Full Judgment Text
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PETITIONER:
K.S. RASHID AND SON
Vs.
RESPONDENT:
THE INCOME-TAX INVESTIGATION COMMISSION, ETC.(With connecte
DATE OF JUDGMENT:
22/01/1954
BENCH:
MUKHERJEA, B.K.
BENCH:
MUKHERJEA, B.K.
HASAN, GHULAM
MAHAJAN, MEHAR CHAND (CJ)
DAS, SUDHI RANJAN
BOSE, VIVIAN
CITATION:
1954 AIR 207 1954 SCR 738
CITATOR INFO :
F 1956 SC 246 (23)
R 1957 SC 882 (6)
F 1959 SC 881 (6)
AFR 1961 SC 532 (3,9,14,24,36,47)
RF 1961 SC1506 (9)
ACT:
constitution of India, art. 226--Jurisdiction of
Punjab High Court to issue writs to Income-tax Investigation
Commission located in Delhi--Remedy under art.
226--Discretionary--Taxation on Income (Investigation
Commission) (Act XXX of 1947), ss. 5 and 8(5).
HEADNOTE:
The Punjab High Court has jurisdiction to issue a writ
under art. 226 of the Constitution to the Income-tax
Investigation Commission located in Delhi and
investigating the case of the petitioner under 5 of the
Taxation on Income (Investigation Commission) Act, 1947,
although the petitioners were assessees within the U.P.
State and their original assessments were made by the
Income-tax authorities of that State.
Article 226 of the Constitution confers on all the
High Courts new and very wide powers in the matter of
issuing writs which they never possessed before. There are
only two limitations placed upon the exercise of such
powers by a High Court; one is that the power is to be
exercised "throughout the territories in relation to which
it exercises jurisdiction", that is to say, the writs
issued by the court cannot run beyond the territories
subject to its jurisdiction. The other is that the
person or authority to whom
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the High Court is empowered to issue writs "must be within
those territories" and this ,implies that they must be
amenable to its jurisdiction either by residence or location
within those territories.
The remedy provided in art. 226 of the Constitution is
a discretionary one and the High Court has always the
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discretion to refuse to grant any writ if it is satisfied
that the aggrieved party can have an adequate or suitable
relief elsewhere.
Ryots of Garabandho v. Zamindar of Parlakimedi (70 I.A.
129) and Election Commission v; Saka Venkata Subba Rao
[1953] S.C.R. 1144 referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: CIVIL APPEALS Nos.
118 to 121 of 1952.
(Appeals under article 133 (1) (c) of the Constitution
of India from the Judgment and Order dated the 10th
August, 1950, of the High Court of Judicature, Punjab at
Simla (Khosla and Kapur JJ.) in Civil Miscellaneous Nos.
256, 260, 261 and 262 of 1950).
Dr. Balkshi Tek Chand (T. N. Sethi, with him) for the
appellants.
M.C. Setalvad, Attorney-General for India (Porus A.
Mehta, with him) for the respondents.
1954. January, 22. The Judgment of the Court was
delivered by
MUKHERJEA J.--These four consolidated appeals, which
have come before us, on a certificate granted by the High
Court of Punjab under article 133 (1)(c)of the
Constitution, are directed against one common judgment
of a Division Bench of that court dated the 10th August,
1950, by which the learned Judges dismissed four
analogous petitions, presented on behalf of the
different appellants, claiming reliefs under articles
226 and 227 of the Constitution, in respect of certain
income-tax investigation proceedings commenced
against them under Act XXX of 1947. It appears that a
partnership firm carrying on business under the name and
style of K.S. Rashid & Son was started on the 5th of May,
1934, the partners being three in number to wit K.S.
Rashid Ahmed, Saeed Ahmed, his son, and Mrs. Zafar
Muhammed, his mother Mrs. Zafar Muhammed died on the 7th
of January, 1946, and as a result of her death the
partnership stood dissolved. Immediately on the day
following,
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that is to say on the 8th of January, 1946, a new firm was
started bearing the same name, with the two surviving
partners of the original firm and one Saeeda Begum, a
daughter of K.S. Rashid, as the third partner. On the
31st of December, 71947, the Central Government referred
the cases of this firm, as well as of the individuals
constituting it, to the Income-taxInvestigation Commission
for enquiry and report under section 5of Act XXX of 1947,
presumably on the ground that there had been substantial
evasion of payment of income-tax in these cases. The
authorised official appointed under section 5 (4)(3) of the
Act, who figures as respondent No. 2 in all these appeals,
in due course started investigation in these cases and the
appellants’ complaint is, that contrary to the
provisions of the Act, he extended his investigations to a
period subsequent to the 31st March, 1943, up to
which date the income-tax assessment in all these cases was
completed. A petition embodying this complaint was made
-to the authorised official on the 8th of April, 1949, but
no order was passed on the petition, as the Commission was
expecting an early change of law in this respect. The law
was amended by an Ordinance dated the 5th of July, 1949, but
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the appellants still contended that the amendment was
neither retrospective in its operation, nor did it enable
the authorised official to carry on his investigation
beyond the 31st March, 1943. The account books, however,
were shown to the official under protest. On the 17th
September, 1949, three applications were filed before the
Commission, one with regard to the affairs of Mrs.
Zafar Muhammed stating that no investigation could take
place in regard to her as she was already dead;the second
with regard to the affairs of Saeeda Begum on the ground
that she being a new partner and not having been assessed
before, was not subject to ’the jurisdiction of the
Commission; while the third application was to the
effect that the new firm, which came into existence on the
8th of January, 1946, could not have its affairs enquired
into at all under the provisions of the Act. After that,
in June, 1950, four miscellaneous petitions were filed,
(being C.M. Gases Nos. 259 to 262
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of 1950) on behalf of the appellants, before the High Court
of Punjab, and the prayers made therein were of a three-
fold character. It was prayed in the first place that
a writ of prohibition might be issued to the Commission and
the authorised official directing them not to proceed with
the investigation of cases referred to the Commission under
section 5 of Act XXX of 1947. The second prayer was for a
writ in the nature of certiorari for quashing the
proceedings already commenced. The third and the
alternative claim was that the proceedings before the
Commission might be revised under article 277 of the
Constitution and suitable orders passed as the justice of
the case would require. Upon these petitions, rules were
issued on the 25th of July, 1950, after a report from
the Investigation Commission had been called for. On
behalf of the respondents, who resisted these petitions,
certain preliminary points were raised in bar of the
petitioners" claim. It was contended in the first
place that the petitioners being assessees belonging to
U.P., their assessments were to be made by the
Income-tax Commissioner of that State and the mere fact that
the location of the Investigation Commission was in Delhi
would not confer jurisdiction upon the Punjab High
Court to issue writs under article 226 of the
Constitution. The second objection was that the Act
itself being of a special nature which created new rights
and liabilities, the remedies provided for in the Act
itself for any breach or violation thereof were the only
remedies which could be pursued by the aggrieved parties and
article 226 or 227 of the Constitution would not be
available to the petitioners. The third ground taken
was that the court could not give relief to the petitioners
because of sections 5(3) and 9 of Act XXX of 1947. These
contentions found favour with the learned Judges who heard
the petitions, and although they did not express any final
opinion on the third point raised they dismissed the
applications of the petitioners on the first two grounds
mentioned above. It is against these orders of dismissal
that the present appeals have been taken to this court and
Dr. Tek Chand, who appeared on behalf of the appellants, has
assailed the
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propriety of the decision of the High Court both the
points.
So far as the first, point is concerned, which relates
to the question of jurisdiction of the Punjab High
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Court to issue writs of certiorari or prohibition in
these cases, the learned Judges based their decision
entirely upon the pronouncement of the Judicial Committee in
the well known case of Ryots of Garabandho v.’ Zamindar of
Parlakitnedi(1). The question for consideration in that
case was, whether the High Court of Madras had jurisdiction
to issue a writ of certiorari in respect of an order passed
by the Collective Board of Revenue, as an appellate
authority, in certain proceedings for settlement of rent
between the Zamindar of Parlakimedi and the Ryots of
certain villages within his estate situated in the
district of Ganjam which was wholly outside the limits of
the Presidency town of Madras. The question was answered in
the negative. The Judicial Committee laid down that the
three Chartered High Courts of Calcutta, Madras and Bombay
had powers to issue, what were known as the high prerogative
writs, as successors to the Supreme Courts which
previously exercised jurisdiction over these Presidency
Towns; but the exercise of the powers under the Charter
was limited to persons within the ordinary original
civil jurisdiction of the three High Courts, and outside
that jurisdiction it extended only to ’British subjects’
as defined in the Charter itself. It was held that the
Supreme Court of Madras had no jurisdiction under the
Charter which created it to correct or control a country
court of the the East India Company deciding a dispute
between Indian inhabitants of the Ganjam district about
the rent payable for land in that district; and no such
power was given by any subsequent legislation to its
successor, the High Court . A contention seems to have
been raised on behalf of the appellants that the
jurisdiction to issue writs could be rounded on the fact
that the office of the Board of Revenue, which was the
appellate authority in the matter of settlement of
rents, was located within the town of Madras
(1) 70 I.A. 129.
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and the order complained of was made in that town and
reliance was placed in this connection upon the case of
Nundo Lal Bose v. The Calcutta Corporation (1), where a
certiorari was issued by the Calcutta High Court to quash an
assessment made by the Commissioners of the town of Calcutta
on a certain dwelling house. This contention was repelled by
the Judicial ’Committee with the following observations:
"The question is whether the principle of that case
can be applied in the present case to the settlement of
rent for land in Ganjam, merely on the basis of the
location of the Board of Revenue, as a body which is
ordinarily resident or located within the town of
Madras, or on the basis that the order complained of was
made within the town. If so, it would seem to follow that
the jurisdiction of the High Court would be avoided by the
removal of the Board of Revenue beyond the outskirts
of the town, and that it would never attach but for the
circumstance that an appeal is brought to, or
proceedings in revision taken by, the Board of Revenue.
Their Lordships think that the question of jurisdiction
must be regarded as one of substance, and that it
would not have been within the competence of the
Supreme Court to claim jurisdiction over such a matter as
the present by issuing certiorari to the Board of Revenue
on the strength of its location in the town. Such a view
would give jurisdiction to the Supreme Court, in the
matter of the settlement of rents for ryoti holdings in
Ganjam between parties not otherwise subject to its
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jurisdiction, which it would not have had over the
Revenue Officer who dealt with the matter at first
instance."
It is on the basis of these observations of the Judicial
Committee that the learned Judges have held that the
mere location of the Investigation Commission in Delhi is
not sufficient to confer jurisdiction upon the Punjab
High Court to issue a writ in the present case. It is
said that the petitioners are assessees within the U. P
State and their original assessments were made by the
Income-tax Officers of that State.
(1)I.L.R. II Cal. 275
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The subsequent proceedings, which had to be taken in
pursuance of the report of the Investigation Commission,
would have to b.e taken by the Income-tax authorities
in the U.P., and if a case had to be stated, it would be
stated to the High Court at Allahabad. Taking, therefore, as
the Privy Council had said, that, the question of
jurisdiction is one of substance, it was held that no
jurisdiction in the present case could be vested in the
Punjab High Court, for that jurisdiction could be avoided
simply by removal of the Commission from Delhi to another
place.
This line of reasoning does not appear to us to be
proper and we do not think that the decision in the
Parlakimedi’s case(1) is really of assistance in
determining the question of jurisdiction of the High Courts
in the matter of issuing writs under article 226 of the
Constitution. The whole law on this subject has been
discussed and elucidated by this court in its recent
pronouncement in Election Commission v. Venkata Rao(2
) where the observations of the Judicial Committee in
Parlakimedi’s case, upon which reliance has been placed by
the Punjab High Court, have been fully explained. It is
to be noted first of all, that prior to the commencement
of the Constitution the powers of issuing prerogative
writs could be exercised in India only by the High
Courts of Calcutta,, Madras and Bombay and that also
within very rigid and defined limits. The writs could
be issued only to the extent that the power in that
respect was not taken away ’by the Codes of Civil and
Criminal Procedure(3) and they could be directed only
to persons and authorities within the original civil
jurisdiction of these High Courts. The Constitution
introduced a fundamental change of law in this respect.
As has been explained by this Court in the case referred
to above, while article 225 of the Constitution
preserves to the existing High Courts the powers and
jurisdictions which they had previously, article 226
confers, on all the High Courts, new and very wide powers
(1) 70 I.A. 139.
(1) [1953] S.C.R. 1144.
(3) Vide in this connection Besant v. Tire Advocate General
of Madras. 46 I.A. 176.
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in the matter of issuing writs which they never
possessed before. "The makers of the
Constitution" thus observed Patanjali Sastri C.J.
in delivering the judgment of the court, "having
decided to provide for certain basic safeguards for the
people in the new set up, which they called fundamental
rights, evidently thought it necessary to provide also a
quick and inexpensive remedy for the enforcement of such
rights, and, finding that the prerogative writs, which the
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courts in England had developed and used whenever urgent
necessity demanded immediate and decisive interposition,
were peculiarly suited for the purpose, they conferred,
in the State’s sphere, new and wide powers on the
High Courts of issuing directions, orders, or writs
primarily for the enforcement of fundamental rights, the
power to issue such directions, etc. ’for any other
purpose’ being also included with a view apparently to
place all the High Courts in this country in somewhat the
same position as the Court of King’s Bench in
England." There are only two limitations placed upon the
exercise of these powers by a High Court under article 226
of the Constitution; one is that-the power is to
be exercised "throughout the territories in relation
to which it exercises jurisdiction", that is to say,
the writs issued’ by the court cannot run beyond
the territories subject to its jurisdiction.
The other limitation is that the person or authority to
whom the High COurt is empowered to issue writs "must be
within those territories" and this implies that they must
be amenable to its jurisdiction either by residence or
location within those territories. It is with reference to
these two conditions thus mentioned that the jurisdiction of
the High Courts to issue writs under article 226 of the
Constitution is to be determined. The observations of
the Judicial Committee in Parlakimedi’s case(1) have
strictly speaking no direct bearing on the point. It is
true as the Privy Council said in that case that the
question of jurisdiction must be regarded as one of
substance, but the meaning and implication of this
observation could be ascertained only with
reference to the context of
(1) 701. A. 129.
11--95 S.C. 1./59
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the facts and circumstances of that case. As was
pointed out by this court in the case referred to
above(1): "Their Lordships considered, in the peculiar
situation they were dealing with, that the mere
location of the appellate authority alone in the town of
Madras was not a sufficient basis for the exercise of
jurisdiction whereas both the subject matter, viz., the
settlement of rent for lands in Ganjam, and the Revenue
Officer authorised to make the settlement at first instance
were outside the local limits of the jurisdiction of the
High Court. If the Court in Madras were recognised as
having jurisdiction to issue the writ of certiorari to the
appellate authority in Madras, it would practically be
recognising the court’s jurisdiction over the Revenue
Officer in Ganjam and the settlement of rents for lands
there, which their Lordships held it never had. That was
the ’substance’ of the matter they were looking at." In
our opinion, therefore, the first contention raised by Dr.
Tek Chand must be accepted as sound and the view taken by
the Punjab High Court on the question of jurisdiction
cannot be sustained.
So far as the second point is concerned, the High Court
relies upon the ordinary rule of construction that
where the legislature has passed a new statute giving a new
remedy, that remedy is the only one which .could be
pursued. It is said that the Taxation on Income
(Investigation Commission) Act, 1947, itself provides a
remedy against any wrong or’ illegal order of the
Investigating Commission and under section 8 (5) of the Act,
the aggrieved party can apply to the appropriate
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Commissioner of Income-tax to refer to the High Court
any question of law arising out of such .order and
thereupon the provisions of sections 66 and and 66-A of the
Indian Income-tax Act shall apply with this modification
that the reference shall be heard by a Bench of not less
than three Judges of the High Court. We think that it is not
necessary for us to express any final opinion in this case
as to whether section 8 (5) of the Act is to be regarded
as providing the only remedy available to the aggrieved
party and that it excludes altogether the remedy
provided for
(1) A.I.R. z953 S.C. 310, 214; [1953] S.C.R. 1144.
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under article 226 of the Constitution. For purposes of this
case it is enough to state- that the remedy provided for in
article 226 of the Constitution is a discretionary remedy
and the High Court has always the discretion to refuse to
grant any writ if it is satisfied that the aggrieved party
can have an adequate or suitable relief elsewhere. So
far as the present case is concerned, it has been brought to
our notice that the appellants before us have already
availed themselves of the remedy provided for in section
8(5) of the Investigation Commission Act and that a
reference has been made to the High Court of Allahabad in
terms of that provision which is awaiting decision. In
these circumstances, we think that it would not be proper
to allow the appellants to invoke the discretionary
jurisdiction under article 226 of the Constitution at the
present stage, and on this ground alone, we would refuse to
interfere with the orders made by the High Court. Dr. Tek
Chand argues that the Income-tax authorities have not
referred all the matters to the High Court which the
appellants wanted them to do. But for this there is a
remedy provided in the Act itself and in case a proceeding
occasions a gross miscarriage of justice, there is always
the jurisdiction in this court to interfere by way of
special leave. In the result, we dismiss the appeals
but in the circumstances of the case make no order as to
costs. ’
Appeals dismissed.
Agent for the appellant: Rajinder Narain.
Agent for the respondents: R.H. Dhebar.
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