Full Judgment Text
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PETITIONER:
PURSHOTTAM GOVINDJI HALAI
Vs.
RESPONDENT:
SHREE B. M. DESAI, ADDITIONAL COLLECTOR OF BOMBAY & OTHERS.
DATE OF JUDGMENT:
14/10/1955
BENCH:
DAS, SUDHI RANJAN
BENCH:
DAS, SUDHI RANJAN
BOSE, VIVIAN
JAGANNADHADAS, B.
IMAM, SYED JAFFER
AIYAR, N. CHANDRASEKHARA
CITATION:
1956 AIR 20 1955 SCR (2) 887
ACT:
Constitution of India, Arts. 13(1), 14, 21-Indian Income Tax
Act 1922 (Act XI of 1922), s. 46(2)-Whether offends Arts.
13(1), 14 & 21 of the Constitution-Bombay Land Revenue Act
1876 (Bombay Act II of 1876)-Whether offends Art. 14 of the
Constitution.
HEADNOTE:
The assesses carrying on business in the City of Bombay was
assessed to income-tax for the years 1943-44 to 1947-48 and
1951-52 by the Income-tax Officer C-1 Ward Bombay. As the
assessee did not pay the income-tax due the Income-tax
Officer issued in April 1951 to the Additional Collector of
Bombay a recovery certificate under s. 46(2) of the Indian
Income-tax Act, 1922. In February 1954 the Additional
Collector issued a notice of demand and as no payment was
made he attached the good will and tenancy rights of the
assessee’s premises by a warrant of attachment dated 24th
March 1954,
888
A sale was held in February 1955. The sale proceeds not
being sufficient to satisfy the assessed tax the Additional
Collector issued a notice under s. 13 of the Bombay City
Land Revenue Act, 1876 requiring the assessee to appear
before him and show cause why he should not be apprehended
and confined to civil prison in satisfaction of the said
certified demand. In default of assessee’s appearance and
showing cause a warrant for his arrest was issued under s.
13 of the Bombay Act, II of 1876 and he was actually
arrested on 1st July 1955. An application to the Bombay
High Court under Art. 226 of the Constitution for a writ in
the nature of a writ of habeas corpus having proved
unsuccessful, an application under Art. 32 was filed in the
Supreme Court for the same relief. Two main points urged on
behalf of the assessee were:
(a) that s. 46(2) of the Indian Income-tax Act under which
the Income-tax Officer issued the recovery certificate to
the Additional Collector of Bombay was void, under Art. 13
(1) of the Constitution in that it offended Art. 21 and Art.
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14 of the Constitution;
(b)that s. 13 of the Bombay Land Revenue Act, 1876 (Bombay
Act II of 1876) under which the warrant of arrest was issued
by the Additional Collector was void under Art. 13(1) of the
Constitution as the same was repugnant to Art. 14 of the
Constitution.
Held (as regards a) (1) that there was no violation of
fundamental rights under Art. 21 of the Constitution
inasmuch as s. 13 of the Bombay Act II of 1876 under which
warrant of arrest was issued for the recovery of the demand
certified under s. 46(2) of the Indian Income-tax Act
constituted a procedure established by law. Both s. 13 of
Bombay Act II of 1876 and s. 46 of the Indian Income-tax Act
under which action had been taken against the assessee were
not void and therefore no question of violation of funda-
mental rights under Art. 21 could arise at all)
(ii)the contention that s. 46(2) of the Indian Income-tax
Act provides for two different and alternative methods of
recovery of the dues and clothes the Collector with the
unfettered and unguided power to apply either of the two
methods inasmuch as it enables the Collector at his will to
discriminate between two defaulters who are similarly
situated and thus violates the equal protection clause of
the Constitution was without force because sub-section (2)
of s. 46 does not prescribe two different procedures. The
proviso enacted therein does not indicate a different and
alternative mode of recovery of the certified amount of tax
but only confers additional powers on the Collector for the
better and more effective application of the only mode of
recovery authorised by the body of sub-section (2) of s. 46
and therefore there was no question of possibility of dis-
crimination at all;
(iii)the further contention that s. 46(2) of the Indian
Incometax Act violates the equal protection clause of the
Constitution and has thus become void under Art. 14 of the
Constitution as s. 46(2) required the Collector,on receipt
of the requisite certificate from
889
the Income-tax Officer, to recover the amount specified in
the certificate as if it were an arrear of the land revenue
and there are different laws adopted by different States for
the recovery of land revenues and thus there is
discrimination on the ground that defaulters are treated
differently in different States is also without force be-
cause discrimination complained of is a permissible
classification and does not offend the fundamental right
guaranteed by Art. 14 as the grouping of the income-tax
defaulters in separate categories on classes State-wise is a
territorial classification which is based on an intelligible
differentia and there is a reasonable nexus or co-relation
between the basis of classification and the object sought to
be achieved by the Income-tax Act. The fact that the
income-tax demand is a Union public demand makes no
difference in the legal position.
Held, (as regards b) that the contention that s. 13 of the
Bombay Act II of 1876 became unconstitutional under Art.
13(1) of the Constitution in that the procedure prescribed
by s. 13 of the Bombay Act II of 1876 in respect of a
defaulter residing in the City of Bombay was harsher and
more drastic than the procedure laid down in s. 157 of the
Bombay Act V of 1879 in respect of a defaulter residing
outside the City of Bombay was without force because s. 13
of the Bombay Act II of 1876 was amended on 8th October 1954
and a new law laid down a law similar to the law laid down
by s. 157 of the Bombay Act V of 1879 and thus the vice of
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unconstitutionality ’if any’ was removed.
State of Punjab v. Ajaib Singh & Another ([1953] S.C.R.
254), Shaik Ali Ahmed v. Collector of Bombay (I.L.R. 1950
Bom. 150), Chiranjit Lal Chowdhury v. The Union of India
([1950] S.C.R. 869), Budhan Choudhry and others v. The State
of Bihar ([1955] 1 S.C.R. 1045), Middleton v. Texas Power
and Light Company (249 U. S.,152), Bowman v. Lewis (101 U.S.
22; 25 L.Ed. 689), The State of Rajasthan v. Rao Manohar
Singhji ([1954] S.C.R. 996), Bhikaji Narayan Dhakras v. The
State of Madhya Pradesh, Nagpur and Another ([1965] 2 S.C.R.
589) and Erimmal Ebrahim Hajee v. The Collector of Malabar
([1954] 26 I.T.R. 509), referred to.
JUDGMENT:
ORIGINAL JURISDICTION: Petition No. 270 of 1955.
Under Article 32 of the Constitution of India for a Writ in
the nature of Habeas Corpus.
Hemendra Shah, J. B. Dadachanji and Rajinder Narain, for the
petitioner.
M. C. Setalvad, Attorney-General of India, C. K. Daphtary,
Solicitor-General of India, (B. Sen and R. H. Dhebar, with
them) for the respondent No. 1.
890
1955 October 14.
DAS ACTG. C. J.-This rule was issued on a petition filed
under article 32 of the Constitution by one Purshottam
Govindji Halai, a citizen of India, calling upon the
respondents to show cause why a writ in the nature of a writ
of habeas corpus should not be issued by this Court
directing the Superintendent, House of Correction, Byculla,
being the second respondent herein., to produce before this
Court one Govindji Deoji Halai, the father of the
petitioner, who is also a citizen of India., for the purpose
of being released forthwith.
The facts which are not in dispute may be shortly stated as
follows. The said Govindji Deoji Halai (hereinafter
referred to as the "assessee") is the sole proprietor of a
business carried on under the name and style of Indestro
Sales and Service Co. at No. 50-52, Lohar Chawl Street in
the City of Bombay. Two private limited companies, namely,
Indestro India Ltd., and Indestro Eastern Ltd., also carry
on business and have their respective offices in the same
premises. The assessee is said to have some connection with
the two companies the nature of which, however, is not quite
clear on the record before us. In respect of his own
business of Indestro Sales and Service Co., the assessee was
assessed to income-tax for the years 1943-44 to 1947-1948
and 1951-1952 by the Third Income-tax Officer, C-1 Ward,
Bombay, at and for Rs. 40,178-4-0. The assessee not having
paid up the assessed amount of tax the Income-tax Officer on
the 10th April 1951 issued to the’ Additional Collector of
Bombay, the first respondent herein, a recovery certificate
,under section 46(2) of the Income-tax Act. It may here be
mentioned that the Indestro Eastern, Ltd., was also assessed
to income-tax at and for Rs. 1,92,000 and a recovery
certificate was also issued by the Income-tax Officer to the
Additional Collector of Bombay.
On the 1st February, 1954 the Additional Collector issued a
notice of demand on the assessee for payment of the assessed
amount of tax. No payment
891
having been made, the Additional Collector attached the
goodwill and tenancy rights in the said premises by a
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warrant of attachment issued on the 24th March 1954. The
sale proclamation was issued on the 15th January 1955. The
sale was held on the 25th February 1955 fetching a price of
Rs. 33,000 and it was confirmed on the 30th March 1955. The
sale proceeds not being sufficient to satisfy the assessed
tax the Additional Collector on the 7th June 1955 issued a
notice under section 13 of the Bombay City Land Revenue Act,
1876, requiring the assessee to appear before him in person
on the 16th June 1955 and show cause why he, the assessee,
should not be apprehended and confined to civil jail in
satisfaction of the said certified demand. The assessee did
not appear in person on the appointed day but on the next
day, the 17th June 1955, an Advocate acting on behalf of the
assessee wrote a letter to the Additional Collector
purporting to show cause why the assessee should not be
arrested and sent to the civil jail. The contentions put
forward on behalf of the assessee not being considered
satisfactory the Additional Collector on the 30th June 1955
issued a warrant for the arrest of the assessee under
section 13 of the Bombay City Land Revenue Act, 1876. The
assessee was actually arrested on the 1st July 1955.
On the 8th July 1955 an application was made by the present
petitioner to the Bombay High Court under article 226
complaining of the arrest of his father, the assessee, and
praying for a writ in the nature of a writ of habeas corpus
for the production and release of the assessee. A rule was
issued by the High Court but eventually on the 24th August
1955 the High Court (Chagla, C.J. and Desai, J.) discharged
the rule. No application was made to the High Court for
leave to appeal to this Court from the decision of that High
Court but on the 2nd September 1955 the present petition was
filed in this Court under article 32 of the Constitution for
the relief hereinbefore mentioned. On the 7th September
1955 a rule was issued by this Court on that petition
subject to the question of its maintainability in view of
the dismissal by the
113
892
High Court of the petition under article 226 from which no
leave to appeal to this Court had been sought or obtained.
The rule has now come up before us for hearing. In the view
we have taken about the merits of the petition it is not
necessary for us to consider the question of its
maintainability after the dismissal of the petition under
article 226 or to make any pronouncement, on this occasion,
on the scope and ambit of article 32 of the Constitution in
that situation.
The principal contentions urged by the learned Advocate
appearing for the petitioner are as follows, namely,-
(a) that section 46(2) of the Indian Income-tax Act under
which the Income-tax Officer issued the recovery certificate
to the Additional Collector of Bombay is void under article
13(1) of the Constitution in that the same offends article
22(1) and (2), article 21 and article 14 of the
Constitution;
(b) that section 13 of the Bombay City Land Revenue Act,
1876 under which the warrant of arrest was issued by the
Additional Collector is void under article 13 (1) of the
Constitution as the same is repugnant to article 14 of the
Constitution.
We proceed to deal with the objections seriatim. Re. (a):
Section 46(2) of the Indian Income-tax Act which is impugned
before us runs as follows:---
"46. (1).........................................
(2) The Income-tax Officer may forward to the Collector a
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certificate under his signature specifying the amount of
arrears due from an assessee, and the Collector, on receipt
of such certificate, shall proceed to recover from such
assessee the amount specified therein as if it were an
arrear of land revenue:
Provided that without prejudice to any other powers of the
Collector in this behalf, he shall for the purpose of
recovering the said amount have the powers which under the
Code of Civil Procedure, 1908 (Act V of 1908), a Civil Court
has for the purpose of the recovery of an amount due under a
decree.
The first objection to the above sub-section is that it
893
contravenes the fundamental rights guaranteed by clauses (1)
and (2) of article 22. In view of the decision of this
Court in the State of Punjab v. Ajaib Singh & Another(1)
this objection has not been pressed before us and we need
say no more about it.
The second objection to section 46(2) of the Indian Income-
tax Act is that it is violative of article 21. Article 21
guarantees that no person shall be deprived of his personal
liberty except in accordance with procedure established by
law. In this case the assessee has been arrested and is
being detained in jail in execution of a warrant of arrest
issued under section 13 of the Bombay City Land Revenue Act,
1876 for the recovery of the demand certified under section
46(2) of the Indian Income-tax Act. As long as those sec-
tions stand no complaint can be made of infringement of
article 21, for those two sections constitute a procedure
established by law. It is only if those sections are void
that the question of violation of the fundamental right
under article 21 can arise at all. We have, therefore, to
pass on to the third objection to section 46(2) founded on
article 14 of the Constitution which alone has been
strenuously insisted on before us by learned counsel for the
petitioner.
Article 14 is invoked in two ways. It is pointed out that
the first part of section 46(2) provides that the Collector,
on receipt of a certificate from the Income-tax Officer,
shall proceed to recover from the defaulting assessee the
amount specified therein as if it were an arrear of land
revenue. It is next said that the proviso to the sub-
section invests the Collector with all the powers a Civil
Court has under the Code of Civil Procedure for the purpose
of the recovery of the amount due under a decree. It is
submitted that section 46(2) provides for two different and
alternative methods of recovery of the dues and clothes the
Collector with the power to apply either of the two methods,
that is to say, he may issue a warrant of arrest under
section 13 of the Bombay City Land Revenue Act, 1876 against
one defaulter and keep him in detention for a period which
may
(1) [1953] S.C.R. 254.
894
work out to be much longer than six months and he may
proceed against another defaulter under the Code of Civil
Procedure and arrest and detain him for the maximum period
of six months. The powers that are thus conferred on the
Collector by section 46(2) are unfettered and unguided and
enable the Collector, at his will, to discriminate between
two defaulters who are similarly situated and thereby
violate the behests of the equal protection clause of the
Constitution. This argument appears to us to be founded on
a misapprehension about the true meaning of section 46(2).
On a proper reading, that subsection does not prescribe two
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alternative modes of procedure at all. All that the sub-
section directs the Collector to do is to proceed to recover
the certified amount as if it were an arrear of land
revenue, that is to say, he is to adopt the procedure
prescribed by the appropriate law of his State for the
recovery of land revenue and that in thus proceeding he is,
under the proviso, to have all the powers a Civil Court has
under the Code. The sub-section does not prescribe two
separate procedures. The statement to the contrary in the
judgment of the Bombay High Court in Shaik Ali Ahmed v.
Collector of Bombay(1) does not appear to us to be correct.
In our opinion the proviso does not indicate a different and
alternative mode of recovery of the certified amount of tax
but only confers additional powers on the Collector for the
better and more effective application of the only mode of
recovery authorised by the body of sub-section (2) of
section 46. Viewed in this light, there is no question of
the possibility of any discrimination at all. This part of
the argument cannot, therefore, be accepted.
The other way in which the protection of article 14 is
invoked is founded on a comparison of the provisions of the
different laws adopted by the different States for the
recovery of land revenue. Section46(2) of the Indian
Income-tax Act requires the Collector, on receipt of the
requisite certificate from the Incometax Officer, to proceed
to recover from the assessee the amount specified in the
certificate as if it were an
(1) I.L.R. [1950] Bom. 150, 155.
895
arrear of land revenue. This means that the Collector must
take such proceedings as he would have done if he were
engaged in recovering land revenue. Thus a Collector in the
City of Bombay in recovering the certified amount of income-
tax must proceed under Ejection 13 of the Bombay City Land
Revenue Act, 1876 (Bombay Act II of 1876) and arrest and
detain him far the period therein mentioned which, prior to
the 8th October 1954, might have worked out to a period much
longer than six months. On the other hand, the defaulting
assessee in all other parts of the State of Bombay has to be
proceeded against under section 157 of the Bombay Land
Revenue Code, 1879 (Bombay Act V of 1879) under which he
cannot be detained for more than the period limited by the
Code of Civil Procedure for the detention of a judgment-
debtor in execution of a decree for an equal amount of
money. So, even in one State there were two procedures to
which defaulting assessees could be subjected according as
they were in or outside the City of Bombay. A Collector in
the State of Madras in recovering the certified amount of
income-tax has to proceed under section 48 of the Madras
Revenue Recovery Act, 1864 (Madras Act II of 1864). When
the Collector finds that the certified amount cannot be
liquidated by the sale of the property of the defaulting
assessee and the Collector has reason to believe that the
defaulter is wilfully withholding payment or has been guilty
of fraudulent conduct in order to evade payment, the
Collector may, under section 48 of that Act, cause the
arrest and imprisonment of the defaulter, not being a
female. But that section goes on to say that no person
shall be imprisoned for a longer period than two years or
for a longer period than six months if the arrear does not
exceed Rs. 500 or for a longer period than three months if
the arrear does not exceed Rs. 50. A Collector in West
Bengal proceeding to recover the certified amount under the
Bengal Public Demands Recovery Act, 1913 (Bengal Act III of
1913) cannot, under section 31 of that Act, direct the
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detention of the defaulting assessee in prison for more than
six months if the amount is more
896
than Rs. 50 or in other cases for more than six weeks. The
defaulter in the Punjab cannot, under section 69 of the
Punjab Land Revenue Act, 1887 (Punjab Act XXVII of 1887), be
kept in civil jail for more than one month. Section 148 of
the U. P. Land Revenue Act) 1901 (U.P. Act III of 1901)
limits the period of detention to 15 days and also exempts
many persons, e.g. Talukdars and women, from any
imprisonment. The Assam Land and Revenue Regulation, 1886
(Reg. I of 1886) does not insist on imprisonment at all. A
cursory perusal of the provisions of the different Acts
referred to above will at once show that in the matter of
recovery of arrears of land revenue the different States
have prescribed different machinery, some obviously harsher
than others. The argument is that income-tax being a
subject with respect to which the Union alone may make law
and the recovery of it being the Union responsibility, the
machinery for the recovery of income-tax should be framed on
a uniform all-India basis, for to the Union all defaulters
who may not pay up the Union demand are similarly situated;
but the Indian Income-tax Act by section 46(2) authorises
the Collectors in different States to adopt machinery which
differs from State to State, so that defaulters are treated
differently in different States. The contention is that
section 46(2) which sanctions such discrimination is clearly
violative of the equal protection clause of the Constitution
and has, therefore, become void under article 13 (1).
The learned Attorney-General appearing for the respondents
seeks to meet the aforesaid argument in two ways. In the
first place, he urges that the impugned sub-section does not
by itself make any discrimination. All that it says is that
the certified amount of income-tax is to be recovered as if
it were an arrear of land revenue and there its operation
ends. In recovering the certified demand the Collector has
to have recourse to the machinery available to him for
enforcing a demand for arrears of land revenue but the
provisions of the State laws which prescribe that machinery
are not incorporated in section 46(2).
897
If the State laws are discriminatory that vice cannot be
imputed to section 46(2).
There is good deal to be said on either side. The State
laws prescribe the procedure for the recovery of arrears of
land revenue only and they are not, in terms and by
themselves, concerned at all with the recovery of income-tax
demand.That machinery is made available for the purpose
of recovery of income-tax by virtue only of section46(2)
of the Indian Income-tax Act. In the matter of recovery
of income-tax the Collectors adopt theprocedure laid down
by the State laws, not because the State laws enjoin them to
do so but because section 46(2) directs them to do so. In
other words, it is section 46(2) which tells the Collectors
of Madras to follow the procedure under section 48 of the
Madras Revenue Recovery Act, 1864 as if those provisions are
set out in the Indian Income-tax Act in extenso and it tells
the Collectors of all other States to adopt the procedure
prescribed by their own State laws as if the provisions
prescribing that procedure were set out in that section. In
such a situation it is a plausible argument to say that all
the provisions of all the State laws are, mutatis mutandis,
to be read into section 46 (2) and that, therefore, if there
be any vice of discrimination in the State laws that vice
cannot but be regarded as having crept into section 46(2).
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On the other hand, to hold that all the provisions of all
the State laws for recovery of arrears of land revenue have
been referentially incorporated in section 46(2) of the
Indian Income-tax Act will lead us into difficulties. Will
the subsequent amendments of the State laws be also
incorporated in section 46(2)? Section 46(2) of the Indian
Income-tax Act having incorporated the State laws as they
then stood, how can any State Legislature which has no power
to make any law with respect to income-tax alter or amend
section 46(2)? Are the State laws as incorporated in
section 46(2) at the time it was enacted to be treated as
crystallised and to be applied by the Collectors, although
the State laws for the recovery of arrears of land revenue
may be materially altered by sub-
898
sequent amendment? These are some of the questions which
will have to be answered before we can come to a decision on
this point. In the view we take of the second part of the
learned AttorneyGeneral’s argument to which we shall
presently refer it is not necessary for us to express any
opinion on this part of his argument.
The learned Attorney-General then argues that assuming that
section 46(2) by incorporating the different State laws
which are not uniform has become discriminatory such
discrimination is permissible and does not offend the
fundamental right guaranteed by article 14. This argument
appears to us to be well ,founded.
The meaning, scope and effect of the article in question
have been explained by this Court in a series of decisions
beginning with that in Chiranjit Lal Chowdhury v. The Union
of India(1) and ending with that in Budhan Chowdhury and
others v. The State of Bihar(1). The following passage in
the unanimous judgment of the Full Court in the last
mentioned case at p. 1049 briefly summarises the true
intendment of the constitutional provision:-
"................................... 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, (i) 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 (ii) that 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
(1) [1950) S.C.R. 869.
(2) [1955] 1 S.C.R. 1045.
899
that article 14 condemns discrimination not only by a
substantive law but also by a law of procedure".
The respective contentions now put forward as to the
validity or otherwise of section 46(2) of the Indian Income-
tax Act have to be judged in the light of the principles so
laid down by the Full Court.
The Indian Income-tax Act imposes a liability on persons who
are amenable to it to pay the tax assessed against them.
The assessed amount is a public demand of the Union and has
to be recovered, if not voluntarily paid up. The assessees
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are scattered all over the Union and machinery has to be
devised for that purpose. On looking round the Union finds
that there is machinery in every State for recovery of land
revenues which are State demands. Each State in its wisdom
has devised a machinery which it has considered appropriate
and suitable for the recovery of its own public demand. As
was said by the Supreme Court of America in Middleton v.
Texas Power and Light Company(1)-
"There is a strong presumption that a legislature
understands and correctly appreciates the needs of its own
people, that its laws are directed to problems made manifest
by experience and that its discriminations are based upon
adequate grounds".
It is conceded that each State is well within its rights to
devise its own machinery for the recovery of its own public
demand and that no person belonging to one State can
complain that the law of his State is more rigorous than
that of the neighbouring state. The reason is obvious, for
the people of one State are not similarly situated as people
of another State. Their needs, as understood by their own
Legislature, are different from those of the people of other
States. If in the matter of recovery of arrears of land
revenue defaulters of one State cannot complain of denial of
equal protection of the laws on the ground of the difference
in the modes of recovery prevailing in other States, can it
be said to be unreasonable for the Union to adopt, for the
recovery of its public demand from defaulters of each State,
the same mode of recovery
(1) 249 U.S. 152, 157.
114
900
of public demand prevailing in that State? Here the
defaulters are classified on a territorial, or geographical
basis and this basis of classification has precisely the
same correlation to the object of the Indian Income-tax Act
as it has to the object of the different Public Demands
Recovery Acts. The objects of the two Acts in this behalf
are in pari materia and the same considerations must apply
to both. People of each State are familiar with and used to
the coercive processes which each State finds it necessary
to impose on its own people for the recovery of public
demand and there can be no hardship and consequently no
objection to their being put to the same processes for the
recovery of the public demand of the Union. The grouping of
the income-tax defaulters into separate categories or
classes Statewise is certainly a territorial classification
which is based on an intelligible differentia and the
subjection, for the purposes of the recovery of the
certified demand, of each of such classes of defaulters to
the same coercive process devised by their own State, on a
consideration of local needs, for the recovery of their own
public demands, cannot be regarded as bereft of a reasonable
nexus or correlation between the basis of classification and
the object sought to be achieved by the Indian Income-tax
Act any more than it can be so regarded with respect to the
respective State laws. The fact that the income-tax demand
is a Union public demand appears to us to make no difference
in the legal position.
The Indian Income-tax Act classifies people into various
groups for the purpose of imposing the tax and taxes them
differently, e.g., insurance companies which are taxed
differently from an ordinary business concern and in some
cases exempts them altogether, e.g., agriculturists and
persons with income below a certain level. There can, on
the same principle, be no objection to people of a backward
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area who may be in need of aid in the shape of tax remission
to be exempted from ’taxation either wholly or in part. If
this is right when a question of imposition is concerned, it
cannot be wrong when the matter is one of recovery. The two
together make up the full measure of the
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burden and if it is permissible to vary the burden at one
end it must be equally valid to vary it at the other for the
same or similar reasons.
It is said that the income-tax demand being a Union demand
there should be uniformity in the punishment to be, meted
out to defaulters and it can be done easily by suitably
amending section 46(2) so as to provide for the detention of
all defaulters for the same period in all cases in all
States. In the first place, it is a fallacy to regard
arrest and detention. of a defaulter who fails to pay
income-tax as a punishment or penalty for an offence. It is
a coercive process for recovery of public demand by putting
pressure on the defaulter. The defaulter can get himself
released by paying up the dues. In the next place, the
Court is only concerned to interpret the law and, if it is
valid, to apply the law as it finds it and not to enter upon
a discussion as to what the law should be. The whole
problem before us is whether the apparent discrimination can
be supported on the basis of a permissible classification.
The case of Bowman v. Lewis(1) is in point. We do not,
however, find it necessary to express any opinion on the
extreme contention urged by the learned Attorney-General, on
the authority of that decision, that a mere territorial
classification, by itself and without anything else, is
enough to place the law beyond the operation of the equal
protection clause. Indeed, in that very case it was
recognised that it was not impossible that a distinct
territorial establishment and jurisdiction might be intended
as or might have the effect of discrimination against a
particular race or class where such race or class should
happen to be the principal occupants of the disfavoured
area. For the purposes of this case it will suffice to say
that the discrimination complained of is not
unconstitutional for the simple reason that the impugned law
is based on a territorial classification having a reasonable
nexus or correlation between that basis of classification
and the object sought to be achieved by the Act. Our
decision in The State of Rajasthan v. Rao Manohar Singhji(2)
which is relied on by learned counsel for the petitioner is
easily
(1) 101 U.S. 22; 25 L. Ed. 989.
(2) [1954] S.C.R. 996.
902
distinguishable on facts for, the law impugned in that case
for the first time imposed certain disabilities on Jagirdars
of a certain area of the State and there was no evidence
that those Jagirdars were in any way different from the
Jagirdars of the other areas of the State. In the present
case the classification has been made Statewise and it is
clear that in the matter of payment of public demands of the
States the people of different States are not similarly
situated and their own States have imposed on them such
coercive processes as the circumstances and needs of each
State require. The law impugned before us has only adopted,
for its own purpose, the same coercive process which was
devised by the States for their own purposes which are
closely akin or similar to the purpose of the Union. The
same or similar considerations apply to both cases. There
is the same or similar correlation between the basis of
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classification and the object sought to be achieved by the
Indian Incometax Act. To deny this power to the Union on
constitutional grounds urged before us will lead us to hold
that no new offence created by law can be made triable
according to the procedure laid down in the Code of Criminal
Procedure, for that Code sanctions different modes of trial
in different areas, namely, by a Section 30 Magistrate in
some areas, by the Sessions Judge with assessors in certain
areas and by the Sessions Judge with jurors in other areas.
Adoption of an existing machinery devised for a particular
purpose cannot, if there be no vice of unconstitutionality
in the machinery render it unconstitutional if it is made to
subserve a purpose closely akin or similar to the purpose
for which it bad been devised. The first objection
formulated by learned counsel for the petitioner must,
therefore, be rejected.
Re. (b).-As already stated under section 46 (2), the
Collector, on receipt of the certificate from the Income-tax
Officer, has to proceed to recover the certified demand as
if it were an arrear of land revenue. This means that the
Collector of a particular place has to take steps as
indicated in the State law relating to the recovery of
arrears of land revenue. As already stated, in the State of
Bombay there are two
903
statutes regulating the procedure for the recovery of
arrears of land revenue according as the defaulter resides
in the City of Bombay or in any other area within the State
of Bombay. Section 13 of the Bombay City Land Revenue Act,
1876 applies to the City of Bombay and section 157 of the
Bombay Land Revenue Code, 1879 applies to the rest of the
State. Prior to the 8th October 1954 the portion of section
13 of the Bombay City Land Revenue Act, 1876 which is
relevant for our present purpose was as follows:
"If the sale of the defaulter’s property shall not produce
satisfaction of the demand, it shall be lawful for the
Collector to cause him to be apprehended and confined in the
civil jail under the rules in force at the Presidency for
the confinement of debtors, for which purpose a certificate
of demand under the Collector’s signature sent with the
defaulter shall be the sheriff’s sufficient warrant, equally
with the usual legal process in ordinary cases of arrest in
execution of judgment for debt:
Provided, however, that such imprisonment shall cease at any
time upon payment of the sum due, and that it shall in no
case exceed one day for each rupee of the said sum".
Section 157 of the Bombay Land Revenue Code, 1879 which
provides for the arrest and detention of the defaulter
residing outside the City of Bombay Contains the following
proviso:-
"Provided that no defaulter shall be detained in
imprisonment for a longer period than the time limited by
law in the case of the execution of a decree of a Civil-
Court for a debt equal in amount to the arrear of revenue
due by such defaulter".
A cursory perusal of the two sections will show at once that
the procedure prescribed by section 13 of the Bombay City
Land Revenue Act, 1876 for the recovery of arrears of land
revenue was harsher and more drastic than the procedure laid
down in section 157 of the Bombay Land Revenue Code, 1879 in
that a defaulter residing in the City of Bombay could be
kept in detention for a day for every rupee of the arrears
which might considerably exceed the maximum period of six
months which is the period
904
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limited by the Code of Civil Procedure for the detention of
a judgment-debtor in civil jail. The argument is that on
the advent of the Constitution section 13 of the Bombay City
Land Revenue Act, 1876 became void under article 13(1) in
that it denied to the Bombay defaulter equality before the
law in comparison with the defaulter outside the City of
Bombay, for he could be detained for a longer period of
time. In the view we have taken, it is not necessary to
express any opinion whether the discrimination brought about
by the two sections was supportable on the ground of a
reasonable classification based on territorial
considerations so as not to offend the constitutional
inhibition. Assuming, then, but not deciding, that section
13 of the Bombay City Land Revenue Act, 1876 became
inconsistent with the fundamental right guaranteed by
article 14 and, therefore, became void to the extent of such
inconsistency, it was not, as recently explained by this
Court in Bhikaji Narayan Dhakras v. The State of Madhya
Pradesh, Nagpur and Another(1), obliterated from the statute
book for all times or for all purposes or for all people.
The effect of article 13(1) is that the law could not stand
in the way of the enjoyment of fundamental rights. The law
was not dead. Further, the law was amended on the 8th
October, 1954 when the proviso to section 13 quoted above
was replaced by the following proviso:-
"Provided that such imprisonment shall cease at any time
upon payment of the sum due and that it
shall in no case exceed-
(i) A period of six months when the sum due is more than
Rs. 50; and
(ii)A period of six weeks in any other case."
This amendment is nothing less than an enactment of a new
provision. It lays down a new law which is similar to the
law laid down by section 157 of the Bombay Land Revenue
Code, 1879. Therefore, the disparity that prevailed between
the original proviso to section 13 of the Bombay City Land
Revenue Act, 1876 and the proviso to section 157 of the
Bombay Land Revenue Code,, 1879 is now removed, The
(1) [1955] 2 S.C.R. 589.
905
disparity between the two provisions as they originally
stood being thus eliminated, the vice of unconstitutionality
is also removed and section 13 of the Bombay City Land
Revenue Act, 1876, as it now stands, cannot be assailed as
repugnant to article 14 of the Constitution.
It was faintly suggested that as the assessment proceedings
had been started and the certificate had been issued by the
Income-tax Officer to the Additional Collector of Bombay and
the Additional Collector issued a notice of demand and
actually attached the properties prior to the amendment, the
assessee must be governed by section 13 as it originally
stood and not by it as subsequently amended. We do not
think there is any substance in this contention. It is true
that the warrant of attachment of the property was issued on
the 24th March 1954 but the sale proclamation was issued and
the sale was actually held after the date of amendment. The
defaulting assessee might have paid up the dues in which
case there would have been no occasion for sale. It is,
therefore, his default that occasioned the sale. Again, the
sale proceeds might have been sufficient to cover the
certified demand,, in which case there would have been no
occasion for the issue of warrant for his arrest. It is
only after the sale proceeds were found to be insufficient
to satisfy the assessed amount and the assessee failed to
pay up the balance that the question of the arrest of the
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defaulter arose. By that time section 13 had been amended
and the warrant of arrest was issued on the 7th June 1955,
that is to say, long after the amendment of the section. In
our opinion, the second ground urged by the learned counsel
must also be negatived.
We may mention that our attention was drawn to the decision
of the Madras High Court in Erimmal Ebrahim Hajee, v. The
Collector of Malabar(1) but learned counsel could not rely
upon it as an authority as it was itself under appeal before
this Court.
The result, therefore., is that this application must be
dismissed.
(1) [1954] 26 I.T.R. 509.
906
CHANDRASEKHARA AIYAR J. I agree rather reluctantly. The
reluctance is not because there is anything in the reasoning
of the judgment pronounced just now by my Lord which does
not appear to be sound but because I am not happy about the
result.
We have to face and accept wholly different consequences for
non-payment of income-tax according as the assessee belongs
to one State or another. The nature of the tax is one and
the same, and it is levied under a single Central Act, and
yet the ultimate coercive processes for recovery differ in
nature and extent between State and State. We have to
attribute to the legislature a rational classification based
on geographical areas, the susceptibilities of people in
those areas, and their reactions to the adoption of methods
of recovery. For arrest and detention, wilful default or
fraudulent conduct is required in Madras. In Assam, there
can be no imprisonment at all. The periods of detention
vary between Bengal, U.P. and the Punjab. Taluqdars in U.P.
are completely exempt. Are we to assume that people in
Madras are more amenable and generally ready and willing to
pay as compared with those in Bombay who are a tenacious lot
and must be subjected to a longer process of detentive
coercion? Are the Talaqdars in U.P. exempt from arrest
because of possible political repercussions if such
influential persons are subjected to such treatment? What
is the rationale in providing different periods of detention
for Bengal and the Punjab?
We must be in a position to postulate some reasonable basis
for the differentiation and we cannot get away from this
necessity by vague references’ to the wisdom of the
legislature or by indulging in pure speculation as to what
might have been at the back of its mind. Speaking broadly,
for the enforcement of the levy of a central tax like the
Income-tax- there should be uniformity of procedure and
identity of consequences from non-payment. The machinery
for recovery might be different between the several States
but the defaulting assessees must be put on the same footing
as regards the penalties.
But the law as it now stands can be supported on the grounds
mentioned by my Lord and I do not propose to differ.
907