Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6
PETITIONER:
TIWARI KANAHAIYALAL ETC.
Vs.
RESPONDENT:
THE COMMISSIONER OF INCOME TAX, DELHI
DATE OF JUDGMENT13/03/1975
BENCH:
UNTWALIA, N.L.
BENCH:
UNTWALIA, N.L.
ALAGIRISWAMI, A.
CITATION:
1975 AIR 902 1975 SCR (3) 927
1975 SCC (4) 401
ACT:
Income-tax Act (11 of 1922), ss. 28 and 52, Income-tax Act
(43 of 1961), ss. 271, 277 and 297 and General Clauses Act
(10 of 1897) s. 6 (c)--False declaration filed by assessee
under 1922 Act--Penalty imposed under 1961 Act--Prosecution
for false declaration under s. 52 of 1922 Act--If valid.
HEADNOTE:
Section 297(2)(f) of the Indian Income-tax Act, 1961,
provides that notwithstanding the repeat of the Income-tax
Act, 1922, any proceeding for the imposition of a penalty in
respect of any assessment completed before April 1, 1962,
may be initiated as if the 1961 Act had not been passed; and
Clause (g) provides that any proceeding for the imposition
of a penalty in respect of any assessment for the year
ending March 31, 1962, or any earlier year, which was
completed on or after April 11. 1962 may be initiated under
the 1961 Act. Section 28(4) of the 1922 Act provides that
no prosecution for an offence against the 1922 Act shall be
instituted in respect of the same facts on which a penalty
has been imposed Linder the section.
The appellant, filed returns under s. 22(2), Income-tax Act,
1922, the last of the returns being for the assessment year
1959-60. In 1964, he filed revised returns for the same
assessment years showing a larger income. The income-tax
was assessed under the 1961 Act on the revised returns and
penalty proceedings were instituted and penalty was levied
under s. 271 of the 1961 Act. The respondent, thereafter,
filed complaints for offences under s. 277 of the 1961 Act.
By way of abundant caution he also filed complaints on the
same facts for offences under s. 52 of the [922 Act. The
trial court held that the launching of prosecution was
’illegal in view of s. 28(4) of the 1922-Act and Art. 20(1)
of the Constitution. The High Court, in appeal, held that
since no penalty was imposed under s. 28 of the 1922 Act, s.
28 (4) was not a bar to the institution of prosecution not
was it hit by Art. 20(1), and directed the trial court to
proceed with the trial.
Dismissing the appeal to this Court,
HELD : (1) All the assessments although they related to the
years earlier than the year ending on March 31, 1962, and
were completed after the coming into force of the 1961-Act.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6
(April, 1962). Hence the proceeding for the imposition of
penalty had to be and was initiated under the 1961 Act under
s. 297(g). Therefore, s. 28(4) of the 1922 Act cannot be a
bar as no penalty was imposed under s. 28,and there is no
provision similar to s. 28(4) in the 1961 Act. [930 A-B]
Jain Bros & Others v. The Union of India & others [1970] 3
S.C.R. 253. followed.
(2) Article 20(1) does not help the appellant. It is not a
post facto legislation that is being pressed against him.
Section 28(4) did not obliterate the commission of the
offence or convert the offence into an innocent act. Under
the section, the imposition of penalty merely barred the
prosecution. But in the present case, the penalty having
been imposed under s. 271 of the 1961 Act the launching of
prosecution became permissible and was not hit by Art.
20(1). [931 D]
Rao Shiv Bahadur Singh and another v. The State of Vindhya
Pradesh [1953] S.C.R. 1188. followed.
(3) (a) On the facts alleged, if true, the appellant would
be guilty of an offence tinder s. 52 of the 1922-Act.
Section 297(1) of the 1961-Act repealed the 1922Act. In s.
297(2) there is no saving for launching a prosecution under
s. 52 of the 1922-Act. But since no intention different
from that in s. 6 of the General Clauses Act, 1897, appears
in s. 297(2) of the 1961-Act, the criminal liability in-
curred tinder s. 52 of the 1922 Act remains unaffected under
s. 6(c) of the General
928
Clauses Act. The Prosecution can only be for the offence
under s. 52 of the 1922-Act and s. 277 of the 1961 Act,
which corresponds to s. 52 of the 1922-Act, cannot be
invoked. [931 G-H]
(b) The appellant would also be entitled to rely on the
second part of Art. 20(1) that he Should not be subjected to
a penalty greater than that which might have been inflicted
under the law in force at the time of the commission of the
offence, (s. 52 of the 1922 Act), because, s. 277 of the
1961-Act, corresponding to s. 52 of the 1922 Act, provides a
greater punishment. [931 E-F]
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 28-39
of 1971.
Appeals by Special Leave from the Judgment and order dated
the 18th August, 1970 of the Rajasthan High Court in SB.
Criminal Revision Nos. 102-113 of 1968.
M. M. Tewari, and S. M. Jain, for the appellant.
T. A. Ramachandran S. P. Nayar, and R. N. Sachthey, for the
respondent.
The Judgment of the Court was delivered by
UNTWALIA, J. These are 12 appeals filed by the appellant on
grant of special leave by this Court from the common
judgment of the Rajasthan High Court allowing 12 Criminal
appeals filed by the respondent in accordance with section
417(3) of the Code of Criminal Procedure, 1898. The
appellant as partner of his partnership firm filed (1)
Income Tax Returns for various assessment years-the last one
being assessment year 1959-1960. The Returns were filed by
the appellant between 26-3-1958 and 16-10-1961 in accordance
with section 22(2) of the Income Tax Act,1922-hereinafter
referred to as the 1922 Act. The said act was repealed and
replaced by the Income Tax Act, 1961-hereinafter called the
1961 Act. The 1961 Act came into force on or from 1-4-1962.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6
During the course of the assessment proceedings when account
books were produced for examination by the Income-tax
Officer, Special Investigation Circle’B’, Jaipur, he
suspected their genuineness or correctness. In May, 1963
the appellants premises were searched and a number of other
books of account and documents were seized. Thereupon the
appellant filed revised Returns on 1-3-1964 in respect of
all the 12 periods. In the revised Returns the total income
shown was far greater than what was shown in the earlier
Returns. Income-tax was assessed after the filing of the
revised Returns in respect of all the periods in accordance
with the 1961 Act. Penalty proceedings were initiated and
penalty was levied in respect of each Return under section
271(1) (c)(iii) of the 1961 Act. The respondent filed 12
complaints against the appellant alleging commission of
offence by him under section 277 of the 1961 Act. Since the
respondent was not quite sure of the legal Position, as a
matter of abundant precaution 12 more complaints were filed
on the same facts to remake out commission of offence by the
appellant under section 52 of the 1922 Act. The City Magis-
trate, Jaipur in whose court all the 24 complaints were
filed ordered
929
the tagging of the 12 complaints filed later under section
52 of the 1922 Act with the complaints filed earlier under
section 277 of the 1961 Act. To all intents and purposes
therefore the numerically 24 complaints became 12 complaints
for trial of the appellant under section 277 of the 1961 Act
or section 52 of the 1922 Act as the case may be.
After the commencement of the trial the appellant in each
case filed a petition before the City Magistrate that the
launching of the prosecution against him was bad and void in
view of the provisions of section 28(4) of the 1922 Act read
with Article 20(1) of the Constitution of India. The
Magistrate felt persuaded to accept the stand taken on
behalf of the appellant and held that the could not be
prosecuted after imposition of penalty under the taxing
statute and acquitted the appellant in all the cases. The
High Court has held that since no penalty was imposed on the
petitioner or his firm under section 28 of the 1922 Act,
section 28(4) was not a bar to the institution of the
prosecution nor was it hit by Article 20(1). The High Court
did not express any view whether the offence, if any,
committed by the appellant fell under section 277 of the
1961 Act or section 52 of the 1922 Act. The appeals were
allowed and the Magistrate was directed to proceed with the
trials in accordance with the law. Hence these appeals.
The only question falling for our determination in these
appeals is Whether institution of the prosecution against
the appellant for the alleged commission of offences by him
under either the 1961 or the 1922 Act was bad in law as
being violative of section 28(4) of the 1922 Act or Article
20(1).
Section 297(1) of the 1961 Act repealed the 1922 Act.
Certain savings were provided in sub-section (2) some of
which even without those express provisions would have been
covered by section 6 of the General Clauses Act, 1897. But
for the sake of precision and certainty those provisions
were made. Some of the clauses (a) to (in) in sub-section
(2) of section 297 are such that a different intention
appears from them and they over-ride or supplement the
provisions contained in section 6 of the General Clauses
Act. Section 297 (2) provides "Notwithstanding the repeal
of the Indian Income-tax Act, 1922 (Xi of 1922) (hereinafter
referred to as the repealed Act),-
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6
*
*
(f) any proceeding for the imposition of a
penalty in respect of any assessment completed
before the 1st day of April, 1962, may be
initiated and any such penalty may be imposed
as if this Act had not been passed;
(g) any proceeding for the imposition of a
penalty in respect of any assessment for the
year ending on the 31st day of March, 1962, or
any earlier year, which is completed on or
after the 1st day of April, 1962, may be
initiated and any such penalty may be imposed
under this Act."
930
All the 12 assessments although they related to the years
earlier than the year ending on the 31st day of March, 1962
were completed after coming into force of the 1961 Act.
Hence a proceeding for the imposition of penalty in respect
of any one of those years had to be and was initiated under
the 1961 Act in accordance with clause (g) Clause (f) did
not come into play and no penalty was imposed under section
28 of the 1922 Act. That being so, as rightly pointed out
by the High Court, section 28(4) was not a bar to the
launching of the prosecution as no such provision is to be
found either in section 271 or in any other section of the
1961 Act. Section 28(4) says "No prosecution for an offence
against this Act shall be instituted in respect of the same
facts on which a penalty has been imposed under this
section.", The said provision is not available to the
appellant to bar the institution of the prosecution for an
offence against either of the two Acts when a penalty has
been imposed not under section 28(1) of the 1922 Act but
under section 271(1) of the 1961 Act.
Grover, J delivering the judgment on behalf of the
Constitution Bench of this Court in the case of Jain Bros &
others v. The Union of India others(1) has pointed out at
page 263 :
"It is obvious that for the imposition of
penalty it is not the assessment year or the
date of the filing of the return which is
important but it is the satisfaction of the
income tax authorities that a default has been
committed by the assessee which would attract
the provisions relating to penalty. Whatever
the stage at which the satisfaction is
reached, the scheme of ss.274(1) and 275 of
the Act of 1961 is that the order imposing
penalty must be made after the completion of
the assessment. The crucial date, therefore,
for purposes of penalty is The date of such
completion."
At page 264 says the learned Judge further :
"Both ss. 271(1) and 297(2)(g) have to be read
together and in harmony and so read the only
conclusion possible is that for the imposition
of a penalty in respect of any assessment for
the year ending on March 31, 1962 or any
earlier year which is completed after first
day of April 1962 the proceedings have to be
initiated and the penalty imposed in
accordance with the provisions of s.271 of the
Act of 1961."
Even clause (1) of Article 20 of the Constitution does not
help the appellant. It is not a post facto legislation
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6
which is being pressed into service against him. As pointed
out by a Constitution Bench of this Court in Rao Shiv
Bahadur Singh and another v. The State of Vindhya Pradesh(2)
at page 1198 :
"This article in its broad import has been
enacted to prohibit convictions and sentences
under ex post facto laws. The principle
underlying such prohibition has been
elaborately
(1) [1970] (3) S.C.R. 253.
(2) [1953] S.C.R. 1188.
931
discussed and pointed out in the very learned
judgment of Justice Willes in the well known
case of Phillips v. Eyre(1870) 6 Q.B.D. 1, at
23 and 25 and also by the Supreme Court of
U.S.A. in Calder v. Bull-3 Dallas 386; 1 Law.
Edition 648 at 649. In the English case it is
explained that ex post facto laws are laws
which voided and punished what had been lawful
when done. There can be no doubt as to the
paramount importance of the principle that
such ex post facto laws, which retrospectively
create offences and punish them are bad as
being highly inequitable and unjust."
Article 20(1) also prohibits_ the subjecting of any person
to a penalty greater than that which might have been
inflicted under the law in force at the time of the
commission of the offence. On the facts alleged against the
appellant, it found to be true, at the time he made the
false statements in the declarations he did commit an
offence under section 52 of the 1922 Act. Sub-section (4)
of section 28 did not obliterate the factum of the
commission of the offence and did not transmute the offence
into an innocent act because of the imposition of penalty
under section 28. Such imposition merely. barred the
prosecution for the trial and conviction of the commission
of the offence. The penalty having been imposed under
section 271 of the 1961 Act the launching of the prosecution
became permissible and was not hit by Article 20(1) of the
Constitution. We are inclined to think that the offence, if
any, committed by the appellant was under section 52 of the
1922 Act as the allegedly false statements in declarations
were made at a time when the, said Act was in force. No
false statement in any declaration seems to have been made
under the 1961 Act to form the basis of a charge against the
appellant under section 277 of that Act. The punishment
provided in this section is greater than the one engrafted
in section 52 of the 1922 Act. To that extent only the
appellant would be entitled to press into service the second
part of clause (1) of Article 20 of the Constitution which
says that no person shall
"be subjected to a penalty greater than that
which might have been inflicted under the law
in force at the time of the commission of the
offence."
It is advisable to discuss and dispose of a new point which
arose bring the hearing of these appeals. Sub-section (1)
of, section 297 the 1961 Act repealed the 1922 Act including
section 52. In sub-section (2) no saving seems to have been
provided for the launching of the prosecution under the
repealed section 52 of the 1922 It does not seem correct to
take recourse to clause (h) of Section 297(2) to make the
offences come under section 277 of the 1961 it as was
endeavoured to be done by the respondent in the first
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6
complaint petitions. But then from no clause under sub-
section a different intention appears in this regard from
what has been I in section 6 of the General Clauses Act. On
the facts alleged criminal liability incurred under section
52 of the 1922 Act reasons unaffected under clause (c) of
section 6 of the General Clauses
932
Act. In the case of T. S. Baliah v. T. S. Rangachari(1)
Ramaswami, J. delivering the judgment of this Court has said
at page 71 :
"The principle of this section is that unless
a different intention appears in the repealing
Act, any legal proceeding can be instituted
and continued in respect of any matter pending
under the repealed Act as if that Act was in
force at the time of repeal. In other words,
whenever there is a repeal of an enactment the
consequences laid down in s.6 of the General
Clauses Act will follow unless, as the section
itself says, a different intention appears in
the repealing statute. In the case of a
simple repeal there is scarcely any room for
expression of a contrary opinion. But when
the repeal is followed by fresh legislation on
the same subject the Court would undoubtedly
have to look to the provisions of the new Act,
but only for the purpose of determining
whether they indicate a different intention.
The question is not whether the new Act
expressly keeps alive’ old rights and
liabilities but whether it manifests an
intention to destroy them. Section 6 of the
General Clauses Act therefore will be
applicable unless the new legislation
manifests an intention incompatible with or
contrary to the provisions of the section.
Such incompatibility would have to be
ascertained from a consideration of all the
relevant provisions of the new statute and the
mere absence of a saving clause is by itself
not material."
In the result all the appeals fail and are dismissed.
V.P.S.
Appeals dismissed
(1) [1969] (3) S.C.R. 65.
933