PETITIONER:
BIDI SUPPLY CO.
Vs.
RESPONDENT:
THE UNION OF INDIA AND OTHERS.
DATE OF JUDGMENT:
20/03/1956
BENCH:
DAS, SUDHI RANJAN
BOSE, VIVIAN
BHAGWATI, NATWARLAL H.
JAGANNADHADAS, B.
SINHA, BHUVNESHWAR P.
CITATION:
1956 AIR 479 1956 SCR 267
ACT
Constitution of India, Art. 14-Indian Income Tax Act, 1922
(XI of 1922), ss. 5 (7-A), 64(6)(b) as amended by Indian
Income Tax (Amendment) Act, 1940 (Act XL of 1940)-Whether
ultra vires the Constitution-Transfer, Order of-By Central
Board of Revenue under s. 5(7-A)-Transferring assessment
proceeding of petitioner from Calcutta to Ranchi-Without
notice to petitioner and without giving it opportunity to
make representation against such decision-Constitutionality
of-Assessee, rights of-Under s. 64, of the Act.
HEADNOTE
The petitioners registered firm-has its head-office in
Calcutta where its books of account are kept and maintained
and where it has its banking account, the members of the
firm being citizens of India. Since its inception the firm
has all along been assessed to income-tax by the Income-Tax
Officer, District III, Calcutta. The assessments for the
years 1948-49 and 1949-50 were made by the Income Tax
Officer, District III, Calcutta. Notices under s. 22(2) of
the Income Tax Act were issued to the petitioner by the
Income Tax Officer, District III, Calcutta to submit returns
for the years 1950-51, 1951-52, 1952-53, 1953-54 and 1954-
55. The Income Tax Officer, District III, Calcutta made
assessment for the year 1950-51 on 18-12-1954 being
satisfied that the principal place of business of the
petitioner was in Calcutta.
On the 25th January 1955 the petitioner received a letter
from the Income-Tax Officer, District III, Calcutta that in
pursuance to orders dated 13th December 1954 under s. 5(7-A)
of the Income Tax Act its assessment records were
transferred from that office to the Income Tax Officer,
Special Circle, Ranchi with whom the petitioner was to
correspond in future regarding its assessment proceedings.
The order stated that the Central Board of Revenue "hereby
transfers the case of" the petitioner. The petitioner had
no previous notice of the intention of the Income-Tax
authorities to transfer the assessment proceedings from
Calcutta to Ranchi nor bad it an opportunity to make any
representation against such decision. ’When called upon to
submit its return for the assessment year 1955-56 the
petitioner by an application under Art. 32 of the
Constitution contended that sub-section (7-A) of s. 5 of the
Indian Income-Tax Act, 1922 and the order of transfer made
thereunder were unconstitutional in that they infringed the
fundamental rights guaranteed to the petitioner under Arts.
14, 19(1)(g) and 31 of the Constitution. S. 64 of the
Indian Income-Tax Act makes provisions for determining the
place of assessment. Sub-section (1) of that section
provides
268
that where an assessee carried on a business, profession or
vocation at any place he shall be assessed by the Income-Tax
Officer of that area in which that place is situate or where
the business, profession, or vocation is carried on at more
than one place by the Income-Tax Officer of the area in
which the principal place of business, profession or
vocation is situate. In all other cases, according to sub-
section (2), an assessee shall be assessed by the Income-Tax
Officer of the area in which he resides. If any question
arises as to the place of assessment such question shall be
decided, after giving the assessee an opportunity to
represent his views by the Commissioner or Commissioners
concerned or in case of disagreement between them by the
Board of Revenue. The section is imperative in terms and
gives a valuable right to the assessee.
By amending the Indian Income-Tax Act 1922 by the Indian
Income-Tax (Amendment) Act, 1940 (Act XL of 1940) by adding
to clause (b) of sub-section (5) of s. 64 the words "in
consequence of any transfer made under sub-section (7-A) of
s. 5" and by adding subsection (7-A) to s. 5 the benefit
conferred by the provisions of subsection (1) and sub-
section (2) of s. 64 is taken away and is to be deemed not
to have existed at any time as regards the assessee with
regard to whom a transfer is made under sub-section (7-A) of
s. 5.
Held that as under s. 22(2) of the Act, the notice and the
return are to be confined to a particular assessment years
sub-section (7-A) of s. 5 contemplates the transfer of such
a "case" i.e. the assessment case for a particular year.
The provision that such a transfer may be made "at any stage
of the proceedings" obviously postulates proceedings
actually pending and "stage’ I refers to a point in between
the commencement and ending of those proceedings. Further
the transfer contemplated by the sub-section is the transfer
of a particular case actually pending before an Income-Tax
Officer of one place to the Income-Tax Officer of another
place.
Accordingly such an omnibus wholesale order of transfer
dated 13th December 1954 as was made in the present case is
not contemplated by the sub-section and therefore the
impugned order of transfer which was expressed in general
terms without any reference to any particular case and
without any limitation as to time was beyond the competence
of the Central Board of Revenue and the petitioner was still
entitled to the benefit of the provisions of subsections (1)
and (2) of s. 64.
The impugned order is discriminatory against the petitioner
and violates the fundamental right guaranteed to it by Art.
14 of the Constitution in-as-much as the income-tax
authorities by an executive order unsupported by law picked
out the present petitioner and transferred all his cases by
an omnibus order unlimited in point of time,which order is
calculated to inflict considerable inconvenience and
harassment on the petitioner.
BOSE J. Section 5(7-A) of the Indian Income-Tax Act is ultra
vires Art. 14 of the Constitution and so is s. 64(5)(b) in
so far as it
269
makes an order under s. 5(7-A) as it now exists, inviolate.
The power of transfer can only be conferred if it is hedged
round with reasonable restrictions, the absence or existence
of which can in the last instance be determined by the
courts; and the exercise of the power must be in conformity
with the rules of natural justice, that is to say, the
parties affected must be heard when that is reasonably
possible, and the reasons for the order must be reduced
however briefly, to writing so that men may know that the
powers conferred on these quasi judicial bodies are being
justly and properly exercised.
Chiranjit Lal Chowdhury v. The Union of India ([1950] S.C.R.
860), Budhan Chowdhry and others v. The State of Bihar,
([1955] 1 S.C.R. 1045), Dayaldas Kushiram v. Commissioner of
Income-Tax Central (I.L.R. [1940] Bom. 650; [1940] 8 I.T.R.
139), Eshugbai Eleko’s case (L.R. [1931] A.C. 662), The
State of West Bengal v. Anwar Ali Sarkar ([1952] S.C.R.
284), Ram Prasad Narayan Sahi and Another v. The State of
Bihar and Others’ ([1953] S.C.R. 1129), Bowman’s case
([1917] A.C. 406), Coal Control case ([1954] S.C.R. 803),
State of Madras v. V. G. Bow ([1952] S.C.R. 597), and
Liversidge v. Sir John Anderson ([1942] A.C. 206), referred
to.
JUDGMENT
ORIGINAL JURISDICTION: Petition No. 271 of 1955.
Under article 32 of the Constitution for the enforcement of
fundamental rights.
S.C. Isaacs (D. N. Mukerji, with him) for the
petitioner.
M.C. Setalvad, Attorney-General for India, (B. Sen and
R. H. Dhebar, with him) for the respondents.
1956. March 20.
DAS C.J.-This is an application under article 32 of the
Constitution praying for an appropriate writ and order
restraining the Income-tax Officer, Special Circle, Ranchi
(respondent No. 3) from taking up and proceeding with the
assessment of the petitioner to income-tax and other
ancillary reliefs. The facts shortly are as follows:-
The petitioner is a firm carrying on business as
manufacturer and seller of Bidi. In 1948 it was registered
as a firm under the Indian Partnership Act. It has its head
office in Calcutta, where its books of account are said to
be kept and maintained and
270
where it is said to have its banking account. It has its
factories near Chakradharpur in the State of Bihar but it
has no banking account there. The members of the firm are
citizens of India.
It is said that since its inception the firm has all along
been assessed to income-tax by the Income-tax Officer,
District III, Calcutta. Thus assessments for the years
1948-49 and 1949-50 were made by the Income-tax Officer,
District 111, Calcutta. Notices under section 22(2) of the
Income-tax Act were issued to the petitioner on different
dates by the Incometax Officer, District III, Calcutta,
calling upon the petitioner to submit returns for the
assessment years 1950-51, 1951-52, 1952-53, 1953-54 and
1954-55, the notice for the last mentioned year being dated
23rd August 1954. In compliance with these notices the
petitioner duly submitted its returns for those respective
years to the Income-tax Officer, District III, Calcutta. In
the course of assessment proceedings for the year 1950-51 a
question was raised regarding the location of the principal
place of business of the petitioner. Eventually the income-
tax authorities seem to have been satisfied that it was in
Calcutta and on 18th December 1954 the Income-tax Officer,
District III, Calcutta, made assessment for the year 1950-
51. On the 25th January, 1955 the petitioner received a
letter from the Income-tax Officer, District III, Calcutta
informing it "that in pursuance to orders under section 5(7-
A) of the Income-tax Act your assessment records are
transferred from this office to the Income-tax Officer,
Special Circle, Ranchi with whom you may correspond in
future regarding your assessment proceedingS". The order
referred to in the above communication was as follows:-
No. 55(70)IT/54.
Central Board of Revenue.
New Delhi, dated the 13th December, 1954.
ORDER.
No. 87. Under sub-section (7-A) of section 5 of the Indian
Income-tax Act, 1922 (XI of 1922) the Central Board of
Revenue hereby transfers
271
the case of Biri Supply Company, 3/1, Madan Street, Calcutta
from the Income-tax Officer., District III(1) Calcutta to
the Income-tax Officer, Special Circle, Ranchi.
Sd. (K. B. Deb),
Under Secretary,
Central Board of Revenue.
It is alleged and not denied by the respondent that the
petitioner had no previous notice of the intention of the
Income-tax authorities to transfer the assessment
proceedings from Calcutta to Ranchi nor had it any
opportunity to make any representation against such
decision. Thereafter on the 2nd May 1955 the Income-tax
Officer, Special Circle, Ranchi called upon the petitioner
to submit its return for the assessment year 1955-56. It is
then that the present petition was filed under article 32 of
the Constitution challenging the validity of the Order of
transfer dated the 13th December 1954 and the law under
which such order was purported to have been made. The con-
tention is that sub-section (7-A) of section 5 of the Indian
Income-tax Act, 1922 and the said Order of transfer made
thereunder are unconstitutional in that they infringe the
fundamental rights guaranteed to the petitioner by articles
14, 19 (1) (g) and 31 of the Constitution.
Article 14 of the Constitution enjoins that the State shall
not deny to any person equality before the law or the equal
protection of the laws within the territories of India. The
expression "the State" used in Part III of the Constitution
which deals with fundamental rights includes, unless the
context otherwise requires, the Government and Parliament of
India and the Government and the legislatures of each of the
States and all local or other authorities within the
territory of India or under the control of the Government of
India. The scope and effect of article 14, in so far as it
protects all persons against discriminatory and hostile
legislation, have been discussed and explained by this court
in a series of cases beginning with Chiranjit Lal Chowdhury
v. The Union
36
272
of India(1) and ending with Budhan Chowdhry and others v.
The State of Bihar(2). In the last mentioned case a Full
Bench of this court summarised the result of the earlier
decisions on this point in the words following:-
"It is now well-established that while article 14 forbids
class legislation, it does not forbid reasonable
classification for the purposes of legislation. In order,
however, to pass the test of permissible classification two
conditions must be fulfilled, namely, (1) that the
classification must be founded on an intelligible
differentia which distinguishes persons or things that are
grouped together from others left out of the group and (2)
that differentia must have a rational relation to the object
sought to be achieved by the statute in question. The
classification may be founded on different bases; namely,
geographical, or according to objects or occupations or the
like. What is necessary is that there must be a nexus
between the basis of classification and the object of the
Act under consideration. It is also well-established by the
decisions of this court that article 14 condemns
discrimination not only by a substantive law but also by a
law of procedure".
We have, therefore, to approach the problem posed before us
bearing in mind the above principles laid down by this court
in so far as they may be applicable to the facts of the
present case.
Turning now to the Indian Income-tax Act, 1922 we find that
section 64 makes provision for determining the place of
assessment. By sub-section (1), where an assessee carries
on a business, profession or vocation at any place, he shall
be assessed by the Income-tax Officer of that area in which
that place is situate or where the business, profession, or
vocation is carried on at more than one place by the Income-
tax Officer of the area in which the principal place of
business, profession or vocation is situate. In all other
cases, according to sub-section (2), an assessee shall be
assessed by the Income-tax Officer of the area in which he
resides. If any question arises as to the
(1) [1950] S.C.R. 869.
(2) [1955] 1 S.C.R. 1045.
273
place of assessment such question shall be decided, after
giving the assessee an opportunity to represent his views by
the Commissioner or Commissioners concerned or in case of
disagreement between them by,, the Board of Revenue (sub-
section (3)). It is quite clear from the aforesaid
provisions of section 64 that the Legislature considered the
question of the place of assessment to be of some importance
to the assessee.
The provisions of section 64 of the Indian Incometax Act,
1922 came up for discussion before the Bombay High Court in
Dayaldas Kushiram v. Commissioner of Income-tax, Central(1).
At pages 657 to 658 Beaumont, C.J. observed as follows:
"In my opinion section 64 was intended to ensure that as far
as practicable an assessee should be assessed locally, and
the area to which an Income-tax Officer is appointed must,
so far as the exigencies of tax collection allow, bear some
reasonable relation to the place where the assessee carried
on business or resides. There is Do evidence that there was
any difficulty in restricting the area to which the Income-
tax Officer, Section II (Central), was appointed to
something much narrower than the Bombay Presidency, Sind and
Baluchistan. Therefore, in my opinion, Income-tax Officer,
Section II (Central), is not the Income-tax Officer of the
area in which the applicant’s place of business is situate,
and as there is such an officer in existence, namely, the
Officer of Ward C, Section II, in my opinion, it is only the
latter officer who can assess the assessee".
Kania, J. (as he then was) said at pages 660-661:
"A plain reading of the section shows that the same is
imperative in terms. It also gives to the assessee a
valuable right. He is entitled to tell the taxing
authorities that he shall not be called upon to attend at
different places and thus upset his business".
It will be noticed from the above passages that the learned
judges treated the provisions of section 64 more as a
question of right than as a matter of convenience only. It
was for the above decision that the
(1) I.L.R. [1940] Bom. 650; [1940] 8 I.T.R. 139.
274
Indian Income-tax Act, 1922 was amended by the Indian
Income-tax (Amendment) Act, 1940 (Act XL of 1940), by adding
to clause (b) of sub-section (5) of section 64 the words "in
consequence of any transfer made under sub-section (7-A) of
section 5" and by adding sub-section (7-A) to section 5. The
relevant portion of sub-section (5) of section 64 so amended
reads as under:-
"(5) The provisions of sub-section (1) and subsection (2)
shall not apply and shall be deemed never at any time to
have applied to any assessee
(a) ...................................................... :
.....................................................
(b)where by any direction given or any distribution or
allocation of work made by the Commissioner of Income-tax
under sub-section (5) of section 5, or in consequence of any
transfer made under sub-section (7-A) of section 5, a
particular Income-tax Officer has been charged with the
function of assessing that assessee, or
(c) ........................................................
It is thus clear from this amendment that the benefit
conferred by the provisions of sub-section (1) and sub-
section (2) are taken away and is to be deemed and not to
have existed at any time as regards the assessee with regard
to whom a transfer order is made under sub-section (7-A) of
section 5. In order, however, to deprive a particular
assessee of the benefits of sub-sections (1) and (2) of
section 64, there must be a valid order under section 5(7-A)
and he will lose the benefit only to the extent to which
that right is taken away by a valid order made under sub-
section (7-A) of section 5. This takes us to the new sub-
section (7-A) of section 5.
Sub-section (7-A) of section 5 runs as follows:
"(7-A) The Commissioner of Income-tax may transfer any case
from one Income-tax Officer subordinate to him to another,
and the Central Board of Revenue may transfer any case from
any one Income-tax Officer to another. Such transfer may be
made at any stage of the proceedings, and shall not render
275
necessary the reissue of any notice already issued by the
Income-tax Officer from whom the case is transferred".
The sub-section in terms makes provisions for the, transfer
of a "case". Under the Indian Income-tax Act, 1922 a case
is started when the Income-tax Officer issues a notice under
section 22(2) of the Act calling upon the assessee to file
his return of his total income and total world income during
the previous year and then the assessee submits his return
in the prescribed form. It is quite clear from the section
that the notice and the return are to be confined to a
particular assessment year and the sub-section contemplates
the transfer of such a "case", i.e., the assessment case for
a particular year. The provision that such a transfer may
be made "at any stage of the proceedings" obviously
postulates proceedings actually pending and "stage" refers
to a point in between the commencement and ending of those
proceedings. Further the provision that such transfer shall
not render necessary the reissue of notice already issued by
the Income-tax Officer from whom the case is transferred
quite clearly indicates that the transfer contemplated by
the sub-section is the transfer of a particular case
actually pending before an Income-Tax Officer of one place
to the Income-Tax Officer of another place. The fact that
in this case the Income-tax Officer, Special Circle, Ranchi
issued fresh notice under section 22(2) quite clearly shows
that he did not understand that any particular pending case
of this assessee had been transferred to him. Evidently he
thought that the assessment of the petitioner’s income,
generally and as a whole, bad been transferred to him and
that it was, therefore, for him to initiate a case, i.e.,
assessment proceedings for a particular year. In our
judgment such an omnibus wholesale order of transfer is not
contemplated by the sub-section. It is implicit in the sub-
section that the Commissioner of Income-Tax or the Central
Board of Revenue, as the case may be, should before making
an order of transfer of any case apply his or its mind to
the necessity or desirability of the transfer
276
of that particular case. The fact that it is necessary or
desirable to transfer a case of assessment of a particular
assessee for any particular year does not necessarily
indicate that it is equally necessary or desirable to
transfer another assessment case of that assessee for any
other assessment year. We are accordingly of the opinion
that the impugned order of transfer, which was expressed in
general terms without any reference to any particular case
and without any limitation as to time, was beyond the com-
petence of the Central Board of Revenue. We did not
understand the learned Attorney-General to contend that such
was not the correct interpretation of the sub-section.
We do not consider it necessary, for the purpose of this
case, to pause to consider whether the constitutionality of
sub-section (7-A) of section 5 can be supported on the
principle of any reasonable classification laid down by this
court or whether the Act lays down any principle for guiding
or regulating the exercise of discretion by the Commissioner
or Board of Revenue or whether the sub-section confers an
unguided and arbitrary power on those authorities to pick
and choose individual assessee and place that assessee at a
disadvantage in comparison with other assessees. It is
enough for the purpose of this case to say that the omnibus
order made in this case is not contemplated or sanctioned by
sub-section (7-A) and that, therefore, the petitioner is
still entitled to the benefit of the provisions of sub-
sections (1) and (2) of section 64. All assessees are
entitled to the benefit of those provisions except where a
particular case or cases of a particular assessee for a
particular year or years is or are transferred under sub-
section (7-A) of section 5, assuming that section to be
valid and if a particular case or cases is or are
transferred his right under section 64 still remains as
regards his other case or cases. As said by Lord Atkin in
Eshugbai Eleko’s case(1) the executive can only act in
pursuance of the powers given to it by law and it cannot
interfere with the liberty, property
(1)L.R. [1931] A.C. 662, 670.
277
and rights of the subject except on the condition that it
can support the legality of its action before the court.
Here there was no such order of transfer as is contemplated
or sanctioned by sub-section (7-A) of section 5 and,
therefore, the present assessee still has the right, along
with all other Bidi merchants carrying on business in
Calcutta, to have his assessment proceedings before the
Income-tax Officer of the area in which his place of
business is situate. The income-tax authorities have by an
executive order,, unsupported by law, picked out this
petitioner and transferred all his cases by an omnibus order
unlimited in point of time This order is calculated to
inflict considerable inconvenience and harassment on the
petitioner. Its books of account will have to be produced
before the Income-tax Officer, Special Circle, Ranchi-a
place hundreds of miles from Calcutta, which is its place of
business. Its partners or principal officers will have to
be away from the head office for a considerable period
neglecting the main business of the firm. There may be no
suitable place where they can put up during that period.
There will certainly be extra expenditure to be incurred by
it by way of railway fare, freight and hotel expenses.
Therefore the reality of the discrimination cannot be
gainsaid. In the circumstances this substantial
discrimination has been inflicted on the petitioner by an
executive fiat which is not founded on any law and no
question of reasonable classification for purposes of
legislation can arise. Here "the State" which includes its
Income-tax department has by an illegal order denied to the
petitioner, as compared with other Bidi merchants who are
similarly situate, equality before the law or the equal
protection of the laws and the petitioner can legitimately
complain of an infraction of his fundamental right under
article 14 of the Constitution.
It has further been urged that this order indirectly C
affects the petitioner’s fundamental right under article
19(1)(f) and article 31. There can be no gainsaying the
fact that the order purports to deprive the petitioner of
its right under section 64 to which
278
it would otherwise be entitled. The order of transfer is
certainly calculated to inflict considerable inconvenience
and harassment to the petitioner as hereinbefore mentioned.
But in the view we have taken on the construction of sub-
section (7-A) of section 5 and the petitioner’s rights under
article 14, it is not necessary for us, on this occasion, to
express any opinion on the contention that the inconvenience
and harassment referred to above constitute an imposition of
such an interference as amounts to an unwarranted
restriction on the petitioner’s rights under article
19(1)(g) or a violation of his rights under article 31.
For the reasons stated above this petition must be allowed.
Accordingly the impugned order is set aside and an
injunction is issued in terms of prayer (c) of the petition.
The petitioner is entitled to the costs of this application.
BOSE J.-I agree with my Lord the Chief Justice that this
petition should be allowed but for different reasons. In my
opinion, sections 5(7-A) and 64(5)(b) of the Indian Income-
tax Act are themselves ultra vires article 14 of the
Constitution and not merely the order of the Central Board
of Revenue.
The only question is whether these sections contravene
article 14. Despite the constant endeavour of Judges to
define the limits of this law, I am unable to deduce any
clear cut principle from the oftrepeated formula of
classification. As I have said in another case, even the
learned Judges who propound that theory and endeavour to
work it out are driven to concede that classification in
itself is not enough for the simple reason that anything can
be classified and every discriminatory action must of
necessity fall into some category of classification, for
classification is nothing more than dividing off one group
of things from another; and unless some difference or-,
distinction is made in a given case no question under
article 14 can arise. It is just a question of framing a
set of rules.
It is elementary that no two things are exactly
279
alike and it is equally obvious many things have features
that are common. Once the lines of demarcation are fixed,
the resultant grouping is capable of objective determination
but the fixing of the lines is necessarily arbitrary and to’
say that governments and legislatures may classify is to
invest them with a naked and arbitrary power to discriminate
as they please. Faced with the inexorable logic of this
position,, the learned Judges who apply this test are forced
to hedge it round with conditions which, to my mind add
nothing to the clarity of the law. I will pass over the
limitations with which the classification test is now
judicially surrounded, namely that it must be "reasonable",
it must not be "discriminatory" or "arbitrary", it must not
be "hostile"; there must be no "substantial discrimination",
and so forth, and will proceed at once to a rule that is
supposed to set the matter at rest. The rule is taken from
the American decisions and was stated thus in The State of
West Bengal v. Anwar Ali Sarkar(1):
be fulfilled,, namely (1) that the classification must be
founded on an, intelligible differentia which distinguishes
those that are grouped together from others and (2) that
differentia must have a rational relation to the object
sought to be achieved by the Act".
Mukherjea, J. (as he then was) said at page 321 ibid that
"the classification should never be arbitrary, artificial or
evasive. It must rest always upon real and substantial
distinction bearing a reasonable and just relation to the
thing in respect to which the classification is made; and
classification made without any reasonable basis should be
regarded as invalid". In another case, Ram Prasad Narayan
Sahi and Another v. The State of Bihar and Others(), the
same learned Judge said at page 1139-
"but such selection or differentiation must not be arbitrary
and should rest upon a rational basis, having regard to the
object which the legislature has in view".
(1) [1952] S.C.R. 284, 334.
(2) [1953] S.C.R. 1129.
37
280
Ivor Jennings puts it another way: -
"Among equals the law shall be equal and shall be equally
administered and that like shall be treated alike".
With the utmost respect all this seems to me to break down
on a precise analysis, for even among equals a large
discretion is left to judges in the matter of punishment,
and to the police and to the State whether to prosecute or
not and to a host of officials whether to grant or withhold
a permit or a licence. In the end, having talked learnedly
round and around the article we are no wiser than when we
started and in the end come back to its simple phrasing-
"The State shall not deny to any person equality before the
law or the equal protection of the laws Within the territory
of India".
The truth is that it is impossible to be precise, for we are
dealing with intangibles and though the results are clear it
is impossible to pin the thought down to any precise
analysis. Article 14 sets out, to my mind, an attitude of
mind, a way of life, rather than a precise rule of law. It
embodies a general awareness in the consciousness of the
people at large of something that exists and which is very
real but which cannot be pinned down to any precise analysis
of fact save to say in a given case that it falls this side
of the line or that, and because of that decisions., on the
same point will vary as conditions vary, one conclusion in
one part of the country and another somewhere else; one
decision today and another tomorrow when the basis of
society has altered and the structure of current social
thinking is different. It is not the law that alters but
the changing conditions of the times and article 14 narrows
down to a question of fact which must be determined by the
highest Judges in the land as each case arises. (See on this
point Lord Sumner’s line of reasoning in Bowman’s case(1)).
Always there is in these cases a clash of conflicting claims
and it is the core of the judicial process to arrive at an
accommodation between them. Anybody can decide a question
if only a single principle
(1)[1917] A.C. 406, 466, 467.
281
is in issue. The heart of the difficulty is that there is
hardly any question that comes before the Courts that does
not entail more than one so-called principle. As Judge
Leonard Hand of the United States Court T. of Appeals said
of the American Constitution-
"The words a judge must construe are empty vessels into
which he can pour anything he will"
These rules are useful guides in some cases but they do not,
in my opinion, go to the root of the matter; nor am I alone
in so thinking though my approach is more direct and
fundamental than is usual. Patanjali Sastri, C.J. said in
The State of West Bengal v. Anwar., Ali Sarkar(1) that the
reported decisions
"underline the futility of wordy formulation, of so-called
’tests’ in solving problems presented by concrete cases".
I endeavoured to point out in my judgment in Anwar Ali
Sarkar’s case(1) at page 361 that one can conceive of
classifications that conform to all these rules and yet
which are bad: classifications made in the utmost good
faith;/classifications that are scientific and rational,
that ’Will have direct and reasonable relation to the object
sought to be achieved and yet which are bad because despite
all that the object itself cannot be allowed on the ground
that it offends article 14. In such a case, the object
itself must be. struck down and not the mere classification
which,, after all, is only a means of attaining the end
desired; and that, in my judgment, is precisely the point
here. It is the very point that Fazl Ali J. made in Anwar
Ali Sarkar’s case(1) at pages 309-310:
"It was suggested that the reply to this query is that the
Act itself being general and applicable to all persons and
to all offences, cannot be said to discriminate in favour of
or against any particular case or classes of persons or
cases,, and if any charge of discrimination can be levelled
at all, it can be levelled only against the act of the
executive authority if the Act is misused. This kind of
argument however does not appear to me to solve the
difficulty. The result of accepting it would be that even
where discrimina-
(1) [1952] S.C.R. 284, 297.
282
tion is quite evident one cannot challenge the Act simply
because it is couched in general terms; and one cannot also
challenge the act of the executive authority whose duty it
is to administer the Act, because that authority will say:-I
am not to ’blame as I am acting under the Act. It is clear
that if the argument were to be accepted, article 14 could
be easily defeated. I think the fallacy of the argument
lies in overlooking the fact that the ’insidious discrimina-
tion complained of is incorporated in the Act itself’, it
being so drafted that whenever any discrimination is made
such discrimination would be ultimately traceable to it".
Nor, in the past, has this Court hesitated to strike, down
the Act or Order itself when it confers unrestricted power
as here. That was what happened in the Coal Control
Case(’); the Order itself was struck down and not the
executive action taken by virtue of the unrestricted powers
conferred by that law. See page 813 where it was said-
"The Order commits to the unrestrained will of a single
individual the power to grant, withhold or cancel licences
in any way he chooses and there is nothing in the Order
which would ensure a proper execution of the power or
operate as a check upon injustice that might result from
improper execution of the same".
So also in the State of Madras v. V. G. Row(2). It is true
that these were cases under article 19 and not 14 of the
Constitution but the principle is the same. I need not
multiply instances.
What is the position here? Here is an Act that fixes a
certain venue for assessment in section 64. That is the
normal law of the land for. these purposes. The language in
sub-sections (1) and (2) is mandatory: "be shall be
assessed" If there is doubt or dispute about the correct
venue, it can only be decided after hearing the party
concerned. Then come the provisions for transfer.
Now it is, I think, necessary that there should be powers of
transfer and the mere conferral of such
(1) [1954] S.C.R. 803.
(2) [1952] S.C.R. 597.
283
powers would not offend article 14. But, put at its lowest,
it is anomalous that when similar powers are conferred on
the High Courts and even on this Court under., for example,
the Code of Criminal Procedure, they should be hedged round
with limitations, whereas, when it comes to a Commissioner
of Income-tax or the Central Board of Revenue, no
limitations whatever are placed upon them. Section 526 of
the Criminal Procedure Code confers only limited powers of
transfer on the High Court and article 136 empowers this
Court to intervene should those powers be exceeded by the
High Court and should this Court in its discretion feel that
has led, or is likely to lead, to hardship and injustice or
to a miscarriage of justice; and in the case of this Court a
right to transfer is conferred under section 527 only when
that is expedient in the interests of justice". Section 24
of the Civil Procedure Code is wider but that was a law made
before the Constitution and, in any case, such an order
would be open to review by this Court and in a suitable
case, should the High Court act arbitrarily or along non-
judicial lines, such as directing a transfer without
recording reasons and without hearing the parties concerned
when it is possible to afford them a hearing, the matter
would be set right here. There is a big difference between
investing a judicial authority with such powers and other
non-judicial bodies because judges must act in accordance
with a recognised procedure and obey the laws of natural
justice unless there is express indication to the contrary
in the statute.
What is the position here? There is no hearing, no reasons
are recorded: just peremptory orders transferring the case
from one place to another without any warning: and the power
given by the Act is to transfer from one end of India to the
other; nor is that power unused. We have before us in this
Court a case pending in which a transfer has been ordered
from Calcutta in West Bengal to Ambala in the Punjab.
After all, for whose benefit was the Constitution enacted?
What was the point of making all this
284
pother about fundamental rights? I am clear that the
Constitution is not for the exclusive benefit of governments
and States; it is not only for lawyers and politicians and
officials and those highly placed. It also exists for the
common man, for the poor and the humble, for those who have
businesses at stake., for the "butcher, the baker and the
candlestick maker’.’. It lays down for this land "a rule of
law" as understood in the free democracies of the world. It
constitutes India into a Sovereign Democratic Republic and
guarantees in every page rights and freedom to the
individual side by side and consistent with the overriding
power of the State to act for the common good of all.
I make no apology for turning to older democracies and
drawing inspiration from them, for though our law is an
amalgam drawn from many sources, its firmest foundations are
rooted in the freedoms of other lands where men are free in
the democratic sense of the term. England has no
fundamental rights as such and its Parliament is supreme but
the liberty of the subject is guarded there as jealously as
the supremacy of Parliament.
The heart and core of a democracy lies in the judicial
process, and that means independent and fearless judges free
from executive control brought up in judicial traditions and
trained to judicial ways of working and thinking. The main
bulwarks of liberty and freedom lie there and it is clear to
me that uncontrolled powers of discrimination in matters
that seriously affect the lives and properties of people
cannot be left to executive or quasi executive bodies even
if they exercise quasi judicial functions because they are
then invested with an authority that even Parliament does
not possess. Under the Constitution, Acts of Parliament are
subject to judicial review particularly when they are said
to infringe fundamental rights, therefore, if under the
Constitution Parliament itself has not uncontrolled freedom
of action, it is evident that it cannot invest lesser
authorities with that power. If the legislature itself had
done here what the Central Board of Revenue
285
has done and had passed an Act in the bald terms of the
order made here transferring the case of this petitioner,
picked out from others in a like situation, from one State
to another, or from one end of India to the other, without
specifying any object and without giving any reason, it
would in my judgment, have been bad. I am unable to see how
the position is bettered because the Central Board of
Revenue has done this and not Parliament.
I quote Mukherjea J. (as he then was) in a case which is not
in point here but in a passage whose language seems apt to
the present position. The quotation is from Ram Prasad
Narayan Sahi v. The State of Bihar(1):
"It is impossible to conceive of a worse form of
discrimination than the one which differentiates a
particular individual from all his fellow subjects and
visits him with a disability Which is not imposed upon
anybody else and against which even the right of complaint
is taken away" and again,
"It is true that the presumption is in favour of, the
constitutionality of a legislative enactment and it has to
be presumed that a Legislature understands and correctly
appreciates the needs of its own People. But when on the
face of a statute there is no classification at all, and no
attempt has been made to select any individual or group with
reference to any differentiating attribute peculiar to that
individual or group and not possessed by others, this
presumption is of little or no assistance".
In the case of Liversidge v. Sir John Anderson(1) the
learned Law Lords were at great pains to see whether the
British Parliament had in fact left the matter under
consideration there to the subjective satisfaction of a
Secretary of State. There was no doubt that the British
Parliament could do so because it is’ supreme and its action
is not fettered by a written constitution, but the
encroachment on the liberty of the subject was so great that
the House of Lords was reluctant to reach the conclusion
which it ulti-
(1) [1953] S.C.R. 1129, 1143.
(2) [1942] A.C. 206.
286
mately did by a majority, that had in fact been done; and
one of the learned Law Lords, Lord Atkin, read a powerful
dissenting opinion. One of his criticisms at page 226 was
that the order of detention was made
"by an executive minister and not by any kind of judicial
officer; it is not made after any inquiry as to facts to
which the subject is party, it cannot be reversed on any
appeal............ It is an absolute power which, so far as
I know, has never been given before to the executive".
In my opinion, that is the very point here. In England the
power can be conferred but, because it so vitally affects
the liberty of the subject, the judges there fight against
any interpretation that would lead to that conclusion and in
the end reach it only when compelled to do so for
overwhelming reasons. In India the fundamental freedoms
conferred by the Constitution are guarded with equally
jealous care and it seems to me that the whole point of
having this Chapter on Fundamental Rights is to ensure that
the very things that the English judges fight against in
their courts will not happen here.
In England the task of the judges is to see whether their
Parliament has conferred those wide powers; in India our
task is to see whether the Constitution has done so. In
England the conferral of those powers is never conceded
unless Parliament uses clear, express and unambiguous words.
In our Constitution I find an absence of any such clarity;
on the contrary, the whole trend of the Constitution points
the other way
If an executive authority or a quasi judicial body, or
even Parliament itself, were to be given the right to
determine these matters to their subjective satisfaction,
there would be no point in these fundamental rights, for the
courts would then be powerless to interfere and determine
whether those rights have been infringed. The whole point
of the chapter is to place a limitation on the powers of all
these bodies, including Parliament, save in its constituent
capacity. Therefore, no power resting on the subjective
satis-
287
faction of any of these bodies can ever be conferred; the
satisfaction must always be objective in the sense in which
Lord Atkin explained so that its exercise is open to
judicial review.
In my opinion, the power of transfer can only be conferred
if it is hedged round with reasonable restrictions, the
absence or existence of which can in the last instance be
determined by the courts; and the exercise of the power must
be in conformity with the rules of natural justice, that is
to say, the parties affected must be heard when that is
reasonably possible, and the reasons for the order must be
reduced, however briefly, to writing so that men may know
that the powers conferred on these quasi judicial bodies are
being justly and properly exercised.
In a democracy functioning under the Rule of Law it is not
enough to do justice or to do the right thing; justice must
be seen to be done and a satisfaction and sense of security
engendered in the minds of the people at large in place of a
vague uneasiness that Star Chambers are arising in this
land. We have received a rich heritage from a very
variegated past. But it is a treasure which can only be
kept at the cost of ceaseless and watchful guarding. There
is no room for complacency, for in the absence of constant
vigilance we run the risk of losing it. "It can happen
here."
I would hold for these reasons, and in particular for the
reason given by Fazl Ali J. in the passage from one of his
judgments quoted above, that section 5(7-A) is ultra vires
article 14 of the Constitution and so is section 64(5)(b) in
so far as it makes an order under section 5(7-A) as it now
exists, inviolate.
I would allow the petition.
38
288