Judgement

BHAGWATI, J.: This petition under Art. 32 of the Constitution also raises the question about the constitutionality of S. 5(1) of the Taxation on Income Investigation Commission Act, 1947 (XXX of 1947).

2. The facts which lead to the filing of this petition may be shortly stated.

3. Sir M. Ct. Muthiah Chettiar who carried on a flourishing banking business in India and foreign countries died in or about 1929 leaving behind him two sons M. Ct. M. Chidambaram Chettiar (since deceased) and M. Ct. M. Muthiah Chettiar, petitioner 3 and his widow Devanai Achi. M. Ct. M. Chidambaram Chettiar continued the ancentral banking business and also started several commercial enterprises.

He died by an accident while travelling in a plane in the year 1954 leaving behind him his two sons, the petitioners 1 & 2, Devanai Achi had predeceased him. The petitioners 1 & 2 are the legal representatives of the deceased M. Ct. M. Chidambaram Chettiar and also the representatives of their grandmother Devanai Achi.

4. The Central Government in exercise of its powers under S. 5(1) of Act XXX of 1947, referred to the Income-Tax Investigation Commission R. C. Nos. 516, 517 and 518 relating to M. Ct. M. Chidambaram Chettiar, M. Ct. Muthiah Chettiar, petitioner 3, and Devanai Achi. The Commission after holding an enquiry in all the three cases, recorded their findings and held that an aggregate sum of Rs. 10,07322-4-3 represented the undisclosed income during the investigation period and directed distribution of this sum over the several years in the manner indicated by them in Schedule A to their report.

This report was submitted by the Commission to the Government on 26-6-1952. The Central Government considered the report and, purporting to act under S. 8(2) of the Act, directed by their order No. 74(26) I. T./52 dated 16-9-1952 that appropriate action under the Income-tax Act be taken against the assessees with a view to assess or reassess the income which has escaped assessment for the years 1940-41 to 1948-49.

5. In pursuance of the said directions of the Central Government the Income-tax Officer, City Circle I, Madras issued notices under S. 34 of the Income-tax Act and made the re-assessment for the years 1940-41, 1941-42 and 1943-44 to 1948-49 based upon the finding of the Commission which were treated as final and conclusive. The assessment orders for the years 1940-41, 1941-42 and 1948-49 were served on the assessees on 20-2-1954, Assessment orders for the years 1943-44 to 1947-48 were served on 12-5-1954.

The re-assessment order for the year 1942-43 was not made though notices under S. 34 of the Income-tax Act had been issued by the Income-tax Officer on the assessees on 19-3-1954. It appears that these re-assessment proceedings for the years 1942-43 are yet pending and no assessment order in respect of that year has yet been served on the petitioners.

6. In regard to the assessment orders which were served on 20-2-1954, the petitioners preferred on 18-5-1954, the petitioners preferred on 18-5-1954 applications to the Commissioner of Income-tax, Madras under S. 8(5) of the Act for references to the High Court on questions of law arising out of those re-assessment orders passed by the Income-tax Officer. Similar applications were preferred thereafter in respect of the re-assessment orders which were served on the petitioners on 12-5-1954. These applications are still pending.

7. On 6-12-1954, the petitioners filed the present petition contending that the provisions of the Act XXX of 1947 were illegal, ultra vires and unconstitutional mainly on the ground that they were violative of the fundamental right guaranteed under Art. 14 of the Constitution.

8. The grounds urged in support of this contention were not felicitously expressed. The petitioners appears to have mixed up the contentions which could be urged as a result of our judgments in- Suraj Mall Mohta v. A. V. Visvanatha Sastri, AIR 1954 SC 545 (A) and - Shree Meenakshi Mills Ltd. v. A. V. Vis