INCOME-TAX OFFICER, AGRA v.

RADHA KRISHAN

April 27, 1967

[J. C. SHAH AND V. RAMASWAMI, JJ.] Indian Income-tax Act, 1922, s. 23(5) (a), 26A and 44-Registered firm-Partners taxed individually on •their shares--One partner defaulting in pay111ent of tax on his share-Tax so due 1vhether can he recovered from other partners.

The respondent was one of the partners in a partnership firm registered under s. 26A of the Indian Ineome-tax Act, 1922. The Jncometax Officer in making assessments for the assessment years 1944-45, 1945-46. and 1946-47 and 1947-48 determined the shares of each of the partners and taxed them accordin~ to the provisions of s. 25 (3) (o) of the Indian Income-tax Act .. 1922.

One of the partners defaulted in the payment of tax and tl1e Income-tax Officer sought to recover the unpaid tax attri~ butable to tile share of the defaulting partner in the firm from the respondent.

The respondent's petitioo under Art. 226 challenging the :..tten1pteJ rccuvt:r• 1 was allowed by the single Judge whose order was confirmed by the Division Bench.

The Revenue by special came to this Court.

It was urged on behalf of the Revenue that even though bys. 23(5)(a) the total income of each membe-r of a registered firm is taxed it is the firm which is assessed to tax so that the tax attributable to the share of one partner can be recovered from another, the responsibility of all being joint an<l several. Reliance was also placed on s. 44 of the Act.

HELD : (i) Undoubtedly contractual obligations of a firm are enforceable jointly and severally against the partners.

But the liability to pay income-tax is statutory; it does not arise out of any contract, and its incidence must b~ determined by the statute. If the statute which imposes the liability has not made it enforceable jointly. and severally against the partners, no such implication can arise merely because contractual liabilities of a firm may be jointly and severally imposed again5t the partners.

[825E-F] .

(ii) There is nothing in s. 44 of the Act which suppo1"ts the conten- \IOJ:! \hat for payment of tax assessed against a partner of a registered firm

n~1v1dually under •. 2~(5)(a) of the Act, another partner becomes liable 1omtly and severally with the first partner to pay tax. [825C] The entire scheme of taxing the income of a registered firm in the hands of the individual partner is inconsistent with any assumption that for payment of tax ?ssessed against a partner, other partners are liable.

The t?x assesed. aa1nst a partner of a registered firm is assessed on his total. inco~-e 1nclus1e of the share in the firn1's income and the rate applicable IS determmed hy the quantum of the total income of the part.1cr.

!8250-E] Co1nn1issioner o_f .I11co111e-1ax, 1Yfadras v. S. V. Angidi Chettlar, 44 T.T.R. 739, Co1nnuss1011er of lnco111etax, Bo111hay v. A1nri1/al Bhogi/a/ & Compny, 34 I.T.R. 130 and Shivram Poddar v. Income-tax Of!icer Central Circle II, Calcutta, SI I.T.R. 823, distinguished. ' CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1413 of 1966.

Appeal by special leave from the judgment and order dated A July 31, 1963, of the Allahabad High Court in Special Appeal No. 205 of 1963.

B. Sen, S. K. Aiyar and R. N. Sachthey, for the appellant.

A. K. Sen, J. P. Goyal and G. C. Sharma, for the respondent.

The Judgment of the Court was delivered by Shah, J.

A business of manufacture and sale of tents was commenced in 1940 in the name and style of Messrs J awahar Tent Factory, Agra, in partnership. There were four partners in the firm-Jawahar Lal, Shiam Lal, Radha Raman and Radha Krishan.

J awahar Lal represented his Hindu undivided family and his share in the profit & loss was -/8/- (eight annas) in a rupee. The share of other partners was -/2/~ (two annas eight pies) each. The firm was registered under s. 26A of the Indian Income-tax Act, .1922, and tax was assessed on th.e income of the firm in accordance with s. 23 ( 5 )(a) of the Act. The partnership was, according to the Income-tax Officer, dissolved on October 23, 1946.

This appeal relates to the tax liability of J awahar Lal in respect of the income from the firm for the assessment years 1944-45, 1945-46, 1946-47 and 1947-48. The tax attributable to the share of Jawahar Lal, which it is claimed could not be recovered from him, is sought to be recovered from his . erstwhile partner Radha Krishan.

The following table sets out the share of 'the income of Jawahar Lal and the tax liability not satisfied by him in respect of the four years of assessment :

Year of ass.s'm.nt Share of incom0 of Jawahar Lal from the firm Tax liability

1944-45 1945-46 1946-47 1947-48

47,717 53,864 35.167 19,466

not satisfi d

8.623-56 39.416-23 16, f 92-59 15,163-87 79,296-25 The manner in which the tax liability is determined requires some elucidation.

The Hindu undivided family of Jawahar Lal had considerable other income. In accordance with the provisions of s. 25(3) (a) of the Indian Income-tax Act, the share of Jawahar Lal from the income of the partnership was added to the other income of the family, and the family was assessed to tax on the total income.

For the purpose of computing "the tax liability not satisfied" as shown in the last column of the statement set out herein-before, the Income-tax Officer determined the average rate of tax on the total income of the Hindu undivided family and then applied that rate to the share of Jawahar Lal from the firm to determine the tax liability attributable to that share. Tax collected from Jawahar Lal was credited proportionately to the

' '

I.T.O. v, RADHA KRISllAN (Sht1/1, J,) 823

income under the two heads towards the tax liability so detennin ed, and the tax liability of J awahar Lal attributable to his share in the income was computed.

The Income-tax Officer served Radha Krishan respondent in this appeal-on October 3, 1962 with demand notices for the tax remaining unpaid by Jawahar Lal. Radha Krishan thereupon moved the High Court of Judicature at Allahabad for a writ of certiorari quashing the notices of demand and for an order direct ing the Income-tax Officer to withdraw the notices. Manchanda, J., allowed the petition filed by Radha Krishan and the order passed by Manchanda, J., was confirmed in appeal by a Division Bench of the High Court. With special leave, the Income-tax Officer, Agra has appealed to this Court.

Section 23 ( 5) of the Income-tax Act, as it stood at the mate rial time, read as follows :

" ( 5) Notwithstanding anything contained in the foregoing sub-sections, when the assessee is a finn and the total income of the firm has been assessed under sub-sec tion (1), sub-section ( 3), or sub-section ( 4) as the case may be.- ( a) in the case of a registered firm, the sum payable by the firm itself shall not be detennined but the total income of each partner of the firm, including therein his share of its income, profits and gains of the pre . vious year, shall be assessed and the sum payabk by him on the basis of such assessment sha!J be determined :

Provided Provided further F Provided also

(b) in the case of an unregistered firm, the Income-tax

Officer may instead of determining the sum payable by the firm itself proceed in the manner laid down in clause (a) applicable to a registered firm, if in his opinion, the aggregate amount of the tax including super-tax, if any, payable by the partners under such procedure would be greater than the aggregate amount which would be payable by the firm and the partners individually if the firm were assessed as an unregistered firm.

The machinery for assessment to tax the income of a firm in the relevant years of assessment may be noticed. A firm under the Income-tax Act is a unit of assessment; and the income of the firm is computed as that of the unit irrespective of whether the

L9Sup. CI/67-9

firm is registered or unregistered, after the income of the firm is computed if the firm is registered under s. 26A the share of each partner in the income of the firm is determined and is added to his other income and the total income so computed is brought to tax. If the firm is .unregistered, the tax payable by the firm is, except when the Income-tax Officer otherwise directs in the interests of revenue, determined as in the case of any Other entity, and demand for tax is made on the firm itself. The result is that if the firm is registered tax is collected from the partners individually and there is no levy of tax against the firm. H the firm is unregistered, the tax may, unless other wise directed, be levied against the firm.

In either case, the machinery set up by s. 23 ( 5) is for assessment of tax payable on the income of the firm.

The income of the firm is computed, but tax is assessed on that income on the partners or the firm, according as the income is of a firm registered or unregistered. Counsel for the Income-tax Officer contended that even though by s. 23(5) (a) a provision was made for assessment to tax of the total income of each member of a registered firm by adding to his separate income the share of the profits of the firm, it is the firm which is assessed to tax, and if the tax attributirble to the share in the income of the firm of a partner cannot be recovered from him, it may be recovered from his other partners.

Counsel for the Income-tax Officer says that this is so because the liability of the partners of a firm in respect of all its obligations including the liability to pay tax is joint and several. Undoubtedly contractual obligations of a firm are enforceable jointly and severally against the partners. But the liability to pay incometax is statutory: it does not arise out of any contract, and its incidence must be determined by the statute. If the statute which imposes liability has not made it enforceable jointly and severally against the partners, no such implication can arise merely because contractual liabilities of a firm may be jointly and sevarally en forced against the partners.

Counsel also relied upon s. 44 of the Income-tax Act, which, as it stood at the relevant time, read as follows :

"Where any business, profession or vocation carried on by a firm or association of persons has been disconti nued, or where an association of persons is dissolved, every person who was at the time of such discontinuance or dissolution a partner of such firm or a member of such association shal!, in respect of the income-profits and gains of the firm or association, be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment."

l, T.O. V, RADHA KRISHAN (Shah, ]. ) 825

A Section 44 is enacted with a view to prevent evasion of tax by discontinuance of the business of a firm or dissolution of an asso

ciation of persons. On discontinuance .of the business of a firm or dissolution of the association of persons, it is declared that every person who was, at the time of such discontinuance or dissolution, a partner of such firm or a member of such association B shall, in respect of the income, profits and gains of the firm or association be jointly and severally liable to assessment and for the amount of tax payable.

This Court has in Commissioner of Income-tax, Madras and Anr. v. S. V. Angidi Chettiar(') held that the provisions of s. 44 of the Income-tax Act apply both to registered and unregistered firms.

But there is nothing in s. 44 of the Act which supports the contention that for payment of tax assessed against a partner of a registered firm individually under s. 23(5)(a) of the• Act. another partner becomes liable jointly and severally with that first partner to Pl!-Y tax.

The entire scheme of taxing the . income of a registered firm in the hands of individual partners is inconsistent with any assumption that for payment of tax assessed against a partner, other partners are liable. The tax assessed against a partner of a registered finn is assessed on his total income inclusive of the share in the firm's income and the rate applicable is determined by the quantum of the total income of the partner. Section 44 contemplates cases of joint and several assessment of income of the business of a finn which is disconti- E nued.

When such an assessment is made, each member of the firm may be liable to pay jointly and severally tax payable by the firm. But when under the scheme of the Act tax is assessed individually against each partner, and no tax is made payable by the firm, the principle of joint and several liability under s. 44 has no application.

Counsel for the Commissioner said that this Court had, if not expressly tacitly, accepted the view that the liability of the partners of a firm to pay tax attributable to the share of each partner in lhe income of the finn is joint and several. Counsel relied upon the clause "determining the tax payable by registered and unregistered firms respectively" in the judgment of this Court in Commissioner of Income-tax., Bombay v. Amritlal Bhogilal & Company(') at p. 136;

"It is true that the Income-tax Officer is empowered to Jollow the two methods specified in section 23( 5)

(a) and (b) in determining the tax payable by registered and unregistered firms respectively and making the demand for the tax so found due; but this does not affect the computation of taxable income",

(I) 44 LT.R. 739.

(2) 34 l.T.R. 130 .

.------.... ' .·,,,~·

.and contended that the tax detennined to be payable under s. 23 ( 5) is payable by the firni, and hence by all the partners jointly and severally. But in Amritlal Bhog/lal's case(1) the Court was called upon to determine whether the Commissioner of Incometax in eitercise of his revisional power may cancel registration of the firm granted under s. 26A and direct the Income-tax Officer to make fresh assessment of the finn as an unregistered finn. when an appeal is pending against the order of assessment before the Appellate Assistant Commissioner.

In makinit the observa tions relied upon, the Court broadly examined the scheme of assessment of registered finns: it was not stated by the court expressly, nor can it be implied, that for tax attributable to the share of a partner in a registered firm, the other partners are liable, notwithstanding separate assessment under s. 23(5) (a).

Reliance was then placed upon the following observations made by this Court in S. V. Angidi Chettlar's case(') at p. 744 :

"Under section 23(5) of the Indian Income-tax Act, before it was amended in 1956, in the case of a register ed firm the tax payable by the firm itself was not required to be determined but the total income of each partner of the firm including therein the share of its income, profits and gains of the previous year was required to be assessed and the sum payable by him on the basis of such assessment was to be detennined. But this was merely a method of collection of tax due from the firm."

In S. V. Angidi Chettiar's case(') it was held that the Incometax Officer has power to make an order under s. 28 imposing penalty on a finn even after dissolution of the firm.

There is nothing in the observations relied upon which indicates that under s. 23(5) (a) when the income of a registered finii. is computed. and the tax liability is imposed by the machinery provided thereunder, the tax is imposed upon the finn or is recoverable jointly and severally from the partners of the finn.

A recent case was also relied upon : Shivram Poddar v. In come-tax Officer, Central Circle II, Calcutta and Anr.(1). In that case it was held that the finn, by the discontinuance of il~ business, does not cease to be liable to pay tax on the income earned by it; nor can a procedure different from the, one prescribed under Ch. IV of the Income-tax Act, 1922 apply for assessment of the income of such a finn.

The firm, after it ha~ discontinued its business, whether it is dissolved or not, will be assessed either under s. 25 ( 1) in the year of account in which it discontinues its business, or in the year of assessment.

In both

(I) 34 1.T.R. I JJ.

(2) 44 l.T.R. 739.

(31 51 1.T.R. 823 . •

1.r.o. v. llADHA KRISHAN (Shah,/.) 827

cases the procedure for assessment is under s. 23(3) and (4) supplemented by s. 23 ( S). The principle of thiit 1udgment also has no application to the present case. Reliance was placed upon the observation made at p. 828.

"On the discontinuance of the business of a firm. however, by section 44 a joint and several liability of all partners arises to pay tax due by the firm." But that obviously means that a joint and several liability arises when the income of a finn which has discontinued its business is assessed under s. 44. It does not mean that where the assessment is made under s. 23(5) (a) of a reglltered firm and the income of each lndlvldual partner ls assessed, the partners become jointly and severally liable to pay the aggregate amount of tax attributable to their various shares, in their individual usess men ts.

The case.~ relied upon by counsel for the Income Tax Oll!cer do not support the claim made by the Income-tax Officer.

The appeal fails and is dismissed with cqsts.

G.C.

Appeal dismissed.

INCOME-TAX OFFICER, AGRA

RADHA KRISHAN

April 27, 1967

C. SHAH

V. RAMASWAMI, JJ.

Indian Income-tax Act, 1922

s. 23(5)

s. 26A

Indian Ineome-tax Act, 1922

s. 25

Income-tax Act

Art. 226

s. 44

s. 44

B. Sen

S. K. Aiyar

R. N. Sachthey

A. K. Sen

J. P. Goyal

G. C. Sharma

Shah

J awahar Tent Factory, Agra

Jawahar Lal

Shiam Lal

Radha Raman

Radha Krishan

J awahar Lal

s. 26A

Income-tax Act

s. 23

October 23, 1946

J awahar Lal

s. 25(3)

Income-tax Act

Court of Judicature at Allahabad

Manchanda

Agra

Section 23

Income-tax Act

Income-tax Act

s. 26A

s. 23

s. 23(5)

s. 44

Income-tax Act

Section 44

s. 44

Income-tax Act

s. 44

s. 23(5)(a)

Section 44

s. 44

section 23( 5)

s. 23

Amritlal Bhog

s. 26A

s. 23(5)

S. V. Angidi Chettlar

section 23(5)

Income-tax Act

S. V. Angidi Chettiar

s. 28

s. 23(5)

IV of the Income-tax Act, 1922

s. 25

s. 23(3)

s. 23

section 44

s. 44

s. 23(5)


KAMLA PRASAD SINGH A

HARi NATH SINGH & ANR.

April 27, 1967

[M. HIOAYATULLAH AND C. A. VAIDIALINGAM, JJ.] B

1"dia11 Pcm1/ Code. (45 of 1860) Ss. 192 a11d 218 -Difference-Fals• e\.idence used in judicial proceedi'ngs--Public servant prepared false re~ eol'(/--P1ivu1e coniolaint. if can be made.

9ocle of Criminal Proced11re, (5 of 1898) S. 195-False evidence used in j1iilicial procetili11gs-Public se1Tant prepared false record-Prit.•ate c:o1nplaint if c,111 be 1nade.

The "PP•llanl, a private rerson, filed three complaints under s. 2.18 1.P.C. for the prosecution o respondent 1 charging him in each cue with abetment of offences committed by three public 5ervants. In each complaint respondent I was a co-accused with another-in one with an Ahlmad of Tahsildar's Court. in another with one Lekhpal, and in the third with the another 'Lekhpal.

The Ahimud was alleged to have intentionally made a false entry about the case intending that the false entry should he used in a judicial proceeding and wrong opinion be formed, 11>' Lekhmrh: were alleed to have caused the preparation of an incorrect Khasra knowing to .be likely thnt they would thereby cause loss or injury to the appellant. The responclenr I filed an application under s. 56(-A Cr.P.C. stating that the offence. if any, was one under s. 193 J.P.C. and the provisions of Ii, 195 Cr.P.C. barred private complaints, which the High Court accepted.

In appeal, this Court,

HELD : The bar of private complaints applied to the case of Ahlmad, but not to those of Lekhpals. [832 CDl

The difference between ss. 192 and 218 I.P.C. is that the former deals with judicial proceeding and the false evidence is intended to be used in a judicial proceedings. while the 111.tter deals_ with public servants, and, there the gist is the international preparation of false record with a view of savin~ or injuring any person or property and need not have relation to a judicial proceeding us such. (830 DJ

Section 19:! J.P.C. covers the case against tho Ahlmad and l'Ollpott dent I und the offence is punishable under •. 193 I.P.C. which i• mentioned in ' 195(1l(b) Cr.P.C.

No Court can take cognizance of an offence under s. 193 except on the complaint in writing of such court.

The alleged offence against the Lekhpals and respondent 1, their abettor, in the other two cases was of a different order. ThO' offence of a. 2.18 l.P.C. is not a minor offence included withins. 192. It is distinct offence which can be proceeded agninst without the baT of s. 195 Cr.P.C. 'Ibe offence wus complete the moment the false record was made with the said intention and it was not necessary for the completion of this offence that the record should be used in a judicial proceeding so .. to cause an erroneous opinion tq be formed touching on a point material to the result of such proceeding. In the Ahlmad's case this latter condition """ the most important ingredient. [831 B.C, D-0]

CRIMINAL

APPELLATE J.UR!SDICTION : Criminal Appeals Nos. 244·246 of 1964.

K. P. SINGH v. H. N. SINGH (Hidayatu/lah, J.)

S29

A Appeals from. the judgment and order dated February 19, 1964 of the Allahabad High Court in Criminal Misc. Applications Nos. 1853, 3043 and 3044 of 1963.

W. S. Barlingay, J. C. Jalwar and R. L. Kohli, for the appellant (in all the appeals).

J. P. Goyal and R. B. Pathak, for respondent No. 1 (in all the appeals).

The Judgment of the Court was delivered by Hidayatullab, J. Kamla Prasad Singh the appellant had filed three complaints in the Court of the Additional District Magistrate (Judicial) Varanasi for the prosecution of Harinath Singh

(resPondent No. 1) under s. 218 Indian Penal Code. In each of these complaints Harinath was a co-accused with another.. In one, it was Mangla Prasad Pandey, Ahlmad, Court of Tahs!ldar, Sadar Varanasi, in another it was Ramchander Lekhpal of V !Uage Balua and in the third it was Ram Samravlal Lekhpal of Village Cholapore.

In each case Harinath Singh was said to have abetted the offence committed by his co-accused. The circumstances in which the complaints were lodged were common and may now be briefly stated.

Certain Bhumidari lands in these villages were the property of Nankoo s/o Mehar Singh and Stimitra widow of one Ajudhia Singh. On December 4, 1962, Nankoo sold his half share to Kamla Prasad Singh and some otliers.

Kamla Prasad's complaint is that Harinath Singh in conspiracy with the two Lekhpals got certain forged entries to be made in the Khasra after the sale in favour of Kamla Prasad, and applied for the correction of the Jamabandi. The Ahlmad in conspiracy with Harinath Singh ante-dated the said application to November 9, 1962, to make it

ap~ that it was made prior to the sale-deed and to shield the Lekhpals. The application was entered in the register of Jamaband's as. Case No. 116 dated November 9, 1962 although the case bearmg that number was one between Bhagwati Singh and Bhagwati of Birbalpura Kaswal Raja. Afte: th~ complaints were in Court, Harinath Singh filed an applkauon under s. 561-A of the Code of Criminal Procedure stating that the offence, if any, was one under s. 193 of the Indian Pen* Code and the provisions of s. 195 of the Code of Criminal Procedure bai:red. the private complaints.

The High Court

accepte~ the apphcauon. for the above reason and quashing the proceedings agamst Han Nath Singh ordered his discharge. In

tese appeals by certificate, the order of the High Court is questioned.

The first question is what are the distinct features of s. 193 and s. 218 of the Indian Penal Code.

Section 193 states the

piunishment for giving false evidence in any stage of a judicial A proceeding or fabricating false evidence for the purpose of being used in any stage of judicial proceeding. Section 191 defines the • offence of giving false evidence and s. 192 the offence of fabricating false evidence.

We. may ignore s. 191 .because here ad mittedly there is no giving of false evidence as defined i11 the Penal Code. The offe11ce of fabricating false evidence comes into B existence when a person causes any circumstances to exist or makes any false entry in any book or record or makes any document containing a false stateinent intending that such circumstance, false entry or false statement may appear in evidence i11

a judicial proceeding etc. and so appearing cause an erroneous opinion be formed touching a point material to the result of such C proceeding. The offence ls a general one and does not specify the person or the kind of document. It may be any person and the fabricated evidence may be In any form. Section 218 on the

othe~ hand deals with the Intentional preparation of a false record by a public servant with the object of saving or Injuring any person or property. The difference between the two sections is clearly noticeable. Section 192 deals wi:th judicial proceeding and .D the false evidence is intended to be used in a judicial proceeding.

Section 218 deals with public servants and there the gist is the intentional preparation of a false record with a view of saving ol' injuring any person or property. This need not have relation to a judicial proceeding as such.

The bar of s. 195 of the Code of Criminal Procedure which was invoked by Hnri Nath Singh arises thus. No Court can take cognizance of an offence under s. t 93 when such offence is alleglld to have been committed In or in relntlon to any proceeding in any Court except on the complaint In writing of such Court. 'Jn these cases, Harl Nath Singh is charged wlth abetment of three

offences committed by three public servant~ namely the two Lekh pals who have caused the preparation of an incorrect Khnsra knowing it to be likely that they would thereby cause loss or injury to Kamla Prasad Singh and the other vendees. Hari Nath Singh is charged in the third case with abetment of the act of the Ahlmad who is allegeu to have intentionally made a false entry about the case intending that the false entry should be used in a judicial proceeding and wrong opinion be formed about the date of the institution of the proceeding.

It will appear from this that tho alleged offence committed by the Ahlmad wns clearly in or in relation to n proceedinr; 'in Court.

In fact he made an incorrect entry about u cse actually in Court with the Intention tht the dute of the Institution of the proceeding may be taken to be November 9, t 962 nltbouv:h the case was alleged to be Instituted after December 4. 1962.

K. P. SINGH v. H. N. SINGH (Hida.vatul/a/1, 1.) 831

His offence (if any be proved against him) would fall within s. ·

192. Section 192 deals with fabrication of false evidence to be usei!'in a judicial proceeding so as to cause an erroneous opinion to be formed on a material point. Section 192 therefore com pletely covers the case against Ahlmad, and must cover the case of Hari Nath Singh the alleged abettor. Section 218 Indian Penal Code does not apply in this case, because the record was not made with the object of saving or injuring any person or property. The offence of s. 192 Indian Penal Code is punishable under s. 193 Indian Penal Code and the latter section is one of the sections mentioned ins. 19S(l)(b) of the Code of Criminal Procedure, the gist of which has been reproduced above. The decision of the High Court was therefore right that the Court could not take cognizance of the offence alleged against the Ahl mad and his abettor, because the offence was fabricating of false evidence in a case which wu in fact pending and the false entry was made with the object that an erroneous opinion be formed on a material point. Such a case could only be instituted by a Court in which or in relation to which this offence was committed and a private complaint was therefore incompetent.

The alleged offence against the Lekhpals and their abetr Hari Nath Singh in the other two cases is of a different order. The offence of s. 218 Indian Penal Code is not a minor offence, included within s. 192. It Is a distinct offence which can be proceeded against without the bar of s. 195 of the Code of Criminal Procedure. There is some resemblance between s. 192 and s. 218 tndlan Penal Code, because both deal with the preparation of a false record. There the resemblance ceaes. Whereas In s. 192, the record is prepared for use In a judicial proceeding with the Intention that an erroneous opinion be formed regarding a mate rial point, the offence In s. 218 Is the preparation of a false record by 11 public servant with the intention of saving or injuring any person or property. The intention here was to save the property from the vendees namely Kamla Prasad Singh and others. The

olfenc~ v.:as co.mplete e moment the false record was made with th.e said mtentton and 1t was not necessary for the completion of thts offence that the record should be used in a judicial proceeding

so to caue an erroneous opinion to be formed touching on G a point .material to te. result of such proceeding. In the Ahlmad's case this latter cond111on Y:"as the. most Important ingredient. In the case of the Lekhpals, 1t was immaterial whether the record would be produc~ in a judicial proceeding or not so as to cause an erroneous opinion to be formed. The intention wa~ to save

thf e property from the effects of the sale and the preparation of the H alse record was therefore sufficient from this point of view In other words, the offence of the Lekhpals (If anv be p; oved

l\&alnst them) wpuld fall within s. 218 and not s. t 92/ 193 of the Indian Penal Code. It may fall Jn the latter sections If the entry

can be said to be in or in relation to a Court. This cannot be said of the entries in the Khasra. As s. 218 is not named in s. 195 of the Code of Criminal Procedure, the private complaint of Kamla Prasad Singh could be entertained by the Court and there was no bar.

To hold that a record such as is contemplated in s. 218 Indian Penal Code is always one intended for use in a Court would put s. 218 Indian Penal Code in s. 195 of the Code of Criminal Procedure which the Code of Criminal Procedure has not thought of.

Therefore s. 218 Indian Penal Code must be treated as an independent and distinct offence.

There could be a private complaint in respect of an offence under s. 218 Indian Penal Code.

The result is that the case against Hari Nath Singh of abetment of the act of the Ahlmad could not begin except on a complaint in writing of the Court concerned.

There was no bar to the commencement of the case against Hari Nath Singh and the two Lekhpals on the private complaint of Kamla Prasad Singh.

Accordingly Criminal Appeal No. 244 of 1964 shall be dismissed.

Criminal Appeals Nos. 245-246 of 1964 shall be allowed and the concerned cases will be remitted to the Court of first instanc~ for trial according to law.

Y.P.

Appeal No. 244 dismissed.

Appeals 245-246 allowed.

KAMLA PRASAD SINGH

A

HARi NATH SINGH & ANR

Ss. 192

S. 195

s. 2

Lekhpal

Cr.P.C.

Cr.P.C.

Ahlmad

Lekhpals

I.P.C.

I.P.C.

Cr.P.C

s. 193

s. 195

Cr.P.C

W. S. Barlingay

J. C. Jalwar

R. L. Kohli

J. P. Goyal

R. B. Pathak

Hidayatullab

Kamla Prasad Singh

Harinath Singh

s. 218

Indian Penal Code

Harinath

Mangla Prasad Pandey

Ramchander Lekhpal

V !Uage Balua

Ram Samravlal Lekhpal

Cholapore

Nankoo

Mehar Singh

Stimitra

Ajudhia Singh

December 4, 1962

Kamla Prasad Singh

Kamla Prasad

Jamaband

November 9, 1962

Bhagwati Singh

Bhagwati

Birbalpura Kaswal Raja

s. 561

Code of Criminal Procedure

s. 193

s. 195

Code of Criminal Procedure

Han Nath Singh

s. 193

s. 218

Indian Penal Code

Section 193

Section 191

s. 192

s. 191

Penal Code

Section 218

Section 192

Section 218

s. 195

Code of Criminal Procedure

Hnri Nath Singh

Harl Nath Singh

Hari Nath Singh

December 4. 1962

Section 192

Section 192

Section 218

Indian Penal Code

s. 192

Indian Penal Code

s. 193

Indian Penal Code

Code of Criminal Procedure

s. 218

Indian Penal Code

s. 192

s. 195

Code of Criminal Procedure

s. 192

s. 218

Penal Code

s. 192

s. 218

s. 218

Indian Penal Code

s. 218

s. 195

Code of Criminal Procedure

s. 218

Indian Penal Code

s. 218

Indian Penal Code

s. 195

Code of Criminal Procedure

Code of Criminal Procedure

s. 218

Indian Penal Code

s. 218

Indian Penal Code


KALAWATI DEVI HARLALKA

COMMISSIONER OF INCOME-TAX, WEST BENGAL & ORS.

May 1, 1967

[J. C. SHAH, S. M. SlKR! AND V. RAMASWAMI, JJ.)

Income-tax Act, 1961, ss. 297 and 298-Commissionu issuing notice of revision of assessment under s. 33B of the Income-tax Act, 1922whether such proceedings covered by the expression "proceedings for the

assessment" in , .. 297(2) (a)-S. 6 General Clauses Act, 1897-Effect of s. 298 and the Income-tax (Remol'al of Dilfu:ulties) Orders, 1962-ValidilY of.

The appeljant received a notice on January 24, 1963 from the Commissioner of Income-tax, We.t Bengal, initiating a revision under s. 33B of the Income-tax Act, 1922, of her asse.sments for the years 19S2-S3

to 1960-61. The appellant thereupon filed a petition in tlie High Court under Art. ~26 of the Constitution ?raying that the notice be quashed and the 1espondent restrained from giving effect to it.

A single Bench of the High Court dismissed the petition and an appeal to a Division Bench was also dismissed.

It was contended on behalf of the appellant (i) that the Income-tax Act, . 1922, having been repealed by the Act of 1961 which came into force on April 1, 1962 the respondent had> no power, authority or jurisdiction to initiate the proceedings under s. 33B of the 1922 Act; (ii) that •. 6 of the General Clauses Act, 1897, did not authorise the initiation of t'he proceedings inasmuch as no steps were taken in respect thereof while the 1922 Act was in force; (iii) that s. 298 of the 1961 Act wa.<

void; and in any event, the powers under the SCl'tion, under which the Government promulgated the Income-tax (Removal of Difficulties) Order

1962, clause 4 of which purported to cover a case like the present one, can be exercised only in respect of the matters dealt' with in s. 297 of that Act which docs not deal with proceedings tinder s. 33B of the 1922 Act.

HELD: (i) The procecdin~< initiutcd hy the respondent were valid as they were covered hy the exptession "proceedings for £h.c ,,; sessment of that person" in Clause (a) of s. 297(2) of th~ 1961 Act. [84\E; 846B]

The word "assessment" can cear a very eomprehensive meanin~; lt can comprehend the whole procedure for ascertaining and imposing ltability upon the tax-payer, There was nothing in the context of s. 297 which required the expression ."procedure for the assessment" to be given a narrower meaning.

S. 297 is meant to provide as far as possible for all contingencies which may arise out of the repeal of the 1922 Act

[845A-CJ '

Cou1111i.\sio11er of lnco111eu1x, Bonibay v. Khen1cha11d Ramdas, 6 l.T.R. 414 at p. 423; A. N. Lakshman Shenoy v. Income-tax Officer, Ernakul1un, 34 l.T.R. 275 at p. 291; C. A. Abraham v. lllcome-tax Oli cer, Kottt!Y"!!'• 41 I.T.R. 425 at pp. 429·430; Commlssi01ier of Incometax v. Bh1ku11 Dadabhal & Co., 42 J.T.R. 123 at p. 127; Commissioner of lncome-t11.t v. Patlala. C•m•11t Co, Ltd., 32 I.T.R. 333; Bl1al/al Amin & Sons Ltcl, ,., R. P. Dalal, 24 l.T.R. 229, referred to.

(ii) S. 6 of the General Clauses Act would not apply because s.

A 297(2) evidences an intention to the contrary by providlilg for many matters, some in accord with what would have been the result under s, 6 nnd some contrary to such a rasult. l846A]

Union of JndiG v,, Madan Gopal Kahrtl, 25 I.T.R. SB, referred to.

(Iii) Section 298 of the 1961 Act is 'valid and the present case was covered by cl. 4 of the Income-tax (Removal of Difficulties) Order, B

1962. [846 CDJ

Jalan Trad/1111 Company (Prlvt1tt) Ltd. v. Mill Mazdoor Un/011, [1!166] II L.L.J, 546; Commlssl1Jner of lncomt-ltu: v, Dewan Bahadur

Rmngopal Miiis, 41 I.T.R. 280 and Pandit Banarsl Das Bhanot v. Stall of Madhya PradtJ'il, 9 S.T.C. 388, referre\I to.

C1v1L APPELLATE JURISDICTION : Civil Appeal No. 1421 of C 1966.

Appeal from the judgment and order dated December 8, 1964 of the Calcutta High Court in Appeal from Original Order No. 281 of 1963, Debi Pal, R. K. Chaudhuri and B. P. Maheshwarl, for the D appellant and the Intervener.

D. Narsaraju and R. N. Sachthey, for respondents Nos. l and 2.

The Judgment of the Court was delivered by Slkrl, J, On January 24,' 1963, the Commissioner of Incometax, West Bengal, sent the following notice to Smt. Kolawati Harlalka, appellant before us, hereinafter referred to as the assessee :

"Sub : lncometax assessments of 1952-53 to 1960•61. Assessments erroneous and prejudicial to the interests of revenue-Revision of assessments under

Section 3 3 B of the Indian Income-tax Act 1922proposal for-Notice regarding.

On calling for and examining the records of your case for the assessment years 1952·53, 1953-54, 1954.

SS, 1955-56, 1956-57, 1957-58, 1958-59, 1959-60 and 1960'6 l and other connected records, I consider that the orders of assessment passed by the Income-tax Officer 'D' Ward, Howrah, on 7th February, 1961, are erroneous in so far as they are prejudicial to the inte rests of revenue for the following reasons amongst others.

2. Enquiries made have revealed that no business as alleged was carried on from the address declared in the returns, Also the said Income-tax Officer wns riot justi lied In ncceptin~ the initial capital, the ucquiition and

KALAWATI DE\'! I'. c.I.T. (Slkrl, I.)

sale of jewellery, tho income from business, gift mado by you etc. without any enquiry or evidence whatso ovor.

3. I, therefore, propose to pass suoh orders thereon as the circumstances of the cases justify after giving you an .opportunity of being heard under tho powers vested in me under Section 33B of tho Income-tax Act, 1922.

The cases will be heard at 11 a.m. on 1st February,

19613 at my above office when you are requested to produce the necessary evidence in support of your con tcntions. Objections in writing accompanied by neces sary evidence, if any, received on or before the appoint men! for personal hearing will also be duly considered.

Please note that no adjournment of the hearing will be granted."

The assesscc on February 1, 1963, protested to the Commissioner against the issue of the notice and stated that tho said notice was absolutely bad in law, illegal and void. On the same date the D assesscc filed an application under Art. 226 of the Constitution in tho High Court at Calcutta, Inter alla prayh:ig that tho said notice, dated January 24, 1963, be quashed or set aside and the Commissioner of Income-tax be restrained from giving olfect to the said notice.

The petition was heard by Banerjee, J., and

three points were urged before hhn :

(1) That the Income-tax Act, 1922---hereinafter referred to as the 1922 Act-having been repealed by Income-tax Act, 1961 -hereinafter referred to as the 1961 Act-which came into force on April 1, 1962, the Commissioner of Income-tax had no power. authority or jurisdiction to initiate the proceedings under s. 33B of the 1922 Act;

(2) Section 6 of the General Clauses Act in no way authorises the initiation of the said proceedings inasmuch as no steps

were taken in respect thereof when the 1922 Act was in force

and/ or p, rior to its repeal; and

( ~) T_he powers under s. 298 of the 1961 Act can only be exercised m espect of the matters dealt with by s. 297 of the 1961 Act which does not deal with proceedings under s. 33B of the 1922 Act.

In order to appreciate the grounds and the findings of the Ieam.e? Judge, it is necessary to set out the relevant statutory

prOVISIODS.

."S. 33B (1922 Act). l'ower of Commissioner to reyts.e Income-tax Officer's orders.-( 1) . The Comnuss1oner may call for and examine the record of. any

proceeding under this Act and if he considers that any A order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, B including. an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.

(2) No order shall be made under sub-secti.on (1)

(a) to revise an order of re-assessment made under c the provisions of section 34; or

( b) after the expiry of two years from the date of the order sought to be revised. . ..... ''

"S. 297. (1961 Act). Repeals and savings. ( 1) The Indian Jincome-tax Act 11 of 1922, is hereby re- D pealed.

( 2) Notwithstanding the Income-tax Act, 11 of 1922 as the repealed Act),- . .

repeal of the Indian (hereinafter referred to

(a) where a return of income has been filed before the commencement of this Act by any person for any assessment year, proceedings for the assessment of that person for that year may be taken and continued as if this Act had not been passed;

(b) where a return of income is filed after the commencement of this Act otherwise than in pursuance of a notice under section 34 of the repealed Act by any person for the assessment year ending on the 31st day of March. 1962, or any earlier year, the assessment of that person for that year shall be made in accordance with the procedure specified in this Act;

( c) any proceeding pending on the commencement of this Act before any income-tax authority. the appellate tribunal or any court, by way of appeal, reference or revision shall be. continued and disposed of as if this Act had not been passed;

( d) where in respect of any assessment year after the year ending on the 31st day of March, 1940,-

( i) a notice under section 34 of the repealed Act had been issued before the commencement of this Act,

K~LAWATI DEVI v. c.I.T. (Sikri, I.)

the proceedings in pursuance of such notice may be continued and disposed of as if this Act had not been passed;

(ii) any income chargeable to tax had escaped assessment within the meaning of that expression in section 147 and no proceedings undersection 34 of the repealed Act in respect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions contained section 149, or section 150, be issued with respect to that assessment year and all the provisions of this Act shall apply accordingly;

( e) section 23A of the repealed Act shall continue to have effect in relation to the assessment of any company or its shareholders for the assessment year ending on the 31st day of March, 1962, or any earlier year, and the provisions of the repealed Act shall apply to all matters arising out of such assessment as fully and effectually as if this Act had not been passed;

(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;

(h) any election or declaration made or option exercised by an assessee under any provision of the repealed Act and in force immediately before the commencement of this Act shall be deemed!'to have been an .election or declaration made or option exercised under the corresponding provision of this Act;

(i) where, in respect of any assessment completed before the commencement of this Act, a refund falls due after such commencement or default is made after such commencement in the payment of any sum due under such completed assessment, the provisions of this Act relating to interest payabfe by the Central Government on refunds and interest payable by the assessee for default shall apply; .

(j) any sum payable by way of income-tax, supertax, interest, penalty or otherwise under the repealed Act may be recovered under this Act, but without pre judice to any action already taken for the recovery of such sum under the repealed Act;

(k) any agreement entered into, appointment made, approval given, recognition granted, direction, instruc tion, notification, order or rule issued under any provi sion of the repealed Act shall, so far as it is not inconsistent with the corresponding provision of this Act, be deemed to have been entered into, made, granted, given or issued upder the corresponding provision aforesaid and. shall continue in force accordingly;

(1) any notification issued under sub-section ( 1) of section 60 of the repealed Act and in force immediately before the commencement of this Act shall, to the extent to which provision has not been made under this Act, continue in force until rescinded by the Central Government;

(m) where the period prescribed for any applica tion, appeal, reference or revision under t)).e repealed Act had expired on or before the commencement of this Act, nothing in the Act shall be construed as enabling any such application, appeal, reference or revision to be made under this Act by reason only of the fact that a longer period therefor is prescribed or provision is made for extension of time in suitable cases by the appropriate authority."

"S. 298(1961 Act). Power to remove difficulties. ( 1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by general or special order, do anything not inconsistent with such provisions which appears to it to be necessary or expeditious for the purpose of removing the difficulty.

(2) In particular, and without prejudice to the generality of the foregoing power, any such order may provide for the adaptations or modifications subject to which the repealed Act shall apply in relation to the assessment for the assessment year ending on the 31st day of March, 1962, or any earlier year."

"S. 6. (The General-Clauses Act).

Where this Act, or any (Central Act) or Regulation made after the commencement of this Act, repeals any

K~LAWATI DEVI\'. C.I.T. (Sikri, /.)

enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not. ........... "

In exercise of the powers conferred under s. 298, the Central Government issued the Income-tax (Removal of Difficulties) Order, 1962, which was published in the Gazette of India on August 8, 1962. Clauses 2, 3 and 4 of the said order read a~ follows:

"2. Registration anti refund proceedings to be regarded as part of Assessment Proceedings :- For the purpose.~ of clauses (a) and (b) of subsection (2) of section 297 of the Income-tax Act, 1961 (43 of.1961) (hereinafter referred to as the repealing Act), proceedings relating to registration of a firm or a claim for refund of tax shall be regarded as a part of the proceedings for the assessment of the person concerned for the relevant assessment year.

3. Completion of assessments in cases covered by section 297(2)(b) of the repealing Act.- In cases covered by clause (b) of sub-section (2) of section 297 of the repealing Act, the assessments shall be made, inter a/ia, in accordance with the procedure specified in the following sections of the repealing Act, in so far as they may be relevant for this purpose;

Sections 13 l to 136, 140 to 146, 153 [except subsection ( 2) and clause (iii) of sub-section ( 3) ], 156 to 158. 185, 187 to 189, 282 to 284 and 288.

4. Avpeal, reference or revision /JrOCeedings in respect of orders passed u1Uier the revealed Act.-(1) Proceedings by way of the first or subsequent appeals, referen'e or revision in. respect of any order made under the Indian Income-tax Act, 1922 ( 11 of 1922) (hereinafter referred to as the repealed Act) shall be instituted and disposed of as if the repealing Act had not been passed. ( 2) Any such proceedings instituted under the repealing Act after the 31st day of March, 1962 and before the date of this Order shall be deemed to' have been instituted under the repealed Act and shall be disposed of as if the repealing Act had not been passed; Provided that if any such proceeding has been dis- P_Osed of before th~ date of .this Order under any provision of. the repeahng Act, 1t shall be deemed to have been disposed of under the corresponding provision of

l9Sup.Cl/67~~-l 'l

the. repealed Act and any appeal, reference or revision A. in respect of the proceeding so disposed of shall be instituted and disposed of as if the repealing Act had not been passed."

The learned Judge held that the expression "proceedings for the assessment" in s. 297(2)(a) of the 1961 Act had a comprehen- B sive meaning and included proceedings under s. 33A or s. 33B of the 1922 Act.

He also held that clauses

(c) and

(d) of s. 297 ( 2) of the 1961 Act must be deemed to have been enacted by way of abundant caution.

Ln view of his findings, he did not consider it necessary to determine whether s. 6 of the General Clauses Act saved the power under s. 33B of the 1922 Act, but ~~ed: c

"If it had been necessary so to do, I would have no hesitation in holding that such power would be saved under Section 6 clauses ( c) and ( e) of the General Clauses Act, there being no indication to the contrary in the repealing Act of 1961." D

He accordingly dismissed the petition.

The assessee appealed and the Division Bench dismissed the appeal.

The Division Bench came to the conclusion that "the provision for assessment are contained in Chapter IV of the Act of 1922 and section 33B finds place in this Chapter and the expression "proceedings for the assessment" indicates that any of the proceedings relating to assessment as contemplated in Chapter IV can be initiated and continued under clause (a) of subsection (2) of stion 297 including the proceeding by way of Revision under section 33B of the Act." The Division Bench repelled the contention of the assessee that cl. ( c) affected the scope of cl. (a). It concluded . that els .. ( d) and ( f) had been inserted by way of abundant caution. It also repelled the contention that cl. ( 4) of the Income-tax (Removal of Difficulties)

Order, 1962, was bad, and observed that "what clause ( 4) has done is simply to make explicit what was implicit in clause (a) and it is with the object of removing the doubt or difficulty, if any, existing in respect of the construction of clause (a) of section 297(2) that a specific provision like clause (4) was introduced in the Removal of Difficulties Order." In view of these conclusions the Division Bench felt that "it is not necessary to express any definite opinion on the point whether section 6 of the General Clauses Act 1897, is available for the purpose of interpreting the provisions of the Act of 1961." In the result the appeal before the Division Bench failed and was dismissed. The assessee having obtained a certificate of fitness under Art. 133 of the Constitution, the appeal is rtow before us.

KALAWATI DEVI v. c.I.T. (Sikri, I.) 84!

The learned counsel for the assessee contends that the expres- ; ion "proceedings for the assessment" ins. 297(2)(a) of the 1961 Act meant original proceedings for the assessment of a person and not appellate or revisional proceedings.

He says that Parliament has left the question of appeal and revision to be determined by the application of s. 6 of the General Clauses Act. He further says that the word "assessment" has not been used in its wide sense because Parliament has provided for the imposition of penalty in els. (f) and (g), which ordinarily falls within the wide

e.nse of "assessn1ent".

It has also provided for what is to happen to pending proceedings in cl. ( c). He urges that the High Court erred in holding that these sub-clauses had been added by way of abundant camion.

The learned counsel for the respondent, Mr. S. T. Desai, contends thats. 297(2) (a) is comprehensive in its scope and amplitude to include any proceedings under s. 33B of the 1922 Act.

He further says that s. 6 of the General Clauses Act will apply to the extent there is no contrary intention in s. 297 (2) of the 1961 Act.

He finally contends that even if there is any doubt regarding the scope of cl. (a) it is removed by the Removal of Difficulties Order issued under s. 298.

It seems to us that the High Court is right in holding that s. 297(2) (a) of the 1961 Act includes with its scope a proceeding under s. 33B of the 1922 Act. There is no doubt that the word

'.'assessment" does have subject to the context a very wide meanmg.

The Privy Council in Commissioner of Income Tax, Bombay v. Khemchand Ramdas(') observed :

"In order to answer them, it is essential to bear in mind the method prescribed by the Act making an assessment to tax, using the word assessment in its comprehensive sense as including the whole procedure for imposing liability upon the tax payer."

I~ A., N. Lakshman Shenoy v. Income-tax Officer, Ernakulam ( ') this Court held :

"Now the question is in what sense has the word

"ssessment" been used !n section 13 ( 1) of the Fmance Act, 1950. T\yo circumstances may be noticed

at one~. The long. utle says that the Finance Act. 1950, 1s an Act to give effect to the financial proposals of te Central Government for the year beginninn on Apnl 1, 1950, and in section 13(1) the collocatio"n of . the words_ is le'IY, assessment and collection of income-

' I J 6 l.T.R. 414 at p.423. (2J 3• f.T.R. 27; at p. 291.

SUPREME COURT REPORT~

[1967] 3 S.C.R,

tax". In our opinion, both these circumstances point towards a comprehensive meaning; for it could not have been intended, as part of the proposal of the Central Government, that those whose income had totally escaped assessment should be liable but those who had been under-asse.ssed should go scot free.

We can see nothing iii. the words of the section which would Justify such a distinction; we say this quite apart from the argument that section 13 ( 1 ) should be interpreted in consonance with the financial agreement entered int<l between the Rajpramukh and the President, an argument to which we shall presently advert. Moreover, the collocation of the words, "levy, assessment, and collection" indicates that what is meant is the entire process by which the tax is ascertained, demanded and realised."

Jn C. A. Abraham v. Income-tax Officer, Kottayam(') this Court observed :

"A review of the provisions of Chapter IV of the Act sufficiently discloses that the word "assessment" has been used in its widest connotation in that Chapter.

The title of the chapter is "Deductions and Assessment". The section which deals with assessment merely as computation of income is section 23; but several sections deal not with computation of income, but determination of liability, machinery for imposing liability and the procedure in that behalf. Section 1 BA deals with advance payment of tax and imposition of penal ties for failure to carry out the provisions therein.

Section 23A deals with power to assess individual members of certain companies on the income deemed to have been distributed as dividend, section 23B deals with assessment in case of departure from taxable territories, section 24B deals with collection of tax out of the estate of deceased persons, section 25 deals with assessment in case of discontinued business, section 25A with assessment after partition of Hindu undivided families and sections 29, 31, 33 and 35 deal with the issue of demand notices and the filing of appeals and for reviewing assessment and section 34 deals with assessment of incomes which have escaped assessment. The expression "assessment" used in these sections is not used merely in the sense of computation of income and there is in our judgment no ground for holding that when by section 44, .it is declared that the partners or members of the association shall be jointly and severally liable to assessment, it is only intended to declare the

(I )'"\il.T.R. 425 at pp. 429-43~.

KALAWATI DEVI r. c.1.T. (Sikri, J.)

liability to computat•on of income under section 23 .and not to the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof."

In Commissioner of Income-tax v.

Bhikaji Dadabhai & Co. ( ') this Court quoted with approval the observations regarding the word "assessment" in Abraham v. lncnmctax Officer(").

In Commissioner of Income-tax v. Pa11ala Cement Co. Ltd. (3) a similar question arose. The question was whether under s. 13 of the Finance Act, 1950, the appeals in respect of assessments for 1949-50 would be governed by the Pa!iala Income-tax Act, 2001, or by the Indian Income-tax Act.

We may here set out s. 13 of the Finance Act, 1950 :

"If immediately before the 1st day of April, 1950. there is in force in any Part B State other than Jammu and Kashmir or Manipur, Tripura or Vindhya Pradesh or in the merged territory of Cooch-Behar any law relating to income-tax or super-tax or tax on profits of business, that law shall cease to have effect except for the purposes of the levy, assessment and collection of income-tax and super-tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income-true Act, 1922 (XI of 1922) for the year ending on 31st day of March. 1951, or for any subsequent year, or, as the case may be, the levy, assessment and collection of the tax on profits of business for any chargeable accounting period ending on or before the 31st day of March, 1949."

This Court held that it is the provisions of the Patiala Act 200 l that applied. No point was raised that in any event the Patialo Act having ceased to have effect, the provisions dealing with appeals were not concerned with the levy, assessment and collection of income-tax .

. In Bhai/al Amin & Sons Ltd. v. R. P. Dalal(') the Bombay High Court (Chaglu, C.J .. & Shah J.), interpreting s. 7 of the Taxation Laws (Extension to Merged States and Amendment) Act (~XVl'I of 1949) the relevant portion of which is in th<: followmg terms :

"7. ( 1) lf, immediately before the 26th day of August, 1949, there was in force in any of the merged Stat.es any law relating to income-tax, super-tax, or

usmes~ profits_ta~ •. that law shall cease to have effect

Cl) 42 l.T.R. 123 at p. 127.

(3) 321.T.R. 333.

(2) 41 l.T.R.425

(4) 24 f.T.R. 22~

except for the purposes of the levy, assessment and collection of income-tax, and super-tax in respect of any period not included in the previous year . for the purposes of assessment under the Indian Income-tax Act, 1922, as extended to that State by Section 3, or, as the case may be, the levy, assessment and collection of business profits tax for any chargeable accounting period ending on or before the 31st day of March, 1948, and for any purposes connected with such levy, assessment or collection . . . . . . .. "

observed:

"It is urged by Mr. Palkiwalla for the petitioners that the words "levy, assessment and collection" do not include a right of appeal against the assessment order and the Baroda law did not continue to apply to any rights of appeal that the petitioners might have had in respect of the order of assessment.

In the first instance this argument appears to roe to be a perfectly futile argument, because, if I were induced to take such a 'view of the section it would leave the petitioners without any right of appeal at all. If the Baroda Act ceases to apply and obviously the Indian Act does not apply to the assessments of accounting years prior to the accounting year 1948-49, there is no right of appeal; and the petitioners could not have gone to the Tribunal at all, for there is no other section or sections which confer any right of appeal under the Indian Income-tax Act, in respect of assessments made under the Baroda Act.

But, apart from this, in my opinion the words "for the purposes of .levy, assessment and collection of incometax" include all procedure for .the levy, assessment and collection of income-tax, for without the procedure there can be no levy, assessment or collection; and taking in particular "assessment" with which we are concerned on this petition the assessment is not final until all remedies by way of appeals which are given by the Act are exhausted.

This view is emphasized by the concluding words of sub-section ( 1) which are "for any purposes in connection with such levy, assessment and collection." There can in any event be no doubt that the procedure for assessment including rights of appeal are included in the words "purposes connected with assessment." In my opinion. therefore. the true construction of sub-section ( 1 ) of section 7 is that the Baroda Act continues to apply to the assessments of the petitioners even as regatds the right of apeal which was given under that Act to the Huzur Adalat."

KALAWATI DEVI v. C.I.T. (Sikri, J.) 8 45

ll It is quite clear from tbe authorities cited above tbat the word "assessment" can bear a very comprehensive meaning; it can comprehend the whole procedure for ascertaining and imposing liability upon tbe tax-payer.

Is tbere then. any thing in the context of s. 297 which compels us to give to tbe expression "procedure for the assessment" the narrower meaning suggested by the 8 learned counsel for the appellant? In our view, the answer to tbis question must be in tbe negative. It seems to us that s. 297 is meant to provide as far as possible for all contingencies which may arise out of the repeal of the 1922 Act. It deals witb pending appeals, revisions, etc. It deals witb non-completed assessments pending at tbe commencement of the 1961 Act and assessments to be made after the commencement of the C 1961 Act as a result of returns of income filed after the commencement of tbe 1961 Act. Then in cl. (d) it deals with assessments in respect of escaped income; in els. (f) & (g) it deals with levy of penalties; cl. (h) continues the effect of elections or declarations made under the 1922 Act; cl. (i) deals with refunds;

cl. (j) deals with recovery;

cl. (k) deals generally D with all agreements, notifications, orders issued under the 1922 Act; cl. (1) continues the notifications issued under s. 60 ( l) of the 1922 Act and cl. (m) guards against the application of a longer period of limitation prescribed under the 1961 Act to certain applications, appeals, etc.

It is hardly believable in this context that Parliament did not think of appeals and revisions in It respect of assessment orders already made or which it hacl autho- . rised to be made under cl. (a) of s. 297(2).

:J{

The learned counsel for the appellant submits tbat Parliament had s. 6 of the General Clauses Act in view, and therefore no express pro".ision was made dealing with appeals and revisions, etc. In our view, s. 6 of tbe General Clauses Act would not apply ?ecause s .. 297(2) evidences an intention to the contrary.

In Union of India v. Madan Gopal Kabra(') while interpreting s. 13 of the Finance Act, 1950, already extracted above thi~ Court observed at p. 68 : ' ·

"Nor can Section 6. of the General Clauses Act. 189?, serve to keep alive the liability to pay tax on the income of the year 1949-50 assuming it to have

ccru:i<1 nder the repealed State law, for a ''different 1tention clearly appears in Sections 2 and 13 of the Finance Act read together as indicated above,"

It is true that whether a different intention appears or not must depend on the language and content of s 297(2) It. us however that b 'd' , · seems to • •.

Y P~OVI mg ior so many matters mentioned above,_ soll_!ccord with what would have been the result under

(I) 25 l.T.R. 58.

s. 6 of the General Clauses Act and some contrary to what would have been the result under s. 6, Parliament has clearly evidenced

an intention to the contrary.

If s. 6 of the General Clauses Act is out of the way, there is no doubt that Parliament should not be credited with the intention of not providing for appeals and revisions, etc. against the asse-ssment orders made under the 1922 Act.

In this context, we must give the expression "proceedings for the assessment of that person" in cl. (a) of s. 297(2) a very comprehensive meaning.

At any rate, if the Income Tax (Removal of Difficulties) Order, 1962, is valid, para 4 of the said order clearly covers tlw present case and would give jurisdiction to the Commissioner to issue the impugned notice.

Relying on Ja/an Trading Company (Private) Ltd. v. Mill Ma:.door Union(') the learned counsel for the appellant urges that s. 298 is void.

In our view, the present case is covered by the decision of this Court in Commissioner of Jncomelax v.

Dewan Bahadur Ramgopal Mills(") where a similar order ca!fod

the Taxation Laws (Part B States) (Removal of Difficulties\ Order, 1950, made under s. 12 of the Finance Act, 1950, wa> upheld.

Section 12 read as follows : "If any difficulty arises in giving effect to the provisions of any of the Acts, rules or orders extended by section 3 or section 11 to any State or merged territory, the Central Government may, by order, make such provision, or give such direction, as appears to it to be necessary for removing the difficulty."

S. K. Das, J., speaking for the Court observed at p. 288 :

"Furthermore, the true scope and effect_ of section 12 seems to be that it is for the Central Government to determine if any difficulty of the nature indicated in the section has arisen and then to make such order, or give such direction, as appears to it to be necessary to remove the difficulty. Parliament has left the matter to the executive; but that does not make the notification of 1956 bad.

In Pandit Banarsi Das Bhanot v. State of MfU/hya Pradesh(") we said at p. 435 : "Now, the authorities are clear that it is not unconstitutional for the legislature to leave it to th-e executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be .laid, the rates a't which it is to be charged in respect of different classes of goods, and the like." We are, therefore. {t)[i966j ll L. L.J. 546-:---

(3) 9 S.T.C. 388.

(2l 41 l, T.R. 28 l.

ltALAWAn DEVI v. C.I.T. (Sikri, /.)

of the view that the notification of 1956 was validly made under section 12 and is not ultra vires the powers conferred on the Central Government by that section."

It is true that in that case the attack was on the notification and not on the section itself, but it seems to us that the ratio given by the Court is appropriate to cover the validity of the section itself.

Furthennore, the tenns of s. 37 of the Payment of Bonus Act, 1965 are different and the Bonus Act is not a taxing law.

In the result the appeal fails and is dismissed with costs.

R.K.P.S.

Appeal dismissed ..

KALAWATI DEVI HARLALKA

C. SHAH

V. RAMASWAMI, JJ.

Income-tax Act, 1961

ss. 297 and 298

s. 33B

Income-tax Act, 1922

S. 6

General Clauses Act, 1897

s. 298

s. 33B

Income-tax Act, 1922

S3

to 1960

Income-tax Act

April 1, 1962

s. 33B

General Clauses Act, 1897

s. 298

clause 4

s. 297

s. 33B

s. 297(2)

s. 297

S. 297

S. 6

General Clauses Act

Section 298

cl. 4

Debi Pal

R. K. Chaudhuri

B. P. Maheshwarl

D. Narsaraju

R. N. Sachthey

Slkrl

Kolawati Harlalka

Section 3

Indian Income-tax Act 1922

7th February, 1961

Section 33B

Income-tax Act, 1922

1st February,

19613

February 1, 1963

Art. 226

High Court at Calcutta

January 24, 1963

Banerjee

That the Income-tax Act, 1922

s. 33B

Section 6

General Clauses Act

s. 298

s. 297

s. 33B

S. 33B

section 34

S. 297

Notwithstanding the Income-tax Act

section 34

31st day of March.

section 34

section 147

section 34

section 148

section 149

section 150

section 23A

1st day of April, 1962

Central Government

section 60

S. 298(1961 Act)

31st day of March, 1962

S. 6

s. 298

section 297

Income-tax Act, 1961

section 297(2)(b)

section 297

Sections 13

Avpeal

Indian Income-tax Act, 1922

s. 297(2)(a)

s. 33A

s. 33B

s. 297

s. 6

General Clauses Act

s. 33B

Section 6

General Clauses Act

Chapter IV of the Act

section 33B

section 33B

section 297(2)

section 6

General Clauses Act 1897

Art. 133

Parliament

s. 6

General Clauses Act

S. T. Desai

s. 33B

s. 6

General Clauses Act

s. 297

s. 298

s. 297(2)

s. 33B

section 13

Fmance Act, 1950

section 13(1)

section 13

Rajpramukh

Chapter IV of the Act

section 23

Section 1

Section 23A

section 23B

section 24B

section 25

section 25A

sections 29, 31, 33 and 35

section 34

section 44

KALAWATI DEVI

Sikri

section 23

s. 13

Finance Act, 1950

Income-tax Act

Income-tax Act

s. 13

Finance Act, 1950

1st day of April, 1950

Jammu and Kashmir

Manipur

Tripura

Vindhya Pradesh

Cooch-Behar

Indian Income-true Act, 1922

31st day of March, 1949

Bombay High Court

Chaglu

Shah

s. 7

Indian Income-tax Act, 1922

Section 3

31st day of March, 1948

Palkiwalla

Income-tax Act

section 7

Huzur Adalat

s. 297

s. 297

s. 60

s. 297(2)

s. 6

General Clauses Act

s. 6

General Clauses Act

s. 13

Finance Act, 1950

Section 6

General Clauses Act

Sections 2 and 13

s 297(2)

s. 6

General Clauses Act

s. 6

s. 6

General Clauses Act

s. 297(2)

s. 298

s. 12

Finance Act, 1950

Section 12

section 3

section 11

S. K. Das

section 12

section 12

Furthennore

s. 37

Payment of Bonus Act, 1965


STATE OF UTTAR PRADESH & ANR.

l'.·

SRI C. S. SHARMA

May 1, 1967

[M. HlOAYATULLAH AND C. A. VAIDIALINGAM, JJ.) Civil Services (Classification, Control and Appeal) Rules, r . . 55, Suhu. (I) and (3)-Difference in nature of enquiries under the two subrules-Enquiry under sub-r. (I) relates to misconduct affecting character Of a Govenunent servant-Full opportunity to defend himself nccessary- Enquiry vitiated lVhen officer not given opportunity to produce his defence 1vi1nesses.

The respondent was a Sales-tax Officer under the Uttar Pradesh Gov- crnmcnt.

Inquiries against him in respect of some charges of corrup- 1ion were first made by the Assistant Commissioner of Sales-tax who examined some witnesses.

The enquiry was then passed on to the Commissioner who neither examined the witnesses against the respondent himself nor gave an opportunity to the respondent, despite the biter's repeated requests to produce his defence witnesses.

On orders of dismissal being passed after the enquiry the respondent filed a writ petition before the High Court which succeeded. The State appealed.

It was conceded on behalf of the State that the enquiry was under sub r. (I) or r. 55 of the Civil Services (Classification, Control and Appeal) Rule.. The distinction between sub-n. (I) and (3) was considered.

HELD : The third sub-rule deals wifo the unsuitability of an oflicer for the service or with a charge for any specific fault. This fault means a fault in the execution of his duties and not a misconduct such as taking hribe etc. \vhich are charges of a more serious nature affecting the character of the individual concerned. The collocation of the words. 'any specific fault' or 'on account of unsuitability for service' give the clue to the distinction between the third sub-rule and the first sub-rule.

[852B-CJ

Sub-rule (I) of r. 55 is the general rule for enquiries when the conduct of a person is inquited into for misconduct.

A person cannot he charged with criminal conduct without affording him adequate opportunity to clear his character. If therefore the procedure under the fir, t sub-rule had to be followed, adequate opportunity had to be given to the respondent to lead evidence on his own behalf to clear himself.

No such opportunity having been given the enquiry could not be said to comply with the elementary principles of natural justice an<l the High Court rightly held that the enquiry was vitiated. (851 F-G; 852

E-F; 853 F-GJ

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1260 of 1966.

Appeal from the _judgment and decree dated July 10, 1962 of the Allahabad High Court, Lucknow Bench in Special Appeal No. 551 of 1960.

C. B. Agnnvala and 0. P. Rana, for the appellants.

B. C. Misra, B. P. Iha and C. L. Lal, for the respondent.

u:P. STATE v. c. s. SHARMA (Hidayatu/lah, J.) 849

The Judgment of the Court was delivered by Hidayatullah, J. This is an appehl by the State of Uttar Pradesh against the judgment and order of the High Court of Allahabad.

October 24, 1962, confirming in special appeal the deci;, ion of a learned Single Judge dated July 10, 1962.

By that order the High Court has set aside the order of dismissal made by the State Government against the respondent C. S. Shanna on the ground that he did not have a fair enquiry before the Commissioner of

Sales Tax when certain charges against him were inquired into.

The facts of the case are as follows.

The respondent C. S.

Sharma was appointed as a Sales Tax Officer in J anuaty 1949 and was transferred on April 1, 1950 to Hathras where he remained till the end of September 1952. An enquiry was made with reference to certain allegations against hin1 durmg his period of stay at Hathras.

On October 3, 1952, he .as tran;, ferred t?

Lakhampur Kheri and was ordered not to v1s1t Hathras until

allowed by the authorities.

It appears that in November 1952, an ex-parte inquiry was made by the Assistant Commissioner and the proceedings were submitted with a. preliminary report to the Commissioner.

On the basis of this report an order of suspension was passed against him on February 18, 1953 and he was placed for inquiry before the Commissioner.

A set of charges was delivered to him on April 15, 1953; then a supplementary charge-sheet was issued on July 8, 1953.

Sharma asked for the inspection of the record of the preliminary inquiry as also the report, but he was told to submit his explanation to the charges first before inspection could be allowed.

He submitted his explanation and in compliance with the directions conuined in the charge-sheet issued to him, he submitted a list of three defence witnesses whom he wished to examine in support C'f his cae. He requested that the witnesses against him should be examined vivavoce in his presence before he was asked to meet that evidence and also wished to be heard in person.

On October 31, 1953, Shanna submitted the list of witnesses above-mentioned.

On tile same day the Commissioner informed Shanna that he would be permitted to produce the witnesses mentioned m his letter in due course. In another communication he was told that another date would be fixed for hearing the witnesses m his defence.

It is not necessary to describe the charges here because ma11y of them, though found against him by the Commissioner, were not accepted by the State Government.

The order of dismissal was based upon three allegations which are allegation No. 5 in char2c No. I and allegations Nos. 1 and 3 in charges Nos. 2 and 3 respectively.

The Commissioner in his report found him guilty of these charges and also of other allegations which the State Government did not accept.

We shall refer to these charges presently after completing the narration of events which took place before the Enquiring Officer.

After the inquiry opened, the Commissioner did no< examine the witnesses afresh, but their previous statements. recorded at the earlier enquiry, were tendered in evidence and Shanna was asked to cross-examine them.

Sharma duly cro-; s-examined those witnesses and then the question arose whether he would be allowed to lead his defence or not.

In the first application which he had made giving the list of witnesses he had n.uncd three witnesses and had also added that they were to be examined in relation to a specific charge about a car owned by him.

On February 2, 1954, he made an application for 20 days' extension of time for giving the list of witnesses he wished to examine in his defence.

Third February had been fixed for summon111g of the witnesses against him but no date till then was fixed for the examination of his defence witnesses.

His application of February 2, 1954 was rejected by the Commissioner ou February 6, 1954, without fixing a date for the examination of the witnesses or for giving him an opportunity to give evidence on his own behalf.

Not knowing that he would not be given any further opportunity, Sharma submitted a list of four witnesses on February 10, 1954, but stated that he could not give the addresses of some of the witnesses because he did not know where thev were.

On February 24, 1954, he again stated that he wanted to examine defence witnesses and to examine himself.

No order was, however, made on these applications. On April 8, 1954, the Commissioner made his report recommending the dismissal of Sharma and the order of the State Government was made fter due opportunity to show cause why he should not be dismi>sed.

In reply to the show cause notice Sharma complained that he had not been allowed to lead evidence on his own behalf and thtt is one of the contentions in the present case.

The charges against him which have been held prov~J against him and to which we have referred were as folicws :

Charge No. 1. Al/egatio11 No. 5

"You accepted the accounts of Sarvsri Radhey Shiam Brij Kishore without due verification."

Charge No. 2, A/legation No. 1

"Sarvsri Damodar Das Radhey Shianr had been declared non-assessable for 1948-49 and for three quarters of 1949-50 by your predecessor.

The Judge (Appeals) had also declared the dealer unassessable H in an appeal against your orders.

Still you assessed the dealers for the first three quarters to harass him.

Ultimately you declared the dealer unassessable."

U.P. STATE v. c. s. SHARMA (Hidayatullah, J.) 851

Charge No. 3, Allegation No. 3

"You accepted Rs. 500/- from Mithoo Lal of the firm Noor Mohammed Mithoo Lal as bribe through Chhotey Lal vakil." l.n addition to these charges there was a charge against him that he was in possession of a car which his means did not allow him to purchase and in respect of which he had made a reply that he had received this car from his father-in-law.

This was charge No. 4 and in relation to this charge apparently he had cited the first list of three witnesses for the examination in his defence.

This charge was not accepted by the State Govermnent when the matter reached it.

After the order of dismissal was made, Sharma filed a writ petition in the High Court of Allahabad asking that the order made against him be quashed and his allegations were that the enquiry against him was made by a Commissioner who was biased against him; that the witnesses for the enquiry were not examined viva voce in his presence but were only tendered for crossexamination and lastly that no adequate opponunity was !liven to him for swnmoning his defence witnesses or to examine himself.

The High Court in the two orders which were made, reach ed the conclusion that the enquiry was defective, but different reasons were given by the learned Single Judge and the Division Bench.

We need not go into this matter ela1>9rately because in our opinion the appeal here must be dismissed because we are satisfied that no adequate opportunity was afforded to Sharma to lead his defence which the principles of natural justice required.

The first question is whether this inquiry was made under sub-rule ( 1) or (3) of r. 55 of the Civil Sarvices (Classification.

Control and Appeal) Rules.

It is an admitted fact that Sharma was a temporary employee and therefore his case would fall to be governed by sub-rule (3) of r. 55 if it could be said that the enquiry which was being made was for a specific fault or on account of his unsuitability for service. Sub-rule (I ) of r. 55 is a general rule for enquiries where the conduct of a person is inquired into for misconduct but sub-rule (3) says that that subrule shall not appy where it is l?roJ?Osed to terminate the employment of a probationer, or to dismiss, remove or reduce in rank a temporary govrnn~nt servant for any specific fault or on ac- 7ount of his unsuttab1hty for the service.

Sub-rule ( 3) says that in such cases, the probationer or temporary government servant ~?ncemed shall e apprised of the grounds of such proposal,

'.'1vn an ?PPortumty to show aus~ against the action to be takeR agamst h1.m, and his explanation in this behalf, if any, shall be d.uly considered. before orders are passed by the competent authonty.

I~ the third sub-rule applied, it is obviou~ that the kind of enqmry made complied with its requirements.

The first subrule, however, provides for a full-blooded enquiry which is the counter-part of a regular trial : witnesses have to be examined in support of the allegations, opportunity has to be given to the delinquent officer to cross-examine them and fo lead evidence in his defence.. In our judgrnent the present case was governed by the first sub-rule and not the third sub-rule.

The third sub-rule deals with the unsuitability of an officer for the service or with a charge for any specific fault.

This fault means a fault in the execution of his duties and not a misconduct such as taking bribe etc. which are charges of a more serious nature affecting . the character of the individual concerned.

The collocation of the words "any specific fault" or "on account of unsuitability for service" give the clue of the distinction between the third sub-rule and the first sub-rule. An officer who is, for example, habitually lazy or makes mistakes frequently or is not polite or decorous may be considered unsuitable for the service.

Another officer who makes a grievous default in the execution of his work may, be charged for the specific individual fault, that is .a dereliction or defect in the execution of that duty.

Where there is an allegation that an officer is guilty of a misconduct such as accepting bribe or showing favours, the matter is not one of specific fault in the execution of his work but something more.

That matter will fall to be governed by the first sub-rule because you cannot charge a man with criminal conduct without affording him adequate opportunity to clear his character.

Mr, Aggarwal fairly pointed out that the Government had appointed the enquiring officer to take action under r. 55 ( 1) and it is thus quite clear that Government viewed the matter also in this light.

It, therefore, follows that if the procedure under the first subrule had to be followed, adequate opportunity had to be given to Sharma to lead evidence on his own behalf to clear himself of serious charges which were levelled against him and give evidence on his own behalf.

It is obvious that he has not been able to lead his defence or to give evidence on his own behalf.

The question is whether he has to thank himself or the omission proceeded because of some action on the part of the enquiring officer. Considering the whole matter we are satisfied that the enquiring officer was to blame and we shall now show why we think so.

Throughout the enquiry, as late as February 24, 1954, Sharma had again and again given indication that he would lead evidence in his defence.

At first he had given a list of three witnesse5 which he later amplified to four leaving out one from the original list and adding two new names. He had also stated that he wanted to examine himself in his defence. The learned Commissioner who was holding the enquiry on more than one occasion stated that he would be afforded this opportunity and also that a date would be fixed for the examination of the defence wit-

.ll

U.P. STATE v. c. s. SHARMA (Hidayatul/a/z, J.) 853

nesses.

It is true that Shanna was playing for time and on the 2nd of February (before the date of hearing came) he put in an application that he would like an adjournment of 20 days before he submitted a final list of witnesses with their addresses.

This application was rejected on February 6, but between February 6 and April 8, when the report was made, two long months passed and it was possible for the Commissioner to have fixed a date, on which, if he was so minded, Sharma could bring his witnesses in support of his case or tender himself for examination.

No action was taken between February 6, 1954 and April 8, 1954 to enable Shanna to lead his defence, if any, in support of his part of the case.

This omission in our judgment was sufficient to vitiate the whole proceeding because no enquiry of this type in which there are charges of a criminal nature, can be said to be properly conducted when the defence of the officer is either frustrated or ruled out.

It was submitted by Mr. Agarwal .that the witnesses were being summoned by him to clear himself of the charge of owning a car without having the visible means to afford it and this charge was not accepted by the State Government.

This is true enough, but the State Government came on the scene much later.

In so far as the enquiring officer was concerned, he had accepted the allegation against Sharma and even if the original list be considered.

Sharma was entitled to lead evidence with regard to the car itself.

It is possible that if a date had been fixed, he would, not only have led evidence with regard to the car, but would have brought witnesses to clear himself of other charges, but no such opportunity was clearly afforded to him. Further before the case closed, the Commissioner had before him a list of four witnesses and fair play demanded that he should have fixed a date and left it to Shanna to procure attendance of his witnesses on that date, but if no date was fixed, Sharma was not expected to bring his witnesses day after day in the hope that the Commissioner would examine them any day. The enquiry cannot be said to comply with the elementary principles of natural justice and therefore we have no hesitation in accepting the decision of the High Court that the enquiry was vitiated.

We ma}' i; mt omit to state that. there was an allegation against the Comm1ss10ner that he was biased against Sharma.

It does appear that the Commissioner, in one of his letters stated that he had heard witnesses and satisfied himself that Shnna was defi. nitely corrupt.

This statement of the Commissioner showed that .he approached the case with a feeling that Shanna was guilty although the State Government cannot he said to share this bias of. th~ Commissi<!ner.

We would have said something more about this, 1f the occasion. had demanded this. but as we are upholdini; the order of the Htgh Court on the ground that no reasonable

opportunity was afforded to Shanila to lead his evidence, it is not A necessary to say whether an officer in the position of the Commissioner, who on the basis of secret enquiries behind the back of delinquent officer has reached the conclusion that there are good grounds for holding that the officer is corrupt, should himself conduct the enquiry. That matter may be left for consideration B in another case.

On the whole, therefore, we think that the ends of justice will be served in maintaining the order made by the High Court. The enquiry, if Government so decides, must proceed before an officer who will examine the witnesses in support of the charge in the manner laid down by this Court and afford Sharma an opportunity of leading his defence, if any, c The appeal, therefore, fails and is dismissed with costs.

G.C.

Appeal dismissl'd.

STATE OF UTTAR PRADESH & ANR

SRI C. S. SHARMA

May 1, 1967

Allahabad High Court, Lucknow Bench

. P. Rana

B. C. Misra

B. P. Iha

C. L. Lal

Hidayatullah

State of Uttar Pradesh

High Court of Allahabad

C. S. Shanna

C. S.

Sharma

Hathras

October 3, 1952

February 18, 1953

April 15, 1953

July 8, 1953

Sharma

October 31, 1953

Shanna

February 2, 1954

February 6, 1954

February 10, 1954

February 24, 1954

April 8, 1954

Sarvsri Radhey Shiam Brij Kishore

Damodar Das Radhey Shianr

Mithoo Lal

Aggarwal

Agarwal

Shnna

Shanila