Basheshar Nath Vs. The Commissioner of Income-Tax, Delhi & Rajasthan & ANR [1958] INSC 117 (19 November 1958)
DAS, SUDHI RANJAN (CJ) BHAGWATI, NATWARLAL H.
DAS, S.K.
KAPUR, J.L.
SUBBARAO, K.
CITATION: 1959 AIR 149 1959 SCR Supl. (1) 528
CITATOR INFO :
R 1960 SC1080 (24) E&R 1960 SC1125 (26) R 1961 SC1457 (6) RF 1962 SC 92 (6,11) MV 1966 SC1089 (54) RF 1967 SC1643 (14) E 1970 SC 898 (60) RF 1973 SC1461 (311,313,405,447,533,1693,1933 RF 1975 SC1121 (18) RF 1975 SC2299 (344,528) R 1976 SC1207 (157,516) RF 1977 SC1496 (18) RF 1979 SC 25 (40) RF 1980 SC1362 (24) RF 1981 SC 679 (12) R 1986 SC 180 (29) D 1987 SC 925 (13) RF 1990 SC1480 (52) C 1991 SC 101 (257)
ACT:
Income-tax-Evasion of taxation-Case referred to Investigation Commission-Commencement of the Constitution Settlement of case --Constitutional validity of-Waiver of fundamental right, if permissible-Taxation of Income (Investigation Commission) Act, 1947 (30 Of 1947), s. 8AConstitution of India, Art. 14, Part III.
HEADNOTE:
The two questions for determination in this appeal were, (1) whether a settlement under s. 8A of the Taxation of Income (Investigation Commission) Act, 1947 (30 Of 1947) made after the commencement of the Constitution was constitutionally valid and (2) whether the waiver of a fundamental right was permissible under the Constitution. The appellant's case was on July 22, 1948, referred by the Central Government under S. 5(1) of the Act to the Investigation Commission for investigation and report. The Commission directed the authorised official under s. 6 of the Act to examine the appellant's accounts. He submitted his final report by the end of 1953. The Commission considered the report heard the assessee and came to the conclusion that Rs. 4,47,915 had escaped assessment. Thereupon the appellant on May 20, 1954, applied to the Commission for a settlement of his case under s. 8A of the Act, agreeing to pay Rs. 3,50,000 by way of tax and penalty at the concessional rate. The Commission reported to the Central Government approving of the settlement, the Central Government accepted it and it was recorded by the Commission. The Central Government directed the recovery of the said amount under s. 8A(2) of the Act.
The appellant was permitted to make payments by monthly installments of Rs. 5,000 and the total amount thus paid up to September 8, 1957, aggregated to Rs. 1,28,000. In the meantime the Income Tax Officer issued a certificate and certain properties of the appellant were attached. Relying on the decisions of this Court in Suraj Mall Mohta and Co. v. A. V. Visvanatha Sastri, [1955] 1 S.C.R. 448 and M. Ct. Muthiah v. The Commissioner of Income-tax, Madras, [1955] 2 S.C.R. 1247, the appellant applied to the Commissioner of Income-tax challenging the validity of the settlement made under s. 8A of the Act on the ground that S. 5(1) Of the Act on which it was founded had been declared void by this Court, and claimed that his properties might be released from attachment and the amount paid under the settlement might be refunded to him., On January 29, 1958, the Commissioner of Income Tax sent a reply to the appellant maintaining that the settlement was valid and 529 that the appellant was bound there under to pay up the arrears of installments and requesting him to continue to pay in future. Against this decision of the Commissioner of Income Tax the. appellant came up to the Supreme Court by special leave. It was contended on behalf of the respondent that the Act laid down two distinct and separate procedures, one for investigation and the other for settlement and it was the former alone and not the D, latter that was affected by the decisions of this Court. and that the appellant by voluntarily entering into the settlement had waived his fundamental right founded on Art. 14 of the Constitution.
Held (Per Curiam), that both the contentions must fail.
It was not correct to say that the Taxation of Income (Investigation Commission) Act, 1947, laid down two different procedures, one for investigation and assessment under s. 8(2) of the Act and another for settlement under s. 8A of the Act and assessment in terms of such settlement and that while the decision of this Court in M. Ct. Muthiah v. The Commissioner of Income tax, Madras, declaring s. 5(1) of the Act to be discriminatory and therefore void, affected only the former procedure and not the latter. The Act laid down but one procedure and in entertaining a proposal for settlement as in the investigation itself the Commission exercised the same jurisdiction, and powers and followed the one and the same procedure as laid down by ss. 5, 6 and 7 Of the Act. Since the settlement in the instant case was no exception to that rule, it was covered by the decision and must be held to be violative of Art. 14 Of the Constitution.
M. Ct. Muthiah v. The Commissioner of Income-tax, Madras, [1955] 2 S.C.R. 1247, applied.
The observations made in the majority judgment of this Court in Syed Qasim Razvi v. The State of Hyderabad, [1953] S.C.R. 589, must be kept strictly confined to the special facts of that case and had no application to the facts of the present case.
Syed Qasim Razvi v. The State of Hyderabad, [1953] S.C.R. 589, held inapplicable.
Per Das, C. J., and Kapur J.-There could be no waiver of the fundamental right founded on Art. 14 Of the Constitution and it was not correct to contend that the appellant had by entering into the settlement under s. 8A of the Act, waived his fundamental right under that Article. Article 14 was founded on a sound public policy recognised and valued all over the civilised world, its language was the language of command and it imposed an obligation on the State of which no person could, by his act or conduct, relieve it. As it was not strictly necessary for the disposal of this case, the question whether any other fundamental right could be waived need not be considered in this connection.
Laxamanappa Hanumantappa jamkhandi v. The Union of India, [1955] 1 S.C.R. 769; Dewan-Bahadur Seth Gopal Das Moht 67 530 v. The Union of India, [1955] 1 S.C.R.773; Baburao Narayanrao Sanas v. The Union Of India, [1954] 26 I.T.R.
725; Subedar v. State, A.I.R. 1957 All. 396 and Pakhar Singh v. The State, A.I.R. 1958 Punj. 294, distinguished and held inapplicable.
Per Bhagwati and gubba Rao, jj.-There could be no waiver '.,not only of the fundamental right enshrined in Art. 14 but also of any other fundamental right guaranteed by Part III of the Constitution. The Constitution made no distinction between fundamental rights enacted for the benefit of the individual and those enacted in the public interest or on grounds of the public policy. There could, therefore, be no justification for importing American notions or authority of decided cases to whittle down the transcendental character of those rights, conceived in public interest and subject only to such limitations as the Constitution had itself thought fit to impose.
Article 13(2) was in terms a constitutional mandate to the State in respect of all the fundamental rights enacted in Part III of the Constitution and no citizen could by waiver of any one of them relieve the State of the solemn obligation that lay on it. The view expressed by Mahajan, C. J., in Behram Khurshed Pesikaka v. The State of Bombay, [1955] 1 S.C.R. 613, correctly laid down the law on the point. Since the arguments in the instant case had covered the entire field of fundamental rights, there was no reason why the answer should be confined to Art. 14 alone.
Behram Khurshed Pesikaka v. The State of Bombay, [1955] 1 S.C.R. 613; State of Travancore-Cochin v. The Bombay Co., Ltd., [1954] S.C.R. 1112 and The State of Bombay v. R. M. D. Chamarbaugwala, [1957] S.C.R. 874, referred to.
Per S. K. Das, J.-It seems clear that Art. 13 itself recognises the distinction between absence of legislative power which will make the law made by an incompetent legislature wholly void, and exercise of legislative power in contravention of a restriction or check on such power, which will make the law void to the extent of the inconsistency or contravention; therefore the mere use of the word " void " in Art. 13 does not necessarily militate against the application of the doctrine of waiver in respect of the provisions contained in Part III of the Constitution.
Behram Khurshed Pesikaka v. The State of Bombay, [1955] 1 S.C.R. 613, considered.
Bhikaji Narain Dhakyas v. The State of Madhya Pradesh, [1955] 2 S.C.R. 589; M. Ct. Muthiah v. The Commissioner of Income-tax, Madras, [1955] 2 S.C.R. 1247 and The State of Bombay v. R.M.D. Chamarbaugwala, [1957] S.C.R. 874, referred to.
There was nothing in the two preambles to the Indian and the American Constitutions that could make the doctrine of waiver applicable to the one and not to the other; since the doctrine 531 applied to the constitutional rights under the American Constitution, there is no reason why it should not apply to the fundamental rights under the Indian Constitution.
Case-law considered.
But it must be made clear that there is no absolute rule, or one formulated in the abstract, as to the applicability of that doctrine to fundamental rights and such applicability must depend on (1) the nature of fundamental right to which it is sought to be applied and (2) the foundation on the basis of which the plea is raised. The true test must be whether the fundamental right is one primarily meant for the benefit of individuals or for the benefit of the general public.
Where, therefore, the Constitution vested the right in the individual, primarily intending to benefit him and such right did not impinge on the rights of others, there could be a waiver of such right provided it was not forbidden by law or did not contravene public policy or public morals.
As in the instant case the respondents who had raised the plea, had failed to prove the necessary facts on which it could be sustained, the plea of waiver must fail.
Per Subba Rao, J.-Apart from the question as to whether there could be a waiver in respect of a fundamental right, s. 5(1) of the Taxation of Income (Investigation Commission) Act, 1947, having been declared void by this Court in M. Ct. Muthiah v. The Commissioner of Income-tax, Madras, as being violative of the fundamental right founded on Art' 14 Of the Constitution and such decision being binding on all courts in India, the Commissioner of Income-tax had no jurisdiction to continue the proceedings against the appellant under that Act and the appellant could not by a waiver of his right confer jurisdiction on him.
No distinction could be made under Art. 13(1) of the Constitution between the constitutional incompetency of a legislature and constitutional limitation placed on its power of legislation, for a statute declared void on either ground would continue to be so, so long as the inconsistency continued. As the inconsistency of S. 5(1) of the Act with Art. 14 continued, it must continue to be void.
Keshavan Madhava Menon v. The State of Bombay, [1951] S.C.R. 228; Behram Khurshed Pesihaka v. State of Bombay, [1955] 1 S.C.R. 613 and Bhikaji Narain Dhakras v. State of Madhya Pradesh, [1955] 2 S.C.R. 589, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.208 of 1958.
Appeal by special leave from the order dated January 29, 1958, of the Commissioner of Income-tax,Delhi & Rajasthan at New Delhi, under s. 8A(2) of the 532 Taxation on Income (Investigation Commission) Act, 1947.
Harnam Singh and Sadhu Singh for the appellant.
M. C. Setalvad, Attorney-General for India, C. K. Daphtary, Solicitor-General of India, B. Sen and R. H. Dhebar for the respondents.
A. C. Mitra and B. P. Maheshwari, for the interveners.
1958. November 19. The Judgment of Das, C. J., and Kapur, J.,, was delivered by Das, C. J. Bhagwati, S. K. Das and Subba Rao, JJ., delivered separate judgments.
DAS, C. J.-This appeal by special leave filed by one Shri Besheshar Nath hereinafter referred to as ",the assessee " calls in question the validity of a settlement made under s. 8A of the Taxation on Income (Investigation Commission) Act, 1947 (30 of 1947), hereinafter referred to as " the Investigation Act ". This Act, which came into force on May 1, 1947, by a notification issued by the Central Government under s. (1) (3) thereof, has had a short but chequered career, as will appear from the facts hereinafter stated.
In order to appreciate the several questions canvassed before us it is necessary to refer to the provisions of the impugned Act. Section 3 authorised the Central Government to constitute an Income Tax Investigation Commission (hereinafter called the Commission) and imposed on it the following duties:" (a) to investigate and report to the Central Government on all matters relating to taxation on income, with particular reference to the extent to which the existing law relating to, and procedure for, the assessment and collection of such taxation is adequate to prevent the evasion thereof;
(b) to investigate in accordance with the provisions of this Act any case or points in a case -referred to it under section 5 and make a report thereon (including such interim report ' s as the Commission may think fit) to the Central Government in respect of all or any of the assessments made in relation to the case 533 before the date of its report or interim report, as the case may be." We may skip over s. 4 which dealt with the composition of the Commission. Section 5, which is of importance was as follows:" 5. (1) The Central Government may at any time' before the 30th day of June, 1948, refer to the Commission for investigation and report any case or points in a case in which the Central Government has prima facie reasons for believing that a person has to a substantial extent evaded payment of taxation on income, together with such material as may be available in support of such belief, and may at any time before the 30th day of June, 1948, apply to the Commission for the withdrawal of any case or points in a case thus referred, and if the Commission approves of the withdrawal, no further proceedings shall thereafter be taken by or before the Commission in respect of the case or points so withdrawn.
(2) The Commission may, after examining the material submitted by the Central Government with reference to any case or points in a case and making such investigation as it considers necessary, report to the Central Government that in its opinion further investigation is not likely to reveal any substantial evasion of taxation on income and on such report being made the investigation shall be deemed to be closed.
(3) No reference made by the Central Government under subsection (1), at any time before the 30th day of June, 1948, shall be called in question, nor shall the sufficiency of the material on which such a reference has been made be investigated in any manner by any Court.
(4) If in the course of investigation into any case or points in a case referred to it under sub-section (1), the Commission has reason to believe(a)that some person other than the person whose case is being investigated has evaded payment of taxation on income, or (b) that some points other than those referred to 534 it by the Central Government in respect of any case also require investigation, it may make a report to the Central Government stating its reasons for such belief and, on receipt of such report, the Central Government shall, notwithstanding anything contained in sub-section (1), forthwith refer to the Commission for investigation the case of such other person or such additional points as may be indicated in that report." The date " 30th day of June, 1948 " appearing in sub-ss. (1) and (3) was, by Act 49 of 1948, substituted by the words " 1st day of September, 1948 ". Section 6 set out the various powers conferred on the Commission and s. 7 prescribed the procedure of the Commission. It is not necessary to set out the various powers and the details of the procedure in extension and it will suffice to say that they have been considered by this Court and pronounced to be much more drastic and harsh than the powers to be exercised and the procedure to be followed by the income tax authorities acting under the provisions of the Indian Income Tax Act, 1922. The relevant portions of s. 8 ran as follows:" 8. (1) Save as otherwise provided in this Act, the materials brought on record shall be considered by all the three members of the Commission sitting together and the report of the Commission shall be in accordance with the opinion of the majority.
(2) After considering the report, tile Central Government shall by order in writing direct that such proceedings as it thinks fit under the Indian Income Tax Act, 1922, the Excess Profits Tax Act, 1940, or any other law, shall be taken against the person to whose case the report relates in respect of the income of any period commencing after the 31st day of December, 1938; and, upon such a direction being given, such proceedings may be taken 'and completed under the appropriate law notwithstanding the restrictions contained in section 34 of the Indian Income Tax Act, 1922, or section 15 of the Excess Profits Tax Act, 1940, or any other law and notwithstanding any lapse of time or any decision to a different effect given 535 in the case by any Income tax authority or Income Tax Appellate Tribunal.
(3).........................................................
(4) In all assessment or re-assessment proceedings taken in pursuance of a direction under sub-section' (2), the findings recorded by the Commission on the case or on the points referred to it shall, subject to the provisions of sub-sections (5) and (6), be final; but no proceedings taken in pursuance of such direction shall be a bar to the initiation of proceedings under section 34 of the Indian Income Tax Act, 1922.
(5).........................................................
(6).........................................................
(7) Notwithstanding anything to the contrary contained in this Act or in any other law, for the time being in force, any evidence in the case admitted before the Commission or an authorised official shall be admissible in evidence in any proceedings directed to be taken under sub-section (2).
(8).........................................................
Section 9 barred the jurisdiction of Courts to call in question any act or proceeding of the Commission or any authorised official appointed under s. 6. Section 10 gave power to the Central Government to make rules by notification in the official gazette.
On July 22, 1948, the case of the assessee was referred to the Commission in the following terms:
" Ministry of Finance (Revenue Division) New Delhi, the 22nd July, 1948.
Under section 5 (1) of the Taxation on Income (Investigation Commission) Act, 1947, the cases of the following persons are hereby referred to the Investigation Commission for investigation and report, as the Central Government has prima facie reasons for believing that each such person has either alone or in combination with the other persons mentioned below, evaded payment of taxation on income to a substantial 536 extent. The material available in support of 'such belief accompanies.
-----------------------------------------------------------No. Name -----------------------------------------------------------EP. 829/1 Beshashar Nath and Co.
829/2 Lala Beshashar Nath.
Sd./-Pyare Lal, Deputy Secretary, Ministry of Finance (Revenue Division).
The Secretary,Income-tax, Investigation Commission, New Delhi." It is not necessary to set out the annexures that accompanied this Orders It appears that the total wealth statement of the assessee was filed on November 10, 1948, and was forwarded to the authorised official. It also appears that from January 8, 1949, to October 14, 1949, the authorised official was engaged in the collection of assessment records of the assessee from the territorial income tax offices and of materials from the Civil Supplies Directorate regarding the assessee. In the meantime by a. 33 of Act 67 of 1949 the following section was inserted in the Act as s. 8A:" 8A. Settlement of cases under investigation:(1) Where any Person concerned in any case referred to or pending before the Commission for investigation applies to the Commission at any time during such investigation to have the case or any part thereof settled in so far as it relates to him, the Commission shall, if it is of opinion that the terms of the settlement contained in the application may be approved, refer the matter to the Central Government, and if the Central Government accepts the terms of such settlement, the Commission shall have the terms thereof recorded and thereupon the investigation, in so far as it relates to matters covered by such settlement, shall be deemed to be closed.
(2) For the purpose of enforcing the terms of any, settlement arrived at in pursuance of sub-section (1), 537 the Central Government may direct that such proceedings as may be appropriate under the Indian Income-tax Act, 1922 (XI of 1922), the Excess Profits Tax Act, 1940 (XV of 1940), or any other law may be taken against the person to whom the settlement relates, and in particular the provisions of the second proviso to clause (a) of-sub-section (5) of section 23, section 24B, the proviso to sub-section 2 of section 25A, the proviso to subjection 2 of section 26 and sections 44 and 46 of the Indian Income-tax Act, 1922, shall be applicable to the recovery of any sum specified in such settlement by the, Income Tax Officer having jurisdiction to assess the person by whom such sum is payable as if it were income-tax or an arrear of income-tax within the meaning of those provisions.
(3) Subject to the provisions of sub-section (6) of section 8, any settlement arrived at under this section shall be conclusive as to the matters stated therein, and no person whose case has been so settled be entitled to re-open in any proceeding for the recovery of any sum under this section or in any subsequent assessment or reassessment proceeding relating to taxation on income or in any other proceeding before any Court or other authority any matter which forms part of such settlement.
(4) Where a settlement has been accepted by Government under sub-section (1), no proceedings under section 34 of the Indian Income Tax Act, 1922 (XI of 1922), or under section 15 of the Excess Profits Tax Act, 1940 (XV of 1940), shall be initiated in respect of the items of income covered by the settlement, unless the initiation of such proceedings is expressly allowed by the terms of the settlement." On July 5, 1949, the total wealth statement was received back from the authorised official. Our Constitution came into force on January 26, 1950. The order-sheet shows that the authorised official on May 26, 1950, issued a notice to the assessee fixing the hearing for June 10, 1950, which indicates that the authorised official was proceeding with the investigation set in motion by the reference of the assessee's 68 538 case to the Commission. The assessee appears to have attended on June 6, 1950, with an application for extension of time which apparently was given. On September 30, 1950, the assessee supplied certain statements of his firm. The entry in the order-sheet ,,,against the date October 31, 1950, shows that the assessee asked for further extension of time. There appears to be a hiatus of about 3 years and evidently nothing was done until June 9, 1953, when the authorised official fixed the hearing of the case on June 15, 1953. The authorised official submitted his interim report to the Commission on June 9. 1953. The assessee was examined on October 9, 10 and 13, 1953, and the authorised official submitted his final report on October 19, 1953. On January 30, 1954, notice was issued to the assessee to appear before the Commission on February 15, 1954.
Presumably to get ready for the hearing the assessee, on February 5, 1954, asked for inspection of certain assessment orders concerning his case-, for the return of his lease deed filed by him and a copy of the statement of one L. Kalidas and for production of certain documents before the Commission. The hearing, which had been fixed for February 15, 1954, was adjourned till March 4, 1954. Witness Kalidas was examined on March 4,. 1954. On March 29, 1954, the assessee asked for a, copy of the deposition given by the witness Durgadas before the Commission. After the evidence was closed notice was issued to the assessee on May 1, 1954, asking him to appear before the Commission on May 19, 1954.
On that date the assessee attended, arguments were heard and orders were reserved. Learned counsel for the assessee states that at the close of the arguments on May 19, 1954, the Commission announced its view that the income, profits and gains that had escaped assessment in the hands of the assessee for the period beginning with April 1, 1939, and ending March 31, 1947, were the sum of Rs. 4,47,915, that the Commission also threw a hint that should the assessee accept the said finding he would be granted the benefit of a settlement on the lower concessional basis of. payment of 75% and a small penalty of Rs. 14,064 539 other alternative than to make the best of the bad job by proposing a settlement under s. 8A offering to pay Rs.
3,50,000 by way of tax and penalty. This sequence of events is amply borne out by paragraphs 3 and 4 of the settlement application filed by the assessee on May 20, 1954, a copy of which has been produced before us by the respondents. The Commission on May 24, 1954, made a report under s. 8A (1) to the Central Government that it was of opinion that the terms of settlement contained in the application might be approved. The Central Government having accepted the proposed settlement, the Commission had the terms thereof recorded. The Central Government by its Order C No. 74 (9IT) 54 made on July 5, 1954, under s. 8A (2) of the Investigation Act directed that demand notice in accordance with the said terms be served immediately by the Income Tax Officer and that all such other proceedings under the Indian Income Tax Act or other law as may be necessary be taken with a view to enforce the payment of the demand and that the entire sum of Rs. 3,50,000 be demanded in one sum. It appears, however, that the assessee was allowed to make payments by installments of Rs. 5,000, per month.
In the meantime on May 28, 1954, this Court delivered judgment in Suraj Mall Mohta and Co. v. A. V. Visvanatha Sastri (1). In that case in the course of investigation of the case of Messrs. Jute and Gunny Brokers Ltd. which had been referred to the Commission under s. 5 (1) of the Investigation Act, it was alleged to have been discovered by the Commission that Suraj Mall Mohta and Co. had made large profits which they had not disclosed and had thus evaded taxation. A report to that effect having been made on August 28, 1953, by the Commission to the Central Government under s. 5 (4) of the Investigation Act the Central Government on September 9, 1953, referred the case against Suraj Mall Mohta and Co. to the Commission under the provisions of s. 5 (4). On September 15, 1953, the Commission notified Suraj Mall [1955] 1 S.C.R.448 540 Mohta and Co. that their cases had been referred for investigation and called upon them to furnish certain materials, details of which were set out in annexure to the petition. On April 12, 1954, Suraj Mall Mohta and Co. filed a petition under Art. 32 of the Constitution asking for an appropriate writ restraining the, Commission from taking any action on the ground that the provisions of the Investigation Act had become void being discriminatory in character. By that judgment this Court held that both s. 34 of the Indian Income Tax Act, 1922, as it then stood, and sub-s. (4) of s. 5 of the Investigation Act dealt with persons who had similar characteristics of being persons who had not truly disclosed their income and had evaded payment of tax on their income but that as the procedure prescribed by the Investigation Act was substantially more prejudicial than the procedure under the Indian Income Tax Act, 1922, sub-s. (4) of s. 5 and the procedure prescribed by the Investigation Act,-in so far as it affected persons proceeded against under that sub-section was a piece of discriminatory legislation which offended the provisions of Art. 14 of the Constitution and was, therefore, void and unenforceable.
Sub-section (4) of s. 5 of the Investigation Act having been declared void, Parliament passed the Indian Income Tax Amendment Act (33 of 1954) amending s. 34 of the Indian Income Tax Act, 1922. Paradoxical as it may seem, the result of this amendment was that persons who originally, fell only within the ambit of s. 5 (1) of the Investigation Act and formed a distinct class of substantial tax evaders also came within the amended s. 34 of the Indian Income Tax Act, 1922. The position after the amendment, therefore, was that the Income Tax Officers could pick out some of these persons and refer their cases under s. 5 (1) of the Investigation Act and thereby subject them to the drastic and harsh procedure of that Act, while they could deal with other persons similarly situate under s. 34 as amended and apply to them the comparatively more beneficial procedure laid down in the Indian Income Tax Act, 1922. Promptly several applications were 541 made under Art. 32 of the Constitution complaining that after the amendment of s. 34 of the Indian Income Tax Act, s. 5 (1) of the Investigation Act became discriminatory in that the persons falling within it could be dealt with under the drastic, prejudicial and harsh procedure prescribed by the Investigation Act, while other persons similarly situate and belonging to the same category could at the whim or pleasure of the Income Tax authorities be proceeded against under the more beneficial procedure prescribed under the Indian Income Tax Act. All those applications were disposed of by a common judgment reported as Shree Meenakshi Mills Ltd. v. Sri A. V. Visvanatha Sastri (1) This Court held that s. 34 of the Income Tax Act, as amended by the Indian Income Tax Amendment Act, 1954 (33 of 1954), operated on the same field as s. 5 (1) of the Investigation Act, and, therefore, s. 5 (1) had become void and unenforceable as the procedure applied to persons dealt with there under became discriminatory in character. It should be noted that in none of those petitions disposed of by that judgment had any assessment been made under the Investigation Act and this Court only prohibited further proceedings before the Commission under the Investigation Act. The assessee appellant now before us who had entered into a settlement under s. 8 of the Investigation Act and had been assessed in accordance with the terms of the settlement continued to pay the tax by monthly installments of Rs. 5,000 as before.
Finally on December 20, 1955, came the decision of this Court in M. CT. Muthiah v. The Commissioner of Income Tax, Madras (2). In that case the Central Government had under s.
5 (1) of the Investigation Act referred the case to the Commission. The Commission after holding an enquiry recorded its findings and held that an aggregate sum of Rs.
10,07,322-4-3 represented the undisclosed income during the period under investigation. The Commission having submitted its report to the Central Government, the latter acting under s. 8 (2) of the Investigation Act directed that appropriate action under the (1) [1955] 1 S. C. R. 787.
(2) [1955] 2 S. C. R. 1247.
542 Indian Income Tax Act, 1922, be taken against that assessee with a view to assess or re-assess the income which had escaped assessment for the period 1940-41 to 1948-49. The Income Tax Officer accordingly issued notices 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 was treated as final and conclusive. These assessment orders were served on that assessee. There was, however, no re.
assessment order for the year 1942-43. In regard to the assessment orders which had been served the assessee concerned applied to the Commissioner of Income Tax under S.
8 (5) of the Investigation Act for reference to the High Court on questions of law arising out of those re-assessment orders. During the pendency of those proceedings the assessee, in that case on December 6, 1954, filed a petition contending that the provisions of the Investigation Act were illegal, ultra vires and unconstitutional. The majority of this Court held that different persons, though falling under the same class or category of substantial evaders of income.
tax, were being subjected to different procedures, one a summary and drastic procedure and the other the normal procedure which gave to the assessees various rights which were denied to those who were specially treated under the -procedure prescribed by the Investigation Act and, therefore, the assessments made under s. 8 (2) were void and unenforceable. That was a case of assessment under s. 8 (2) in invitum after an investigation under the Investigation Act. The assessee appellant before us, who had at the end of the investigation entered into a settlement and been assessed in accordance with the terms of such settlement, however, went on making payments in discharge of the balance due under the terms of settlement right up to September 8, 1957, when he made the last payment of Us. 8,000 bringing the aggregate payment up to Rs. 1,28,000.
In the meantime the Income Tax Officer had sent a certificate requesting the Collector of Delhi for the recovery of the balance due by the assessee under the settlement. In execution of that certificate some of 543 the properties belonging to the assessee situate in Dharamsalla and Hissar were attached. On December 27, 1957, the assessee made an application to the Income Tax Commissioner. After pointing out that between July 5, 1954, and December 27, 1957, the petitioner had paid in all Rs. 1,28,000 towards the-' discharge of his liability under the settlement and referring to the decisions of this Court in suraj Mall Mohta's case (1) and Muthiah's case (2) the assessee submitted that the settlement under a. 8A of the Investigation Act had no force and did not bind the petitioner and that the settlement had been made under the pressure of the situation and in view of the coercive machinery of the Investigation Act and that from either point of view the settlement was not binding. His contention was that when s. 5(1) of the Investigation Act had been held unconstitutional the settlement under s. 8A could not be enforced, for the foundation of the proceedings under s. 8A was the reference under s. 5(1) and the foundation having crumbled down the superstructure must fall with it. Under the circumstances the assessee submitted that the attached properties be released and the amount already recovered under the settlement be refunded. On January 29, 1958, the Income Tax Commissioner sent the following communication to the assessee:No. L-228(1)/54-55/17590 Office of the Commissioner Income Tax Delhi and Rajasthan, New Delhi.
Dated, New Delhi the 29th January, 1958. Shri Besheshar Nath, 9, Barakhamba Road, New Delhi.
Dear Sir, Sub:-Taxation on Income (Investigation Commission) Act, 1947-Order u/s 8A(2)-Your petition dated 27th December, 1957.
With reference to your petition dated 27th December, 1957, regarding the settlement arrived at (1) [1955] 1 S.C.R. 448.
(2) [1955] 2 S.C.R. 1247.
544 under section 8A(2) of the Taxation on Income (Investigation Commission) Act, 1947, I am to inform you that the settlement is valid and binding on you.
2. You are, therefore, requested to make good arrears of installments which you have not paid recently by 5th February, 1958, and also to continue making the payments in accordance with the installments scheme agreed to, failing which the recovery proceedings will be vigorously pursued through the usual recovery channels.
Your's faithfully, Sd./S. K. Gupta, Commissioner of Income-tax, Delhi & Rajasthan, New Delhi.
Being aggrieved by the above decision the assessee thereupon moved this Court and obtained special leave to appeal against that order. The appeal has now come up for final disposal before us.
It may be mentioned here that as the respondents are anxious to have the matters of controversy raised in this appeal decided and set at rest by a decision of this Court, the respondents, for the purposes of this appeal, have not insisted on their objection that an appeal does not lie under Art. 136 of the Constitution against an order of the Commissioner of Income Tax. Learned counsel for the assessee also has not pressed his claim for refund of the amounts already paid and has pressed the appeal regarding the balance that remains to be paid under the settlement which is characterised as invalid. Model Knitting Industries Ltd. which has a case pending in the High Court of Calcutta where the same questions as are in issue in the appeal before us, are also in issue has been. permitted to intervene and we have heard counsel appearing for that intervener.
In view of the three decisions referred to above learned Attorney General does not seriously contend that the powers conferred on the Commission by s. 6 and the procedure laid down by s. 7 of the Investigation Act are not discriminatory, but what he urges is that none of the said decisions has held that s. 5(1) is 545 wholly void and inoperative. He says that s. 5(1) only authorises the Central Government to refer certain cases to the Commission. Upon such a reference two lines of procedure are clearly indicated by the Investigation Act, namely, (1) that an investigation may be held in invitum following the procedure prescribed and exercising the powers conferred by the lnvestigation Act and (2) that a settlement may be made under s. 8A. If the first procedure is followed and an assessment is made under s. 8(2) such assessment will undoubtedly be invalid as has been held in Muthiah's case (1), but if on a case being referred the settlement procedure is followed then the consequential order of assessment under s. 8A cannot be questioned. We are unable to accept this line of argument as permissible in view of the provisions of the Investigation Act. It will be recalled that when the case of the assessee was referred to the Commission under s. 5(1) on July 22, 1948, there was no provision for settlement in the Act at all. Therefore, that reference, when it was made, consigned the assessee to the only procedure of investigation that was then prescribed by the Act. In the next place it should be remembered that after s. 8A was added in the Investigation Act by s. 33 of Act 67 of 1949 an authorised official was appointed under s. 6(3) to investigate the affairs of the assessee and to examine the books and to interrogate any person or obtain any statement from any person and under sub-s. (4) the authorised official was empowered to exercise the same powers as had been vested in the Commission under sub-ss.
(1) and (2) of s. 6. Further, by its own terms s. 8A made it clear that the person concerned in any case referred to the Commission for investigation might apply to the Commission at any time during such investigation to have the case settled. Therefore this provision for settlement was an integral part of the entire investigation procedure. It was not a separate or independent procedure apart from the investigation procedure. It is true that there was nothing to prevent the assessee from straightaway (1) [1955] 2 S.C.R. 1247.
69 546 making a proposal for settlement before any actual step towards investigation -was taken by the Income Tax authorities, but before the Commission could refer the proposal for settlement to the Central Government it had to be satisfied that the terms of settlement contained in the application were such as might be approved. For the purpose of satisfying itself the Commission had obviously to go into the facts either by itself or through an authorised official and to consider the materials collected by the authorised official and in the process of doing so had to hold an investigation of some sort and that investigation had necessarily to be made in accordance with the procedure prescribed by the Investigation Act itself. It is, therefore, not correct to say that there could be a proceeding for settlement without any investigation at all. In our opinion s. 8A did not provide for a separate procedure at all. When a case was referred under s. 5(1) it was really for investigation and a settlement was something which could crop up in the process of that investigation just as in the course of a suit parties may arrive at some compromise. In recording the compromise and passing a judgment in accordance with the compromise thereof, the court exercises the same jurisdiction as it exercises in entertaining and disposing of the suit itself. Likewise in entertaining a proposal for settlement the Commission exercised its jurisdiction of investigation under s. 5, followed the procedure prescribed by s. 7 and exercised all its powers under s. 6. As already stated the language of s.8A itself shows that a settlement can be proposed only during such investigation. In our judgment, therefore, the contention of the learned Attorney General that the Investigation Act prescribed two procedures is not well founded.
Learned Attorney General then points out that the Investigation Act was a pre-Constitution Act and that before the commencement of the Constitution when there was no such thing as a fundamental right, its provisions could not be questioned however discriminatory the procedure may have been. He urges that after the commencement of the Constitution the 547 assessee has not been subjected to the coercive procedure laid down by the Investigation Act, but voluntarily -proposed a settlement which was accepted by the Central Government on the recommendation of the Commission. In that situation he was in the same position as Qasim Razvi had been in and the observations to be found in the judgment of Mukherjea, J., who delivered the majority judgment in Syed Qasim Razvi v. The State of Hyderabad (1) applied to the present appeal. We do not think it is necessary, for the purpose of this appeal, to go minutely into the facts of Qasim Razvi's case (1) with reference to which the observations relied on had been made, or to analyse the correctness of the reasoning adopted in that case, for that can only be done by a larger Bench. We are definitely of opinion, however, that the observations made in the majority judgement should not be extended but must be kept strictly confined to the special facts of that case. In our judgement those observations have no ~application to the facts of the present appeal before us, for here even after the commencement of the Constitution, the process of investigation continued in that the authorised official went on collecting materials by following the procedure prescribed by s. 7 and exercising the powers conferred on him by s. 6 of the Investigation Act.
The last argument advanced by the learned Attorney General is that if there had been a breach of the assessee's fundamental right by subjecting him to a discriminatory -procedure laid down in the Investigation Act, the asessee, by voluntarily entering into a settlement, must be taken to have waived such breach and cannot now be permitted to set up his fundamental right. Immediately two questions arise for consideration, namely, (1) whether the assessee could waive the breach of the fundamental right in question and (2) whether in the facts and circumstances of this case he had actually done so.
Re. (1): In Behram Khurshed Pesikaka v. State of Bombay (2) there was a general discussion whether a (1) [1953] S.C.R. 589.
(2) [1955] 1 S.C.R. 613.
548 fundamental right could be waived. At page 638 Venkatarama Aiyar, J., observed:" The question is, what is the legal effect of a statute being declared unconstitutional. The answer to it depends on two considerations firstly does the constitutional prohibition which has been infringed affect the competence of the Legislature to enact the law or does it merely operate as a check on the exercise of a power which iswithin its competence; and secondly, if it is merely a check, whether it is enacted for the benefit of individuals or whether it is imposed for the benefit of the general public on grounds of public policy. If the statute is beyond the competence of the Legislature, as for example, when a State enacts a law which is within the exclusive competence of the Union, it would be a nullity. That would also be the position when a limitation is imposed on the legislative power in the interests of the public, as, for instance, the provisions in Chapter XIII of the Constitution relating to inter-State trade and commerce. But when the law is within the competence of the Legislature and the unconstitutionality arises by reason of its repugnancy to provisions enacted for the benefit of individuals, it is not a nullity but is merely unenforceable. Such an unconstitutionality can be waived and in that case the law becomes enforceable. In America this principle is well settled. (Vide Cooley on Constitutional Limitations, Volume 1, pages 368 to 371 ; Willis on Constitutional Law at pages 524, 531, 542 and 558 ; Rottschaefer on Constitutional Law at pages 28 and 29-30)." After referring to three decisions of the American Supreme Court which are also now relied on by the learned Attorney General, the learned Judge concluded as follows:" The position must be the same under our Constitution when a law contravenes a prescription intended for the benefit of individuals. The rights guaranteed under Art. 19 (1) (f) are enacted for the benefit of owners of properties and when a law is found to infringe that provision, it is open to any person whose rights have been infringed to waive it and when there 549 is waiver there is no legal impediment to the enforcement of the law. It would be otherwise if the statute was a nullity; in which case it can neither be waived nor enforced. If then the law is merely unenforceable and can take effect when waived it cannot be treated as non and as effaced out of the statute book. It is scarcely necessary to add that the question of waiver is relevant to the present controversy not as bearing on any issue of fact arising for determination in this case but as showing the nature of the right declared under Art. 19 (1) (f) and the effect in law of a statute contravening it." When the case came up before the court on review Mahajan, C. J., with the concurrence of Mukherjea, Vivian Bose, and Ghulam Hassan, JJ., said at page 653:" In our opinion, the doctrine of waiver enunciated by some American Judges in construing the American Constitution cannot be introduced in our Constitution without a fuller discussion of the matter. No inference in deciding the case should have been raised on the basis of such a theory. The learned Attorney General when questioned about the doctrine did not seem to be very enthusiastic about it. Without finally expressing an opinion on this question we are not for the moment convinced that this theory has any relevancy in construing the fundamental rights conferred by Part III of our Constitution. We think that the rights described as fundamental rights are a necessary consequence of the declaration in the preamble that the people of India have solemnly resolved to constitute India into a sovereign democratic republic and to secure to all its citizens justice, social, economic and political; liberty of thought, expression belief, faith and worship; equality of status and of opportunity. These fundamental rights have not been put in the Constitution merely for individual benefit, though ultimately they come into operation in considering individual rights. They have been put there as a matter of public policy and the doctrine of waiver can have no application to provisions of law which have been enacted as a matter of constitutional policy.
550 Reference to some of the Articles, inter alia, Arts. 15 (1), 20, 21, makes the proposition quite plain. A citizen cannot get discrimination by telling the State " You can discriminate ", or get convicted by waiving the protection given under Arts. 20 and 21." On that occasion one of us preferred not to express any opinion on this subject and said at page 670:" In coming to the conclusion that I have, I have in a large measure found myself in agreement with the views of Venkatarama Aiyar, J., on that part of the case. 1, however, desire to guard myself against being understood to agree with the rest of the observations to be found in his judgment, particularly those relating to waiver of unconstitutionality, the fundamental rights being a mere check on legislative power or the effect of the declaration under Art. 13(1) being " relatively void ". On those topics I prefer to express no opinion on this occasion." It will, however, be noticed that the observations of the learned judges made in that case did not relate to the waiver of a breach of the fundamental right under Art. 14.
The fundamental right, the breach whereof is complained of by the assessee, is founded on Art. 14 of the Constitution.
The problem, therefore, before us is whether a breach of the fundamental right flowing from Art. 14 can be waived. For disposing Of this appeal it is not necessary for us to consider whether any of the other fundamental rights enshrined in Part III of our Constitution can or cannot be waived. We take the view that this court should not make any pronouncement on any question which is not strictly necessary for the disposal of the particular case before it.
We, therefore, confine our attention to Art. 14 and proceed to discuss the question on that footing.
Article 14 runs as follows:" The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India." It is the first of the five Articles grouped together under the heading " Right to Equality". The underlying object of this Article is undoubtedly to secure to 551 all persons, citizen or non-citizens, the equality of status and of opportunity referred to in the glorious preamble of our Constitution. It combines the English doctrine of the rule of law and the equal protection T. clause of the 14th Amendment to the American Federal Constitution which enjoins that no State shall deny to any person within its jurisdiction the equal protection of the laws ". There can, therefore, be no doubt or dispute that this Article is founded on a sound public policy recognised and valued in all civilised States. Coming then to the language of the Article it must be noted, first and foremost that this Article is, in form, an admonition addressed to the State and does not directly purport to confer any right on any person as some of the other Articles, e.g., Art. 19, do. The obligation thus imposed on the State, no doubt, enures for the benefit of all persons, for, as a necessary result of the operation of this Article, they all enjoy equality before the law. That is, however, the indirect, though necessary and inevitable, result of the mandate. The command of the Article is directed to the State and the reality of the obligation thus imposed on the State is the measure of the fundamental right which every person within the territory of India is to enjoy. The next thing to notice is that the benefit of this Article is not limited to citizens, but is available to any person within the territory of India. In the third place it is to be observed that, by virtue of Art. 12, " the State " which is, by Art.
14, forbidden to discriminate between persons includes the Government and Parliament of India and the Government and the legislature 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. Article 14, therefore, is an injunction to both the legislative as well as the executive organs of the State and the other subordinate authorities. As regards the legislative organ of the State, the fundamental right is further consolidated and protected by the provisions of Art. 13. Clause (1) of that Article provides that all laws in force in the territories of India immediately before the commencement of the Constitution, in so 552 far as they are inconsistent with the provisions of Part III shall, to the extent of the inconsistency be void. Likewise el. (2) of this Article prohibits the State from making any law which takes away or abridges the rights conferred by the same Part and follows it up by saying that any law made in contravention of this clause Shall, to the extent of the contravention, be void. It will be observed that so far as this Article is concerned, there is no relaxation of the restriction imposed by it such as there are in some of the other Articles, e.g., Art. 19, cls. (2) to (6). Our right to equality before the law is thus completely and without any exception secured from all legislative discrimination.
It is not necessary, for the purpose of this appeal to consider whether an executive order is a " law" within the meaning of Art. 13, for even without the aid of Art. 13 our right to the equal protection of the law is protected against the vagaries, if any, of the executive Government also. In this connection the observations of Lord Atkin in Eshugbayi Eleko v. Officer Administering the Government of Nigeria (1) are apposite. Said his Lordship at page 670 that in accordance with British jurisprudence no member of the executive can interfere with the liberty or property of a British subject except when be can support the legality of his act before a court of justice That apart, the very language of Art. 14 of the Constitution expressly directs that " the State ", which by Art. 12 includes the executive organ, shall not deny to any person equality before the law or the equal protection of the law. Thus Art. 14 protects us from both legislative and executive tyranny by way of discrimination.
Such being the true intent and effect of Art. 14 the question arises, can a breach of the obligation imposed on the State be waived by any person ? In the face of such an unequivocal admonition administered by the Constitution, which is the supreme law of the land, is it open to the State to disobey the constitutional mandate merely because 'a person tells the State that it may do so ? If the Constitution asks the State as (1) L.R. [1931] A,.C. 662.
553 to why the State did not carry out its behest, will it be any answer for the State to make that " true, you directed me not to deny any person equality before the law, but this person said that I could do so, for he had no objection to my doing it." I do not think the State will be in any better position than the positions in which Adam found himself when God asked him as to why he had eaten the forbidden fruit and the State's above answer will be as futile as was that of Adam who pleaded that the woman had tempted him and so he ate the forbidden fruit. It seems to us absolutely clear, on the language of Art. 14 that it is a command issued by the Constitution to the State as a matter of public policy with a view to implement its object of ensuring the equality of status and opportunity which every welfare State, such as India, is by her Constitution expected to do and no person can, by any act or conduct, relieve the State of the solemn obligation imposed on it by the Constitution. What. ever breach of other fundamental right a person or a citizen may or may not waive, he cannot certainly give up or waive a breach of the fundamental right that is indirectly conferred on him by this constitutional mandate directed to the State.
The learned Attorney General has relied on various passages in text-books written by well-known and eminent writers, e.g., Cooley, Willoughby, Willis and Rottschaefer and on eight American decisions. In considering the statements of law made by American writers and judges the following observations of Patanjali Sastri, C. J., in The State of Travancore-Cochin and others v. The Bombay Co. Ltd. (1) should constantly be borne in mind scope and purpose, and a varying body of doctrines and tests have grown around them interpreting, extending or restricting, from time to time, their operation and application in the context of the expanding American commerce and industry, and we are of opinion that not much help can be derived from them (1) [1952] S.C.R. 1112,112O, 1121. 70 554 in the solution of the problems arising under Art. 286 of the Indian Constitution." (See also The State of Bombay v. R.M.D. Chamarbaugwala(1)).
The American authorities cited by the Attorney General relate to waiver of obligations under a contract, of the deprivation of right to property without due process of law or of the constitutional right to trial by jury and the like. They have no bearing on the question of the waiver of the equal protection clause of the 14th Amendment which, like our Art. 14, is a mandate to the State. It is significant that no American decision is forthcoming which upholds the waiver of the breach of that clause. When a case of breach of any of the fundamental rights akin to what are dealt with in the American authorities will come before us it will, then, be the time for us to discuss those authorities and to consider their applicability in the matter of the interpretation of the corresponding provisions of our Constitution. For the moment we prefer to confine our observations to a consideration of waiver of the breach of the fundamental right under Art. 14.
Learned Attorney General has relied on three decisions of this Court: (1) Laxmanappa Hanumantappa Jamkhandi v. The Union of India (2), (2) Dewan Bahadur Seth Gopal Das Mohta v. The Union of India (3) and (3) Baburao Narayanrao Sanas v. The Union of India(4) in support of his thesis that a breach of Art. 14 may well be waived by a person. In none of those cases, all of which were disposed of on the same day (October 21, 1954) was the question of waiver specifically or seriously discussed. As learned counsel appearing for the intervener points out, the first of the above mentioned cases proceeded on the footing that as Art.
265 was not a fundamental right conferred by Part III, it could not be enforced under Art. 32. Learned counsel for the intervener further submitted that the decision in the 2nd case mentioned above could also be explained on that basis and on -the further ground that proceeding under Art.
32 was not (1) [1957] S.C.R. 874, 918.
(3) [1955] 1 S.C.R. 773.
(2) [1955] 1 S.C.R. 769 (4) [1954] 26 I.T.R. 725.
intended to be used for obtaining relief against the voluntary action of a person and that appropriate remedy for recovery of money lay in a suit. The decision in the 3rd case proceeded on the same basis and did not carry the matter any further. It is impossible to treat any of those decisions as representing the considered opinion of this Court on the question of waiver of a breath of the fundamental right under Art. 14 of the Constitution.
Reference was also made by the learned Attorney General to the decision of a Single Judge of the Allahabad High Court in Subedar v. State (1) where it was held that Art. 20(3) conferred merely a privilege and that such privilege could always be waived It was overlooked that if a person voluntarily answered any question then there was no breach of his fundamental right at all, for the fundamental right is that a person shall not be compelled to incriminate himself.
That case, therefore, is not a case of waiver at all. The case of Pakhar Singh v. The State (2) is also, for the same reason, not a case of waiver.
Be. (2): The answer to this question depends upon facts which have not been properly investingated. The appeal is against the order of the income tax authorities which order makes no reference to the plea of waiver. Further the filing of the statements of case having been dispensed with, we have not had the benefit of the statement of facts on which this plea is said to be founded. The view taken on question (1), however, relieves us of the necessity of going into this question.
On a consideration of the nature of the fundamental right flowing from Art. 14, we have no doubt in our mind that it is not for a citizen or any other person who benefits by reason of its provisions to waive any breach of the obligation on the part of the State. We are, therefore, of the opinion that this appeal should be accepted, the order of the Income Tax Commissioner, Delhi, dated January 29, 1958, should be set aside and all proceedings now pending for implementation of the order of the Union Government dated July 5, 1954, (1) A. I. R. 1957 All. 396.
(2) A. 1. R. 1958 Punj. 294.
556 should be quashed and that the assessee appellant, should get the costs of this appeal.
BHAGWATI, J.-I agree with the reasoning adopted and the conclusion reached in the judgments prepared by My Lord the Chief Justice and my brother, S. K. Das, J., in regard to the ultra vires character of the proceedings adopted under s. 8-A of the Taxation on Income (Investigation Commission) Act, 1947 (30 of 1947), and the void character of the settlement reached thereunder. As regards the parts of the judgments which deal with the question whether a fundamental right guaranteed by the Constitution can be waived at all, I find myself in agreement with the judgment prepared by my brother, Subba Rao, J., and am of the opinion that it is not open to a citizen to waive the fundamental rights conferred by Part III of the Constitution.
The question of waiver came to be argued before us in this way.If the proceedings and the settlement under section 8-A of the Act were void as aforesaid, the respondent contended that the appellant had waived the fundamental right enshrined in Art. 14 of the Constitution and was therefore not entitled to challenge the settlement. This was only by way of reply to the contention of the appellant and was not set out in proper details in any affidavit filed on behalf of the respondent. The learned Attorney-General, however, relied upon the application made by the appellant before the Investigation Commission and the contents thereof as also the payments made by the appellant from time to time both before and after the pronouncement of our decision in M. Ct. Muthiah v. The Commissioner of Income-tax, Madras (1) in order to support this plea of waiver and the arguments before us proceeded on that basis. No objection was taken by ei