments and by agreeing to pay the whole amount immediately in case of default in payment of any of the instalments
in time. The Central Government accepted the terms suggested
by the petitioner and passed an order on November 21, 1949,
under s. 8-A(2) ·of the Act directing the service of a demand
notice on the petitioner and recovery of the tax in accordance
with the terms and conditions of the settlement. On December
2, 1949, a notice of demand was issued to the petitioner who, in
pursuance thereof, made certain payments. But as the petitioner was unable to make full payment within the stipulated
periods, the whole amount outstanding became immediately
payable and certain properties belonging to him and his family
were attached by the Collector of the district concerned for the
recovery of the amount. On June 8, 1959, the petitioner filed a
writ petition under Art. 32 of the Constitution of India challenging the legality of the demand notice dated December 2,
1949, and the subsequent proceedings taken in pursuance of
that notice on the ground that after the coming into force of
the Constitution of India on January 26, r950, they were violative of the fundamental right of equal protection of the laws
guaranteed under Art. 14, inasmuch as what he had agreed to
pay the Government as a result of the settlement was really a
debt and be had been dealt with differently from other debtors
who.owed money to the State under a contractnal liability.
Held,
(r) that the proceedings against the petitioner culminating in the service of the notice of demand against him
were all completed before the coming into force of th~ Constitution and the petitioner cannot challenge those proceedrngs under
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1 S.C.R. SUPREME COURT REPORTS
967
Art. r4 of the Constitution, because it is well settled that the
Constitution is prospective and not retrospective;
(2) that the true scope and effect of sub-s. (2) of s. 8-A is
to enforce the terms of any settlement arrived at in pursuance
of sub-s. (r), which was really income-tax which had escaped
assessment;
(3) that the petitioner belonged not to the larger class of
debtors of Government but to a special class which had evaded
payment of income-tax for which the procedure laid down in
s. 8-A(2) was one and the same, and that the classification being
reasonable having a just relation to the object of the provision,
the recovery procedure cannot be challenged as discriminatory
under A rt. 14.
SurajMallMohtaand Co. v. A. V. Visvanatha Sastri and
Another, [1955] l S.C.R. 448, M. CT. Muthiah & two Others v.
The
Commissioner of Income-tax, Madras &
Another, [r955]
2 S.C.R. 1247 and Basheshar Nath v. The Commissioner of Incometax, Delhi & Rajasthan and Another, [1959] Supp. l S.C.R. 528,
distinguished.
ORIGINAL JURISDICTION:
Writ Petition No. 85 of
1959.
Writ Petition under Art. 32 of the Constitution of
India for the enforcement of fundamental rights.
A. V. Viswanatha Sastri, R. S. Pathak, S .. N. Andley,
Rameshwar Nath and P. L. Vohra, for the petitioner.
K. N. Rajagopala Sastri and D. Gupta, for respondents Nos. I and 2.
1961.' April 14. The Judgment of the Court was
delivered by
Ranjit Singh
v.
Commissioner of
I

## Text

966
SUPREME COURT REPORTS
[1962]
I96r
RANJIT SINGH
April r4.
V.
THE COMMISSIONER OF INCOME-TAX,
U. P. AND OTHERS.
(S. K. DAS, J. L. KAPUR, M. HIDAYATULLAH,
J. C. SHAH and T. L. VENKATARAMA AIYAR, JJ.)
Income Tax-Evasion of Taxation-Case referred lo Investigation Commission-Settlement of Case-Notice of demand-Commencement of Constitution-Reco11ery of tax thereafter-LegalityTaxation on Income (Investigation Commission.) Act, 1947 (30 of
1947), ss. 8, 8-A-Constitution of lndia, Art. r4.
In 1948 the Central Government referred a number of cases
in which the petitioner was concerned, to the Income-tax Investigation Commission set up under the relevant provisions of the
Taxation on Income (Investigation Commission) Act, 1947· After
the Commissi~n had submitted the report under s. 8-A(l} of the
Act, in which the total tax payable on the undisclosed income
upto March 31, 1947, was estimated, the petitioner applied for
a settlement of his case by offering to pay the amount of tax in
instalments and by agreeing to pay the whole amount immediately in case of default in payment of any of the instalments
in time. The Central Government accepted the terms suggested
by the petitioner and passed an order on November 21, 1949,
under s. 8-A(2) ·of the Act directing the service of a demand
notice on the petitioner and recovery of the tax in accordance
with the terms and conditions of the settlement. On December
2, 1949, a notice of demand was issued to the petitioner who, in
pursuance thereof, made certain payments. But as the petitioner was unable to make full payment within the stipulated
periods, the whole amount outstanding became immediately
payable and certain properties belonging to him and his family
were attached by the Collector of the district concerned for the
recovery of the amount. On June 8, 1959, the petitioner filed a
writ petition under Art. 32 of the Constitution of India challenging the legality of the demand notice dated December 2,
1949, and the subsequent proceedings taken in pursuance of
that notice on the ground that after the coming into force of
the Constitution of India on January 26, r950, they were violative of the fundamental right of equal protection of the laws
guaranteed under Art. 14, inasmuch as what he had agreed to
pay the Government as a result of the settlement was really a
debt and be had been dealt with differently from other debtors
who.owed money to the State under a contractnal liability.
Held,
(r) that the proceedings against the petitioner culminating in the service of the notice of demand against him
were all completed before the coming into force of th~ Constitution and the petitioner cannot challenge those proceedrngs under
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1 S.C.R. SUPREME COURT REPORTS
967
Art. r4 of the Constitution, because it is well settled that the
Constitution is prospective and not retrospective;
(2) that the true scope and effect of sub-s. (2) of s. 8-A is
to enforce the terms of any settlement arrived at in pursuance
of sub-s. (r), which was really income-tax which had escaped
assessment;
(3) that the petitioner belonged not to the larger class of
debtors of Government but to a special class which had evaded
payment of income-tax for which the procedure laid down in
s. 8-A(2) was one and the same, and that the classification being
reasonable having a just relation to the object of the provision,
the recovery procedure cannot be challenged as discriminatory
under A rt. 14.
SurajMallMohtaand Co. v. A. V. Visvanatha Sastri and
Another, [1955] l S.C.R. 448, M. CT. Muthiah & two Others v.
The
Commissioner of Income-tax, Madras &
Another, [r955]
2 S.C.R. 1247 and Basheshar Nath v. The Commissioner of Incometax, Delhi & Rajasthan and Another, [1959] Supp. l S.C.R. 528,
distinguished.
ORIGINAL JURISDICTION:
Writ Petition No. 85 of
1959.
Writ Petition under Art. 32 of the Constitution of
India for the enforcement of fundamental rights.
A. V. Viswanatha Sastri, R. S. Pathak, S .. N. Andley,
Rameshwar Nath and P. L. Vohra, for the petitioner.
K. N. Rajagopala Sastri and D. Gupta, for respondents Nos. I and 2.
1961.' April 14. The Judgment of the Court was
delivered by
Ranjit Singh
v.
Commissioner of
Income·tax,
U. P.
S. K. DAS, J.-One Ranjit Singh is the petitioner s. K. Das ;.
before us. The respondents are the Commissioner of
Income-tax, Lucknow, the Income-tax Officer, Lucknow, and the Collectors of three districts in U ttar
Pradesh, namely, Dehra Dun, Kanpur and Lucknow,
being officers under whose orders certain properties of
the petitioner and his family have been attached in
pursuance of a notice of demand issued under s. 29 of
the Indian Income-tax Act, 1922, in circumstances
which we shall presently state.
The facts are shortly these. In 1948 the Central
Government referred a number of cases in which the
petitioner was concerned to the Income-tax Investigation· Commission set up under the relevant provisions
968
SUPREME COURT REPORTS
(1962]
'96'
of the Taxation on Income (Investigation Commission)
Act, 1947 (Act XXX of 1947), hereinafter referred
Ranjit Singh
v.
to as the Act. On May 30, 1948, the Secretary
Commissioner of of the Commission issued a notice to the petitioner
Income-tax,
to furnish a list of businesses or concerns in which
u. P.
the petitioner was interested and to produce the
account books, registers etc. relating thereto. The
S. J(. Das ].
petitioner complied with the notice. Then, an Authorised Official appointed by the Commission commenced
an investigation into the cases in February, 1949, and
in due course submitted a report to the Commission.
The Commission heard the petitioner and on April 16,
1949, submitted a report under s. 8-A(l) of the Act.
The findings of the Commission appear from the
following extract from their report:
"The total tax payable on the undisclosed income upto March 31, 1947 would accordingly be
Rs. 6,61,917 .
.... ················· .............................................. .
The amount of Rs. 6,61,917 may be recovered
from Mr. Ranjit Singh and from the family assets in
the hands of Mr. Ranjit Singh. In view of the
admission recorded as num her (iii) in para 6 supra,
the tax will also be recoverable from the properties
acquired between 1939 and 1947 in the names of
Mrs. Ranjit Singh and Mr. Ranjit Singh's sons
Baljit Singh and Satendrajit Singh. In the circumstances, we recommend that no penalty be levied
on the assessee in respect of non-disclosures and
false or incorrect statements so far made either to
the income-tax authorities or in the course of the
present proceedings (including those before the
Authorised Official). Mr. Ranjit Singh and Mr.
Vaidyanatha Ayyar (representative of Mr. Ranjit
Singh) have asked that they be allowed sufficiently
long time to pay up the tax. It has been represented that out of taxes already assessed by the
Income-tax Department about Rs. 3,86,000 is still
due and the addition of the amount leviable under
this report will bring the assessee's total liability to
about 10! lakhs. Mr. Ranjit Singh has asked that
he may be permitted to pay up this sum in not
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1 S.C.R. SUPREME COURT REPORTS
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more than five years, in instalments Of not leSS than
r96I
a lakh of rupees at a time. While we do not wish
Ranjit Singh
to go into the details of the offer, we recommend
v.
this request for time for favourable consideration Commissioner of
by Government."
. lncome-ta>,
Then, on November 7, 1949, the petitioner, his wife
u. P.
and two sons submitted a petition to the Commission s. I<. Das J.
in which they accepted the findings of the Commission
as correct and offered to pay the tax in instalments
in accordance with certain terms of settlement. Some
of these terms are:
"3. \Ve offer to pay the aforesaid amount of
Rs. 6,61,9i7 as per the following instalments:
(1) on or before the 31st March, 1951 Rs. 1,00,000.
(2) on or before the 31st March, 1952 Rs. 2,31,000.
(3) on or before the 30th June, 1952 Rs. 3,30,917 .
. 4. We, however, pray that so far as the last
instalment is concerned in case we are unable to
pay the same by· the date mentioned above and are
able to satisfy the Central Board of Revenue that
we have failed to raise the money for reasons
beyond our control and for no fault of our own, a
suitable extension of time may be granted.
5. In respect of the other instalments, we agree
that in case 'of default in the payment of any one of
them, the whole amount of tax outstanding at the
time shall become immediately payable."
The report of the Commission and the terms suggested
by the petitioner for a settlement were accepted by
the Central Government and an order was passed
under s. 8-A(2) of the Act on November 21, 1949,
which stated in its operative part that a demand
notice be served immediately by the Income-tax Officer concerned under s. 29 of the Indian Income-tax
Act, 1922, on the petitioner in accordance with the
terms and conditions of settlement and that all such
other proceedings under the Indian Income, tax Act
or under any other law as may be necessary be taken
with a view to enforce the payment of the demand
and terms and conditions of the septlement.
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SUPRE1ME. COURT REPORTS
r96r
The respondents allege that a demand notice was
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accordingly issued to the petitioner on December 2,
""1'' .Sing'
1949. The petitioner alleges, however, that he receivCommi~ion" of ed the notice in or about April, 1950, after the ConstiIncome-tax,
• tution of India had come into force.
Thereafter, in
u. P.
pursuance of the demand notice certain payments
~-
were made by the petitioner. The petitioner was,
5 · I<. Das f. however, unable to make full payment within the
stipulated periods mentioned in the demand notice.
Tl!e result was that according to the terms of
settlement the whole amount outstanding at the time
became immediately payable by the petitioner. Then,
certain properties of the petitioner and his family
were attached by the Collector of the district concerned in pursuance of the orders received ·from time to
time from the Income-tax Officer.
On June 8, 1959, the petitioner filed the present writ
petition challenging the legality of the demand notice
dated December 2, 1949, and the subsequent proceedings taken in pursuance of that notice. The case of
the petitioner is that after the coming into force of
the Constitution of India on January 26, 1950, the
demand notice could not be given effect to and the
proceedings taken in pursuance of that notice are unconstitutional inasmuch as they violate his fundamental rights guaranteed by the Constitution. In the
petition a reference has been made to Articles 14, 31
and 19(l)(g) of the Constitution, but the argument
before us has proceeded on the contention urged on
behalf of the petitioner that there has been a violation of the fundamental right of equal protection of
the laws guaranteed to him under Art. 14 of the Constitution inasmuch as he has been dealt with differently from other debtors who owe money to the State
under a contractual liability. The 'substantial prayer
of the netitioner is for the issuance of a writ of mandamus directing the respondents not to give effect to
the notice of demand dated December 2, 1949, nor to
take any proceedings for enforcing the terms of settle -
ment and for recovery of the sums specified therein.
The petition has been contested by the respondents
and the principal point taken on their behalf is that
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l S.C.R. SUPREME COURT REPORTS
971
the legality of the demand ~otice dated December 2,
196'
194.9, cannot be challenged by the petitioner on the
Ranjit Singh
strength of the provisions of the Constitution, because
v.
the Constitution is prospectiVE( and not retrospective; Commissioner of
secondly, it is contended on behalf of the respondents
Income-tax.
that the subsequent proceedings taken in pursuance of
u. P.
the demand notice aforesaid do not in any way violate the right of equal protection of the laws guarans. re Das f.
teed unde/ Art. 14 of the Constitution.
It is convenient at this stage to refer to some of the
earlier decisions of this Court on the question of constitutionality of some of the provisions of the Act. On
May 28, 1954, this Court delivered judgment in Suraj
Mall Mohta and Go. v. A. V. Visvanatha Sastri and
Another (1). It is not necessary to state the facts of
that decision. It is enough to say that it was held
therein that sub-s. (4) ofs. 5 of the Act was bad, as it
offended the provisions of Art. 14 of the Constitution.
Sub-section (4) of s. 5 of the Act having been declared
void, Parliament passed the Indian Income-tax
Amendment Act (33 of 1954) amending s. 34 of the
Indian Income-tax Act, 192.2.
As a result of this
amendment, the validity of sub-s. (1) of s. 5 of the
Act came in for challenge on the ground that the
Income-tax Officer could pick out some out of the
class of substantial tax evaders and refer their cases
under sub-s. (1) of s. 5 while dealing with other such
persons under amended s. 34 of the Indian Incometax Act. In Shree Meenakshi Mills Ltd., Madurai v.
A. V. Visvanatha Sastri and Another('), sub-s. (1) of
s. 5 of the Act was held to be bad on that ground. It
should be noted that in none of the petitions disposed
of by that judgment had any assessment been made
under the Act and this Court only, prohibited further
proceedings before the Commission under the Act.
Finally, on December 20, 1955, came the decision of
this Court in M. OT. 211uthiah & two Others v. The
Commissioner of Income-tax, Madras & Another('). In
that case, on a reference under s. 5(1) of the Act, the
Commission submitted its report to Government under
(r) [r955] r S.C.R. 448.
(2) [1955] r S.C.R. 787.
(3) [r955] 2 S.C.R. 1247.
- 972
SUPREME COURT REPORTS
[1962]
s. 8(1) of the Act on August 26, 1952-that is, after
the coming into force of the Constitution, and the
Ranjit Singh
v.
Central Government made its order under s. 8(2) of
Commissioner of the Act on Septembe~ 16, 1952. In these circumIncome-tax,
stances it was held:
u. P.
"The result, therefore, is that barring the cases of
persons which were already concluded by reports
made by the Commission and the directions given
by the Central Government under section 8(2) of
the Act XXX of 1947 culminating in the assessment
or re-assessment of the escaped income, those cases
which were pending on the 26th January 1950 for
investigation before the Commission as also the
assessment or re-assessment proceedings which were
pending on the 26th January 1950 before the
Income-tax Officers concerned in pursuance of the
directions given by the Central Government under
section 8(2) of the Act would be hit by Article 14 of
the Constitution and would be invalidated."
S. J(. Das ].
Lastly, came the decision in Basheshar Nath v. The
Commissioner of Income-tax, Delhi & Rajasthan and
Another (1). That was a case of a settlement under
s. 8-A of the Act as in the present case, but the fact
which distinguishes that case from the present is that
the settlement there was made after the commencement of the Constitution. It was held therein that
the settlement was the result of a procedure which
became discriminatory. after the commencement of
the Constitution and was therefore bad, and as the
discriminatory process of investigation continued even
after the commencement of the Constitution, the
principle laid down in Syed Qasim-Razvi v. The State
of Hyderabad and Others(') did not apply.
The point which-requires emphasis with regard to
these earlier decisions is this: they all dealt with the
operation of a discriminatory procedure under the
different provisions of the Act after the commencement
of the Constitution.
The position in the case under
our present consideration is that the settlement, the
order under s. 8-A(2) of the Act, and even the notice
of demand in pursuance of that order-all these took
(1) [1959) Supp. ' S.C R. 528.
(2) [1953) S.C.R. 589.
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I S.C.R. SUPREME COURT REPORTS
973
place before the coming into force of the Constitution,
and this vital distinction must be borne in mind in
considering the contentions urged by learned Counsel
Ranjit Singh
v.
Cominissioner of
for the petitioner.
The main contention is that the proceedings taken
Income-tax,
against the petitioner in pursuance of the order under
u. P.
s. 8-A(2) are violative of the guarantee of equal protccf
h C
.
.
S. J{. Das ].
tion of the laws under Art. 14 o t e onstitut10n.
There are, however, two subsidiary contentions which
do not directly raise any question of the violation of
a fundamental right, and these may be disposed of
before we deal with the main contention.
In his petition the petitioner has stated t.hat ho
·. ="received the demand notice dated December 2, 1949
in or a.bout April, 1950, In the counter-affidavit of
the respondents it has been stated that the assessee ,
was informed of the demand early in December, 1949.
A copy of the order of the Central Government under
s. 8-A(2) of the Act dated November 21, 1949, was
sent to the pei;itioner; there is an endorsement in the
office copy of the demand notice dated December 2,
1949, that it was sent by registered post, acknowledgment due. Thereafter, the petitioner paid part of
the tax on different dates without raising any objection that he had not received the demand notice
before April, 1950. It was for the first time in April,
1959, some ten years after, that the petitioner asked
for a copy of the order under s. 8-A(2) and information as to the date when he had received the registered notice of demad. He also asked for an inspection of the file.
This was, however, refused.
Then,
the petitioner made the statement that he had received the demand notice in or about April, 1950. He
said that the statement was based on his knowledge;
he did not disclose the source of his knowledge nor
did he say how he remembered ten years after, without reference to any documents, that he had received
the demand notice in or about April, 1950. 1We are
unable to accop~ the statement as correct. On the
materials in the record it is clear that the proceedings
against the petitioner culminating in the service of
the notice of demand against him were all completed
974
SUPREME COURT REPORTS
[1962]
r96r
before the coming into force of the Constitution and
Ranjit Singh the petitioner cannot challenge those proceedings
v.
under Art. 14 of the Constitution; for it is well settled
Commissioner of that the Constitution is prospective and not retrosIncome-tax,
pective.
u. P.
On the construction of s. 8-A of the Act it has been
J
argued that after the order made by the Central
S. K. Das]. G overnment under sub-s. ( 2) thereof, a fresh assessment was necessary and as no such assessment was
,
made, all subsequent proceedings for recovery of the
tax are illegal. This is a point which has not been
specifically taken in the petition. That apart, we do
not think that there is any substance in this contention. We may here read s. 8-A, so far as it is relevant:
"S. 8-A. (1) Where any person concerned in any
case referred to or pending before the Commission
for investigation applies to the CommiRsion at any
time during such investigation to have the case or
any part thereof settled in so far as it relates to
him, the Commission shall, if it is of opinion- that
the terms of the settlement contained in the application may be approved, refer the matter to the
Central Government, and if the Central Government
accepts the terms of such settlement, the Commission shall have the terms thereof recorded and
thereupon the investigation, in so far as it relates
to matters covered by Sl.lch settlement, shall be
deemed to be closed.
(2) For the purpose of enforcing the terms of any
settlement arrived at in pursuance of sub-section (1),
the Central Government may direct that such proceedings as may be appropriate under the Indian
Income-tax Act, 1922 (XI of 1922), the Excess
Profits Tax Act, 1940 (XV of 1940) or any other
law may be taken against the person to whom the
settlement relates, and, in particular, the provisions
of the. second proviso to clause (a) of sub-section (5)
of section 23, section 24B, the proviso to sub-section (2) of section 25A, the proviso to sub-section
(2) of section 26 and sections 44 and 46 of the
Indian Income-tax Act, 1922 shall be applicable to
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975
the recovery of any sum specified in such settlement by the Income-tax Officer having jurisdiction
to assess the person by whom such sum is payable
as if it were income-tax or an arrear of income-tax
within the meaning of those provisions."
The scheme of s. 8-A is different from that of s. 8.
The latter section contemplates an assessment or re-
' assessment 'in accordance with the direction of the
Central Go~ernment; see sub-s. (4) ofs. 8. That is not
the position under s. 8-A, sub-s. (2) whereof provides
for the enforcement of the terms of any settlement
arrived at in pursuance of sub-s. (1).
There is no
doubt a reference to certain special provisions of the
Indian Income-tax Act, 1922, regarding assessment of
partners in a registered firm, tax payable by the
representative of a deceased person etc.; but the
reference to those provisions does not necessarily mean
that a fresh assessment must be made. They merely
show that these special provisions will be applicable
in appropriate cases. Sub-s. (2) ends by saying that
"ss. 44 and 46 of the Indian Income-tax Act, 1922,
shall be applicable to the recovery of any sum specified in such settlement by th<! Income-tax Officer
having jurisdiction to assess the person by whom such
sum is payable as if it were income-tax or an arrear of
income-tax within the meaning of these provisions."
This clearly shows that the true scope and effect of
the sub-section is to enforce the terms of any settlement ~rrived at in pursuance of sub-s. (1) and to
recover any sum specified in such settlement as if it
were income-tax or arrear of income-tax in accordance
;with the provisions of ss. 44 and 46 of the Indian
Income-tax Act, 1922. ·We are unable, therefore, to
accept the construction which learned Counsel for the
petitioner seeks to put on the sub-section.
This brings us to the main contention that the
petitioner has been. subjected to a discriminatory
procedure after the coming into force of the Constitution by reason of s. 8-A(2) of the Act. Learned
Counsel for the petitioner has put his argument in the
following way. He has submitted that what the
petitioner 'agreed to pay to Government was really a
Ranjit Singh
v.
Com~issioner of
Income~la:>r,
U. P.
S. I{. Das ].
976
SUPREME COURT REPORTS
[1962)
'96'
debt arising out of a contract viz., the settlement
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h between him and Government and the petitioner is
an;it
1ng
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v.
one amongst the larger c· ass of persons who are
commissioiit• of debtors of Government; against all other debtors
Income-tax,
Government have the ordinary remedy by way of
u. P.
suit but against the petitioner a special remedy is provided which is more drastic and envisages the imposis. 1" Das f.
tion of a penalty under s. 46 of the Indian Income-tax
Act, 1922, if the petitioner is in default in making a
payment of the amount due.
This, it is argued, is a
discriminatory iprocedure which has been continued
even after the coming into force of the Constitution.
We arc unable to accept this argument as correct.
First of all, the petitioner does not really belong to
the larger class of persons whom learned Counsel has
characterised as debtors of Government. The petitioner belongs to a special class who had evaded payment of Income-tax and had entered into a settlement
to pay the amount due as income-tax or arrear of
income-tax. For this class of persons the procedure
laid down in s. 8-A(2) is one and the same, and no
discrimination is made in favour of or against any
member of the same class.
The classification is a
reasonable classification having a just relation to the
object of the provision. For the recovery of the
amount due as income-tax or arrear of income-tax all
these persons are treated on the same footing. Neither
is there any discrimination between them and other
persons similarly placed in the matter of recovery of
income-tax or arrears of income-tax. Secondly, it is
open to the legislature to make a law as to how particular. Government dues should be realised and if the
law applies equally to all persons similarly situated,
no objection can be taken to such law on the ground
of discrimination. The truth of the matter is that
what the petitioner agreed to pay to Government is
really income-tax which should have been paid in
regard to the relevant assessment years but which had
escaped assessment and therefore the recovery is to be
made according to income-tax law. That is all that
s. 8-A(2) says. In the decisions of this Court to which
we had earlier adverted, what was held to be bad was
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1 S.C.R. SUPREME COURT REPOR'rS
977
the application of a discriminatory procedure after
the coming into force of the Constitution; even in
Basheshar Nath' s case (1) the Commission· a pp lied th\l
discriminatory procedure after the coming into force
of the Constitution and then submitted its report on
May 24, 1954, and the Cm_:itral Government accepted
the settlement on July 5, 1954. It was held tha.t the
settlement itself was vitiated by the discriminatory
procedure adopted by the Commission. That is not
the position here. In this case everything was concluded before January 26, 1950, when the Constitution came into force, including the issuance of a notice
of demand. All that remained to be done was the
recovery of the amount according to the notice of
demand. Therefore, the crucial question is-is the
recovery procedure discriminatory in any way, having
regard to the undoubted validity of the proceedings
which had been taken against the petitioner before
January 26, 1950?
We are unable to answer this
question in favour of the petitioner for the reasons
which we have already stated.
Learned Counsel for the petitioner relied on the
decision in M. L. M. Muthiah Ohettiar and Others v.
Commissioner of Income-tax, Madras('). The facts of
that case were entirely different and no question arose
there of considering the provisions of s. 8-A (2) of the
Act.
For these reasons we hold that there is no merit in
the petition which is, accordingly, dismissed with
costs.
(1) (1959] Supp. l S.C.R. 528,
1'3
Petition dismissed.
(2) [1959] 35 I. T.R. 339.
Ranjit Singh
v
Commissioner of
Income-tax,
u. I'.
S. K. Das].
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