Judgment

KRISHNA IYER, J.:- A nascent Chapter (Chapter XIXA) in the Income-tax Act, 1961, enacted by the Taxation Laws (Amendment) Act, 1975, whose beneficiaries are ordinarily those whose tax liability is astronomical and criminal culpability perilous, falls for decoding by this Court in the appeal by the Commr. of Income-tax (Central), Calcutta, against an adverse order made by the Settlement Commission. Functionally speaking, this Chapter, engrafted in partial implementation of the Wanchoo Committee Report, provides for settlement of huge tax disputes and immunity from criminal proceedings by a Commission to be constituted by the Central Government when approached without objection from the Tax Department. It is based on the debatable policy, fraught with dubious potentialities in the context of Third World conditions of political peculium and bureaucratic abetment, that composition and collection of public revenue from tycoons is better than prosecution of their tax-related crime and litigation for total revenue recovery. A social audit of the working of this Chapter in action and its fall-out may benefit the nation by information about who the true beneficiaries of this legislation are and whether there is more than meets the eye. The Wanchoo Committee which recommended this step titled its Chapter meaningfully as "Black Money and Tax Evasion" and the Act itself was passed and brought into force during the era of Emergency which was marked by speed and silence and hushed politico-official operations.

2. Be that as it may, fiscal philosophy and interpretative technology must be on the same wavelength if legislative policy is to find fulfilment in the enacted text. That is the challenge to judicial resourcefulness the present appeals offer, demanding, as it does, holistic perspective and harmonious construction of a whole chapter, especially a complex provision therein, so that a balance may be struck between purpose and result without doing violence to statutory language and social values. The Chapter is fresh and the issue is virgin; and that makes the judicial adventure hazardous, compounded by the involved and obscure drafting of the bunch of provisions in Chapter XIXA.

3. A few facts must be narrated and the anatomy of the Chapter projected at this stage, so that a hang of the controversy may be got and its just resolution sought.

4. The respondent, an elderly but apparently immense businessman, was the cynosure of suspicion of the Income-tax Officials which led to search and seizure of around Rs. 30 lakhs in cash from him. A chain reaction set in and assessments from 1962-63 to 1972-73 were re-opened. The total tax burden so fixed ran into well over Rs. 60 lakhs plus around Rs. 35 lakhs assessed for 1973-74. The stakes thus ran into a crore or so plus awesome prosecutions under S. 277 of the Act with unpredictable prospects of sentences. The respondent-assessee and his version or explanation had hopes of averting the Waterloo; but the Income-tax Officer (ITO) rejected his case. Indeed, we are neither called upon nor disposed to examine the merits of either side and, maybe, the assessee has a presentable case. Appeals to the Appellant Assistant Commissioner (A. A. C.) were carried by the assessee against the colossal imposts, which marginally brought down the assessable income by around Rs. 10 lakhs. Both the dissatisfied assessee and the partially injured Department appealed to the Income-tax Appellant Tribunal (I. T. A. T.) against the A. A. Cs. decisions. During their pendency, prudence dawned on the respondent to seek sanctuary before Settlement Commission abandoning his appeal to the Tribunal attended with litigative uncertainties and penal potentialities. At seventy, with understandable high blood pressure to boot, he preferred negotiated peace to judicial justice heartfelt of quest for quiet although hopeful of winning his cases. These motivations do not call for our comment but are being mentioned as part of the na