Judgement

MAHAJAN C.J.I. : Writ Petitions Nos. 330 to 333 of 1954. though presented by different persons, raise identical questions for consideration and decision and can be conveniently disposed of by one judgment.

2. In April 1947 Taxation on Income (Investigation Commission) Act, 1947, Act 30 of 1947 was passed by the Central Legislature. By S. 3 of the Act the Central Government was empowered to constitute an Income-tax Investigation Commission for investigating matters relating to taxation on income with particular reference to the question whether the existing law was adequate for preventing the evasion thereof. Section 5(1) of the Act further empowered the Central Government to make a reference by the 30th June, 1948 to the Commission for investigation and report of any cases wherein it had prima facie reason for believing that a person had, to a substantial extent , evaded payment of taxation on income. The date for making the reference was subsequently extended to 1st of September, 1948.

By an Amendment Act passed in 1948 it was provided that the life of the Commission, in the first instance, would be up to the 31st of March, 1950, but that it could be further extended to 31st of March, 1951. By subsequent legislations the life of the Commission has been extended to December 1955.

3. The procedure prescribed by the Act for making the investigation under its provisions is of a summary and drastic nature. It constitutes a departure from the ordinary law of 15 procedure and in certain important aspects is detrimental to the persons subjected to it and as such is discriminatory. The substantial differences in the normal procedure of the Income-tax Act for catching escaped income and in the procedure prescribed by Act 30 of 1947, were fully discussed by this Court in - Suraj Mal Mohta & Co. v. A. V. Visvanatha Sastri , AIR 1954 SC 545 (A), and require no further discussion here.

4. Sub-section (4) of S. 5 of the Act provided that the Central Government could refer to the Commission cases of persons other than those whose cases had been referred to it by the 1st of September, 1948 under S. 5(1), if after investigation, the Commission made a report to that effect. Thus, two categories of cases under Act 30 of 1947 could be referred to the Investigation Commission by the Central Government, namely, those failing under S. 5(1) and those failing under S. 5(4) of the Act.

5. In accordance with the provisions of S. 5(1) of the Act the Central Government on the 31st of December 1947 referred to the Investigation Commission the cases of the four petitioners for investigation and report. It is alleged by each of these petitioners that no action was taken by the Commission on these references during the original period of its life or even during the extended period provided by the Amendment Act of 1948: If a report had been submitted in these cases during the original period of the life of the Commission, the problems that now arise would not have arisen, because the Act being a pre-Constitution Act was good law before the Constitution and acts done thereunder before the commencement of the Constitution could not be impugned on the basis of the provisions of Part III of the Constitution which came into force on the 26th January 1950.

Those provisions had no retrospective operation and could not affect the validity of this law or the completed proceedings taken thereunder. Be that as it may, it appears that nothing happened in these cases till January 1952, when it is alleged an official of the Commission summoned the petitioners for a preliminary discussion which took place in February 1952, and since then the petitioners have from time to time been called upon to produce a number of statements and books of account, but the investigation has not proceeded beyond the preliminary stages and the Commission itself has admittedly not commenced any proceedings in these cases, though a period of nearly seven years has elapsed since the referenc