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1951 Supreme(SC) 2
SUPREME COURT OF INDIA
H.J.Kania, CJI., B.K.Mukherjee : M.Patanjali Sastri : S.R.Dass : M.Fazal Ali Syed, JJ.
Ramjilal
Versus
Income Tax Officer, Mohindar Garh
Case No. : 135 of 1950
Date of Decision : 1/12/51
Advocates Appeared: Chand Bakshi Tek : Hardy Hardayal : Lal Jindra : Lal Naunit : Mehta P.A. : Setalvad M.C. : Sikri S.M.
Protection against the imposition or collection of taxes without authority of law is provided by Article 265 of the Constitution, not Article 31(1). Since Article 265 is not a fundamental right, such challenges cannot be pursued via a writ petition under Article 32.
Headnote:(A) Constitution of India - Articles 14, 31(1), 32 and 265 - Taxation - Retrospective assessment - Equality before law - Right to property - Whether protection against imposition of tax without authority of law is a fundamental right under Article 31(1) or a statutory right under Article 265 - If the latter, whether such a right can be enforced via a petition under Article 32. (Paras 9, 12)
(B) Article 14 - Reasonable classification - Provision that pending proceedings should be concluded according to the law applicable at the time when the rights or liabilities accrued and the proceedings commenced is a reasonable law founded upon a reasonable classification of assessees. (Para 9)
(C) Article 31(1) and Article 265 - Distinction between deprivation of property and taxation - Protection against imposition and collection of taxes save by authority of law is secured by Article 265 and not by Article 31(1) - Article 265, not being in Part III of the Constitution, does not grant a fundamental right enforceable under Article 32. (Para 12)
Facts of the case:
A resident of a state that had no income-tax law prior to its integration into a Union was assessed for income accrued before the date of integration, based on an Ordinance extending the tax laws of another state in the Union. The petitioner challenged the assessment, alleging discrimination under Article 14 and deprivation of property under Article 31(1).
Findings of Court:
The court found that no discrimination occurred under Article 14 as the difference in treatment between states was due to the absence of pending proceedings in the petitioner's state. Furthermore, the court held that Article 265, which prohibits taxes without authority of law, is the specific provision governing taxation, making Article 31(1) inapplicable to tax levies.
Issues: Whether the retrospective assessment of income tax violated the fundamental right to equality under Article 14 and whether the challenge to the legality of the tax levy could be maintained as a violation of the right to property under Article 31(1) through a petition under Article 32.
Ratio Decidendi: The court ruled that taxation is distinct from the compulsory acquisition of property. Since Article 265 specifically addresses the authority of law for taxing, Article 31(1) cannot be invoked for tax challenges. As Article 265 is not a fundamental right, it cannot be enforced under Article 32.
Result: Petition dismissed with costs.
S.R.DASS, J.
(1) - This is an application under Art. 32 of the Constitution for appropriate orders for the protection of what the petitioner claims to be his fundamental rights guaranteed by Arts. 14 and 31. This is said to be a test case for on its decision, we are told, depend the rights of numerous other persons whose interests are similar to those of the petitioner.
(2) THERE is no serious controversy as to the facts material for the purpose of this application. They are shortly as follows: On 5/5/1948 the then Rules of eight Punjab States including Patiala and Nabha with the concurrence and guarantee of the Government of India entered into a Covenant agreeing to unite and integrate their territories in one State with a common executive, legislature and judiciary by the name of Patiala and East Punjab States Union, hereinafter compendiously referred to as the Pepsu. By Art. III (6) of the Covenant the then Ruler of Patiala became the first President or Raj Pramukh of the Council of Rulers and he is to hold the office during his lifetime. Article VI of the covenant is as follows:
" (1) The Ruler of each Covenanting State shall, as soon as may be practicable, and in any event not later than 20/8/1948, make over the administration of his State to the Raj Pramukh, and thereupon,
(A) all rights, authority and jurisdiction belonging to the Ruler which appertain, or are incidental to the Government of the Covenanting State shall vest in Union and shall hereafter be exercisable only as provided by this Covenant or by the Constitution to be framed thereunder;
(B) all duties and obligations of the Ruler pertaining or incidental to the Government of the Covenanting State shall devolve on the Union and shall be discharged by it;
(C) all the assets and liabilities of the Covenanting State shall be the assets and liabilities of the Union, and
(D) the military forces, if any of the Covenanting State shall become the military forces of the Union."
(3) ARTICLE X provides for the formation of a Constituent Assembly to frame a constitution of a unitary type for the Union within the framework of the Covenant and the constitution of India. This constituent Assembly was also to function as the interim Legislature of the Union until an elected Legislature came into being. The proviso to cl. (2) of that Article runs as follows:
" Provided that until a Constitution framed by the Constituent Assembly comes into operation after receiving the assent of the Raj Pramukh, the Raj Pramukh shall have power to make and promulgate Ordinances for the peace and good Government of the Union or any part thereof, and any Ordinance so made shall, for the space of not more than six months from its promulgation have the like force of law as an Act passed by the Constituent Assembly; but any such Ordinance may be controlled or superseded by any such Act."
(4) THIS Union was inaugurated on 15/7/1948 and the Raj Pramukh thereafter took over the administration of the different covenanting states. The administration of Nabha State was taken over by the Raj Pramukh on 20/8/1948.
ON the same day the Raj Pramukh, in exercise of the powers vested in him, promulgated an Ordinance, 2005 called the Patiala and East Punjab States Union Administration Ordinance, 2005. The following provisions of this Ordinance are relevant for our purpose:
"1. (2) It shall extend to the territories included in the Covenanting States on and from the date on which the administration of any of the said State or States has been or is made over to the Raj Pramukh.
3. As soon as the administration of any Covenanting State has been taken over by the Raj Pramukh as aforesaid, all laws, Ordinances, Acts, Rules, Regulations, Notifications, Hidayats and Firmans-i-Shahi having force of law in Patiala State on the date of commencement of this Ordinances shall apply mutatis mutandis to the territories of the said State and with effect from that date all laws in force in such coven
