Appeals Nos 143 to 145 of 1954 27 to 30 and 161 to 164 of 1956
Appeals from the judgment and order dated September 14 1953 of the former Travancore Cochin High Court in Original Petitions Nos 53 56 and 57 of 1952
Appeals from the judgment and order dated December 14 1954 of the Mysore High Court in C P Nos
755 52 and 53 and W P Nos 105 and 106 of 1954
Appeals from the judgment and order dated March 22 1955 of the Mysore High Court in Writ Petition No 122 of 1954 and order dated April 7 1955 in WP Nos 35 36 and 37 of 1955
KS Krishnaswami Iyengar M U Isaac and Sardar Bahadur for the appellants in C As
143 45 of 1954
H N Sanyal Addl
Solicitor General of India B Gana pathy Iyer and R H Dhebar for the appellants in C As
27 30 and 161 164 of 1956
R Ganapathy Iyer and R H Dhebar for the respondent in C As
143 145 of 1954
A V Viswanatha Sastri and G Gopalakishnan for the respondents in C As
27 30 of 1956
A V Viswanatha Sastri K R Choudhury and G Gopalakri shnan for the respondents in C As
161 164 of 1956
April 28
The Judgment of the Court was delivered by SK DAS J
This judgment relates to and governs eleven appeals which for convenience have been classified into two groups
The first group may be called the group of Travancore Cochin appeals and within this group fall Civil Appeals Nos 143 to 145 of 1954
The second group may be called the group of Mysore appeals and within this group are eight appeals namely Civil Appeals Nos
27 to 30 of 1956 and 161 to 164 of 1956
By reason of the circumstance that certain common questions of law and fact arise in all these eleven appeals they have been heard one after the other but it will be convenient and will avoid confusion if we state the facts relating to the Travancore Cochin group first and then deal with the questions arising therefrom
We shall then state the additional facts of the Mysore group of appeals and answer the questions arising therefrom in so far only as they have not been answered already in relation to the Travancore Cochin group
It may be here added 756 that in the Travancore Cochin appeals Civil Appeals 143 to 145 of 1954 the appellant is the assessee A N Lakshmana Shenoy of Messrs New Guna Shenoy Company Ernakulam and the two respondents are the Income tax Officers of Ernakulam in Cochin and of Kottayam in Travancore
In the other group of appeals namely the Mysore appeals the appellants are the Income tax Officers of certain income tax circles in Bangalore and the respondents are assessees who carry on business within the jurisdictional area of the said Income tax Officers
In the Travancore Cochin appeals the High Court of Travancore Cochin came to a decision against the assessee while in the Mysore appeals the High Court of Mysore came to an opposite conclusion on identical questions of law that is why in the first group of appeals the assessee is the appellant and in the second group the appellants are the Income tax Officers
Travancore Cochin appeals We proceed now to deal with the Travancore Cochin appeals
The assessee A N Lakshmana Shenoy is a hardware merchant who carried on his trade and business for several years in the then States of Travancore and Cochin with his headquarters at Ernakulam in Cochin
He was assessed to income tax in both the States under the income tax law in force there namely the Cochin Income tax Act of 1117 M E hereinafter referred to as the Cochin Act and the Travancore Income tax Act of 1121 M E hereinafter referred to as the Travancore Act
He was so assessed by the Incometax Officer at Ernakulam for the Cochin State and the Income tax Officer at Kottayam for the Travancore State
It is a matter of history that Cochin and Travancore were formerly independent States and till the lapse of paramountcy the Crown as represented by and operating through the political authorities provided the nexus between those States and the Central Indian Government
The Indian Independence Act 1947 released the States from their obligation to the Crown but in August 1947 the Rulers of the two States acceded to the Dominion of India
This was followed by a process of 757 two fold integration the consolidation of the States into sizeable administrative units and their democratisation
On May 27 1949 the Rulers entered into a covenant which was concurred in by the Government of India
By that covenant the Rulers agreed that as from the first day of July 1949 the States of Travancore and Cochin should be united in and form one State with a common executive legislature and judiciary by the name of the United State of Travancore and Cochin
The covenant further provided that  there shall be a Rajpramukh for the United State and the Ruler of Travancore shall be the first Rajpramukh the executive authority of the United State shall be exercised by the Rajpramukh and there shall be a council of ministers to aid and advise him 
Article IX of the covenant said that  the Rajpramukh shall within a fortnight of the appointed day execute on behalf of the United State an Instrument of Accession in accordance with the provisions of section 6 of the Government of India Act 1935 and in place of the earlier Instruments of Accession of the covenanting States and he shall by such Instrument accept as matters with respect to which the Dominion Legislature may make laws for the United State all the matters mentioned in List I and List III of the Seventh Schedule to the said Act except the entries in List I relating to any tax or duty 
There was a proviso to the Article which said that nothing in the Article shall be deemed to prevent the Rajpramukh from accepting any or all of the entries in the said List I relating to any tax or duty as matters with respect to which the Dominion Legislature may make laws for the United State
On July 14 1949 a supplementary Instrument was executed by the Rajpramukh by which he accepted on behalf of the United State all matters enumerated in List I and List III of the Seventh Schedule to the Government of India Act 1935 as matters in respect of which the Dominion Legislature might make laws for the United State subject however to the proviso that nothing contained in the said lists or in any other provision of the Government of India Act 1935 shall be deemed to empower the 758 Dominion Legislature to impose any tax or duty in the territories of the United State
The result was that in spite of the integration and accession of the United State to the Dominion of India the Cochin Act continued to be in force in the territory formerly known as Cochin and the Travancore Act in the territory known as Travancore
On November 24 1949 there was a proclamation by the Rajpramukh which stated that in the best interests of the United State of Travancore and Cochin it was desirable that the constitutional relationship established between the United State and the Dominion of India shall not only be continued but the relation as between that State and the contemplated Union of India shall be further strengthened  it was then stated that the Constitution of India as drafted by the Constituent Assembly of India which included duly appointed representatives of the United State provided a suitable basis for strengthening the relation between the two States
The proclamation then went on to say  And whereas by virtue of the power vested in it under the Covenant establishing this State the Legislative Assembly of the State has resolved that the Constitution framed by the Constituent Assembly of India be adopted by this State
I now hereby declare and direct That the Constitution of India shortly to be adopted by the Constituent Assembly of India shall be the Constitution for the United State of Travancore and Cochin as for the other parts of India and shall be enforced as such in accordance with the tenor of its provisions
That the provisions of the said Constitution shall as from the date of its commencement supersede and abrogate all other constitutional provisions inconsistent therewith which are at present in force in this State
 The Constitution of India came into force on January 26 1950 and on that date Travancore Cochin became one of the Part B States within the Constitution of India
Under that Constitution the subject of taxes on income other than agricultural income was 759 included in the Union Legislative List and Parliament alone  had exclusive power to make laws in respect thereof All laws in force in the territory of Travancore Cochin became subject to the Constitution of lndia when it came into force but article 277 of the Constitution enaccted  Any taxes duties cesses or fees which immediately before the commencement of this Constitution were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State municipality district or other local area may notwithstanding that those taxes duties cesses or fees are mentioned in the Union List continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law
The result of the aforesaid provision of the Constitution was that the taxes leviable under the Cochin Act or the Travancore Act continued to be so levied until provision to the contrary was made by Parliament by law
Such provision was made by the Finance Act 1950 XXV of 1950
Section 3 of that Act extended the Indian Income tax Act 1922 to the whole of India except the State of Jammu and Kashmir with effect from April 1 1950
The interpretation of section 13 1 of this Finance Act 1950 is one of the questions argued in these appeals and the relevant provision of that sub section must be quoted in full If immediately before the 1st day of April 1950 there is in force in any Part B State other than Jammu and Kashmir or in Manipur Tripura or Vindhya Pradesh or in the merged territor of CoochBehar any law relating to income tax or super tax or tax on profits of business that law shall cease to have effect except for the purposes of the levy assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act 1922 for the year ending on the 31st day of March 1951 or for any subsequent year or as the case may be the levy assessment and collection of 97 760 the tax on profits of business for any chargeable accounting period ending on or before the 31st day of March 1949
Provided that any reference in any such law to an officer authority tribunal or court shall be construed as a reference to the corresponding officer authority tribunal or court appointed or constituted under the said Act and if any question arises as to who such corresponding officer authority tribunal or court is the decision of the Central Government thereon shall be final 
So far we have traced the constitutional history of the integration of Travancore Cochin its accession to the Dominion of India and finally its acceptance of the Constitution of India whereby it became a Part B State within the Constitution of India
We now go back to the story of the assessments made on the assessee
The income of the assessee for the two accounting years 1122 and 1123 ME corresponding to the years ending on August 16 1947 and August 16 1948 respectively was assessed in the two assessment years 1123 and 1124 ME in accordance with the Cochin Act by the Income tax Officer at Ernakulam by his orders dated July 28 1949 and January 31 1950 respectively
These assessments the assessee alleged became final and he paid the taxes accordingly
Similarly the income of the assessee in Travancore for the accounting years 1122 and 1123 ME was assessed under the Travancore Act for the assessment years 1123 and 1124 by the Income tax Officer Kottayam by his orders dated April 11 1949 and July 30 1949 and these assessments also according to the assessee became final and he paid the taxes accordingly
The income of the assessee for the accounting year 1124 MEwas assessed under the Indian Incometax Act  1922 in the assessment year 1951 52 by the Income tax Officer Ernakulam by his order dated January 21 1952
The account books of the assessee were rejected as unreliable and the Income tax Officer Ernakulam made a  best of judgment  assessment
This assessment order is Ext
VIII in the record
The assessee appealed against it and subsequently on 761 December 14 1953 that is subsequent to the decision on the three writ petitions filed in the High Court of Travancore Cochin the Appellate Assistant Commissioner Trivandrum passed an order which has been produced before us with an application for taking it on the record
We accepted the application and both the assessment order Ext
VIII dated January 21 1952 and the appellate order dated December 14 1953 will be duly considered by us
On February 12 1952 the Income tax Officer Ernakulam issued four notices to the assessee two under section 44 of the Cochin Act and two under section 47 of the Travancore Act stating therein that in consequence of definite information which had come into his possession he had discovered that the income of the assessee assessable to income tax for the assessment years 1123 and 1124 M E had been under assessed and the Income tax Officer therefore proposed to re assess the said income the assessee was asked to submit a return in respect of his total world income for the two years in question
On March 14 1952 the Income tax Officer Kottayam issued two similar notices to the assessee under section 47 of the Travancore Act stating therein that he had discovered in consequence of definite information which had come into his possession that the income of the assessee for the two years 1123 and 1124 assessable to income tax had either escaped assessment or had been under assessed or had been assessed at too low a rate and therefore be proposed to re assess the said income
Presumably the Incometax Officer Kottayam issued the two notices because it was doubtful if the Income tax Officer Ernakulam had authority to issue notices to the assessee under the Travancore Act
Nothing however turns upon this so far as the appeals before us are concerned
On June 16 1952 the assessee filed a writ petition in the High Court of Travancore Cochin in which he challenged the jurisdiction of the Income tax Officer Ernakulam to re assess his income for the two assessment years 1123 and 1124 M E
On the very day on which the assessee filed his writ petition the Incometax Officer Ernakulam made an  escaped income  762 assessment under section 44 of the Cochin Act for the assessment year 1123
This  order was communicated to the assessee on June 171952 and the assessee filed a second writ petition in the High Court TravancoreCochin ion June 19 1952 in which he again challenged the jurisdictions of the Income tax Officer Erhakulam to make the assessment Linder section 44 of the Cochin Act and further said  that the assessment was made in spite of his application for adjournment and an order of stay passed by the High Court on June 17 1952
On June 20 1952 the assessee filed a third writ petition in the Travancore Cochin High Court in respect of the two notices issued to him by the Income tax Officer Kottayam
By this writ petition the assessee challenged the jurisdiction of the Income tax Officer Kottayam to issue the two notices in question under section 47 of the Travancore Act
These three writ petitions numbered as original petitions 53 56 and 57 of 1952 were dealt with together by the TravancoreCochin High Court and a Bench of three Judges of the said High Court held by their judgment and order dated September 14 1953 that the two Income tax Officers concerned had jurisdiction to re assess the income of the assessee for the two assessment years 1123 and 1124 M E
They accordingly dismissed the writ petitions but without costs
They however gave a certificate that the cases were fit for appeal to the Supreme Court under article 133 of  the Constitution and on that certificate the three appeals which we have called Travancore Cochin appeals have been brought to this Court from the judgment and order of the High Court of Travancore Cochin dated September 14 1953
In the High Court three main points were urged on behalf of the assessee  the first point taken was that with the passing of the Finance Act 1950 which made Travancore Cochin a  taxable territory  within the meaning of the Indian Income tax Act 1922 incometax laws of Travancore and Cochin became void and inoperative and Parliament could not under section 13 keep alive the Income tax Acts of Travancore and Cochin or any provisions thereof inconsistent with 763 the Constitution Section 13 of the Finance Act 1950was therefore invalid in so far as it tried to keep alive the Cochin Act or the Travancore Act for the purpose of levy assessment and collection of incometax for the period referred to therein
The second contention was that even if section 13 of the Finance Act 1950was valid and kept alive the provisions of the Cochin Act and the Travancore Act it did so only  for the purpose of the levy assessment and collection of income tax and super tax  in respect of the period mentioned in the section and section 131 did not have the effect of saving the provisions of the Travancore Act or Cochin Act for the purpose of  re assessment of income tax and super tax 
The third contention urged was that neither of the two Income tax Officers concerned had any definite information in consequence of which they came to any discovery that the income of the assessee for the two years in question had been under  assessed or escaped assessment or had been assesed at too low a rate
It was contended on behalf of the assessee that the statements in the notices with regard to definite information etc
were only  a pretence to clutch at jurisdiction  and the very foundation of the action sought to be taken by the Income
tax Officers under section 44 of the Cochin Act or section 47 of the Travancore Act was non existent
The learned Judges of the High Court negatived the aforesaid contentions and as we have already stated the writ petitions
Before us the first point urged on behalf of the assessee in the High Court has not been pressed
The other two points namely 1 the true construction of section 131 of the Finance Act 1950 and 2 tile absence of any foundation for the action sought to be taken under section 44 of the Cochin Act or section 47 of the Travancore Act have been pressed with great vehemence
A third point which was specifically raised in the Mysore appeals in the High Court there and which arises in the Travancore Cochin appeals also has been taken before us though it was not specifically taken in the High Court of Travancore Cochin
We have allowed learned counsel for the assessee to raise the point as 764 it involves a pure question of law
The point is this
In the wake of accession and political integration of the States and Unions of States with India arose the problem of federal financial integration
The States and Unions of States so long as they continued as separate units had retained their own pre existing public finance structures
They had one common feature distinguishing them from the Provinces of India in that except in respect of certain matters covered by the Standstill Agreements the States were free to follow their own policies in matters of federal finance and taxation that is to say in the field of public finance such as customs income tax central excise railways posts and telegraphs etc
When the question of integration of these States with India arose naturally the question of extinguishing the special rights and obligations of the States in the field of federal finance and of making good to them the net gap in their revenues also arose
By a resolution dated October 22 1948 the Government of India appointed a committee of experts referred to as the Indian States Finances Enquiry Committee to consider the problem of federal finance
The Committee s terms of reference were inter alia as follows  To examine and report upon 1the present structure of Public Finance in Indian States and Unions of States 2the desirability and feasibility of integrating Finance in Indian States and Unions of States with that of the rest of India to the end that a uniform system of Federal Finance may be established throughout the Dominion of India 3whether and if so the extent to which the process of integrating Federal Finance in the Indian States and Unions with that of the rest of India should be gradual and the manner in which it should be brought about and the machinery required for his purpose especially as regards the legislative groundwork and the administrative Organisation necessary for the imposition assessment and collection of federal taxes 
The Committee submitted a report in due course and 765 made certain recommendations
On the basis of those recommendations certain agreements were entered into between the President of India and the Rajpramukhs including the Rajpramukh of Travancore Cochin and the Rajpramukh of Mysore
We shall refer in somewhat greater detail to these agreements particularly the agreements entered into by the Rajpramukhs of Travancore Cochin and Mysore
The contention on behalf of the assessee is that these agreements with Part B States with regard to certain financial matters received constitutional sanctity in article 278 of the Constitution now repealed by the Constitution Seventh Amendment Act 1956
Article 278 so far as it is relevant for our purpose was in these terms  278 1
Notwithstanding anything in the Constitution the Government of India may subject to the provisions of clause 2 enter into an agreement with the Government of a State specified in Part B of the First Schedule with respect to athe levy and collection of any tax or duty leviable by the Government of India in such State and for the distribution of the proceeds thereof otherwise than in accordance with the provisions of this Chapter  b  c  and when an agreement is so entered into the provisions of this Chapter shall in relation to such State have effect subject to the terms of such agreement
 The argument on behalf of the assessee is that the recommendations of the Indian States Finances Enquiry Committee which were accepted by the Rajpramukh of Travancore Cochin in the agreement entered into by the Rajpramukh with the President of India on February 25 1950 were designed to secure  legal continuity of pending proceedings  and  finality and validity of completed proceedings  under the preexisting State legislation  therefore section 131 of the Finance Act 1950 should be so construed as to be in consonance with the aforesaid agreement and in the alternative if section 131 is construed to be at variance with the aforesaid financial agreement it should be 766 held to be void by reason of the provisions of articles 278 and 295 of the Constitution
We proceed now to a consideration in detail of the arguments urged before us on behalf of the assessee in the Travancore Cochin appeals
In logical sequence the point as to the absence of foundation for the action taken by the two Income tax Officers of Ernakulam and Kottayam in the matter of the issue of notices
for reassessment comes first and we propose now to deal with it
It is necessary at this stage to set out the two sections under which the Income tax Officers proposed to take action against the assessee
The two sections are section 44 of the Cochin Act and section 47 of the Travancore Act
Section 44 of the Cochin Act so far as it is relevant for our purpose is in these terms  441 If in consequence of definite information which has come into his possession the Income tax Officer discovers that income  profits or gains chargeable to income tax have escaped assessment in any year or have been under assessed or have been assessed at too low a rate or have been the subject of excessive relief under this Act the Income tax Officer way in any case in which he has reason to believed that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars thereof at any time within eight years and in any other case at any time within four years of the end of that year serve on the person liable to pay tax on such income profits or gains or in the case of a company on the principal officer thereof a notice containing all or any of the requirement which may be included in a notice under sub section 2 of section 27 and may proceed to assess or re assess such income profits or gains and the provisions of this Act shall so far as may be apply accordinglyas if the notice were a notice issued under that sub section
 Section 47 1 of the Travancore Act is identical ill terms and need not therefore be quoted
It is worthy of note that the terms of the
aforesaid two sections are similar to section 34 of the Indian Income tax Act 1922 as itstood after the amending Act of 1939 and before the amendments of 1948
The two requisites conditions 767 for the application of the section are contained in the first part and they are firstly there must be definite information which has come into possession of the Income tax Officer and secondly in consequence of that information the Income fax Officer discovers that income profits or gains chargeable to income tax have escaped assessment in any year etc
It is only when these two conditions are fulfilled that the Income tax Officer can take necessary action under section 44
The question before us is whether these two conditions were fulfilled in the cases out of which the TravancoreCochin appeals have arisen
As in the High Court so also before us the only document on which the Income tax Officers relied for this part of their case is Ext
This document according to the Income tax Officers furnished the definite information in consequence of which they made the necessary discovery
Learned counsel for the assessee has taken us through Ext
VIII Ext
A statement of the case submitted by the assessee to the Appellate Assistant Commissioner and the order of the Appellate Commissioner dated December 14 1953 and he has contended that 1 Ext
VIII does not relate to the years in question and cannot therefore constitute definite information for those years 2 it gives certain highly speculative grounds for discrediting the account books of the assessee which grounds have not been accepted by the Appellate Assistant Commissioner and 3 in any view it contained no information on which the Income tax Officers could be said to have made any discovery
As to 1 above the High Court rightly pointed out that Ext
VIII contained information of a kind which disclosed a definite and systematic pattern of transactions for avoidance of tax not only in respect of the year covered by the order but spread over years anterior to it
Secondly Ext
VIII disclosed according to the Income tax Officers concerned a systematic suppression of cash Bales a regular trade in purchase and sale of controlled commodities at profiteering rates passing bogus bills for purchases understating stocks segregating stocks 98 768 for clandestine sales and selling goods to the branches at artificial book losses
There can be no doubt that all this information if honestly believed would reasonably support the opinion of the Income tax Officers that there is a discovery of  escaped  income etc within the meaning of section 44 of the Cochin Act and section 47 of the Travancore Act
But learned counsel for the assessee argues that while it may be right to say that Ext
VIII prima facie contains the kind of information which will satisfy the conditions of section 44 of the Cochin Act and section 47 of the Travancore Act we must take note of the fact that according to the Appellate Assistant Commissioner as shown by his order dated December 14 1953 the so called information contained in Ext
VIII was really non existent and the information being non existent there was no foundation for the action taken by the Income tax Officers
We are unable to accept this argument as correct
Apart from the consideration that the order of the Appellate Assistant Commissioner was not available when the Income tax Officers issued their notices we think that the argument overstates the effect of the order of the Appellate Assistant Commissioner
It is true that the Appellate Assistant Commissioner considered in detail the various criticisms of the Income tax Officer with regard to the account books along with the explanations offered on behalf of the assessee but he expressed his final conclusion in the following words  I have given my careful consideration to the various adverse criticisms of the Income tax Officer and to the Advocate s answers thereto
I have also looked into the accounts and other revelant papers
As a result I am satisfied that the Income tax Officer s criticisms are in most cases not at all well founded and that the Advocate has successfully met almost every point raised by the former
In fact the Income tax Officer himself admitted at the time of the hearing that has order was shown to be quite vulnerable
But he contended that it would not be enough if the Advocate merely answered the specific criticisms in the order and that the case should be looked at as a whole and a decision should be arrived at as to whether on such 769 a comprehensive view the appellant s accounts could be regarded as completely faultless and worthy of unquestioned acceptance
Seen from this broad angle it cannot of course be said that the accounts are free from defects
There is firstly no stock book for uncontrolled goods and the accuracy of the inventories of opening and closing stocks of such goods is therefore open to doubt
Again whatever may be the appellant s reasons for not recording full details for cash sales there is the admitted fact that the cash sales stand partly unvouched and details as to the names and addresses of purchasers are not available for the major part of the year and there is therefore no possibility of satisfying one self whether all the cash sales have been duly brought to account
There is also the further fact that at least some of the purchases are not satisfactorily vouched and that the rates of gross profit disclosed by the accounts both at the head office and the branches are not quite adequate
These in my opinion are sufficient grounds for discrediting the book results and resorting to an estimate of the turnover as well as the gross profit
 It cannot therefore be Raid that the order of the Appellate Assistant Commissioner washed out the entire information contained in Ext
VIII so as to strike at the very root of the jurisdiction of the Income tax Officers concerned to issue the notices in question
It is to be remembered that there is a distinction between receipt of definite information as a consequence of which a discovery is made and a notice is issued and the final determination as to the liability or extent of liability for escaped assessment etc
We accept as correct the view expressed in Firm Jitanram Nirmalram vs Commissioner of Income tax 1 that the phrase  definite information  cannot be construed in a universal sense and its meaning must depend on and vary with the circumstances of each case
There is no doubt however that the information must be definite that is more than mere guess gossip or rumour
There must also be a causal connexion between the information and the discovery but  discovery  in 1 AIR 1952 Pat
770 the context of the section does not mean a conclusion of certainty at the stage of notice
What is necessary at that stage is that the Income tax Officer should have formed an honest belief upon materials which reasonably support such belief
This in our opinion is the correct view and judged from that standpoint Ext
VIII fulfilled the requirements of section 44 of the Cochin Act and section 47 of the Travancore Act
We now turn to the construction of section 13 1 of the Finance Act 1950
The argument on this point has meandered over a wide area but it is really dependent on the meaning to be given to the expression for the purposes Of the levy assessment and collection of income tax and super tax  occurring in the section
Does the word assessment  include re assessment   The contention of the assessee is that it does not
The Travancore Cochin High Court did not accept this contention but the Mysore High Court did in favour of the respondents in the Mysore appeals
The general scheme of the Cochin Act and the Travancore Act is the same as that of the Indian Income tax Act 1922 and for a clear understanding of the meaning of the expression levy assessment and collection of income tax  it is best to explain the general scheme of these Income tax Acts with reference to the Indian Income tax Act 1922 which served more or less as their model
Section 3 is the charging section which imposes liability in respect of  the total income of the previous year of every individual etc and total income  means the total amount of income profits and gains computed in the manner laid down in the Act 
It is clear that so far as the charging section is concerned the liability does not cease unless the total income profits and gains have been computed in the manner laid down in the Act
Section 4 states inter alia that subject to the provisions of the Act the total income of any previous year of any person includes all income profits and gains from whatever source derived
Leaving out the sections which deal with Income tax authorities we come to the sections in Chapter 111 which explain what is 771 taxable income under different heads
Chapter IV deals with deductions and assessment and the words assessment  and Ire assessment  occur in several sections of this Chapter
Under section 222 the Incometax Officer must serve notice on any person whose total income is in the Income tax Officer s opinion of such an amount as to render such person liable to income tax requiring him to furnish a return in the prescribed form of his total income during the previous year
Sub section 4 authorises the Income tax Officer to serve on any person upon whom a notice has been served under sub section
2 a further notice requiring him to produce accounts and documents subject to the limitation that he shall not require the production of any accounts relating to a period more than three years prior to the year previous to the year of assessment
Section 23 provides for the making of the assessment
Sub section 1 requires the Income tax Officer if he is satisfied that the return made under section 22 is correct and complete to assess the total income and to determine the sum payable
Under sub section
2 if the Income tax Officer has reason to believe that the return is incorrect or incomplete he must serve on the person who made the return a notice requiring him either to attend at the Income tax Officer s office or to produce any evidence relied on in support of the return
Sub section 3 provides that the Income tax Officer after hearing such evidence as the person who made the return may produce and such other evidence as the Income tax Officer may require on specified points shall by an order in writing assess the total income and determine the sum payable
Subsection 4 makes provision for an assessment by the Incometax Officer to the best of his judgment if the assessee fails to make a return or to comply with the terms of the notices issued to him
This whole procedure it may be recalled not only applies on first assessment but is also prescribed by section 34 if for any reason income profits or gains have escaped assessment or have been assessed at too low a rate
Section 27 deals with cancellation of assessment in certain circumstances and states  the Income tax Officer shall cancel the 772 assessment and proceed to make a fresh assessment in accordance with the provisions of section 23 
Section 29 talks of a notice of demand to the person liable to pay the tax etc
 the notice specifying the sum so payable
Section 30 gives a right of appeal from certain orders
Section 31 deals with
hearing of appeals and states inter alia that the appellate authority may set aside the assessment and direct the Income tax Officer to make
a fresh assessment
Section 33 provides for appeals against the orders of the Appellate Assistant Commissioner and sections 33A and 33B give powers of revision to the Commissioner
In appropriate cases the Commissioner can cancel the assessment and direct a fresh assessment
Then comes section 34 which corresponds to section 44 of the Cochin Act and section 47 of the Travancore Act
In substance it deals with income which has escaped assessment for one reason or another and says in the operative part that the Income tax Officer  may proceed to assess or re assess such income profits or gains etc
 There has been some argument before us as to the meaning of the juxtaposition of the words  assess or re assess  occurring in the section and it has been contended that a distinction has obviously been drawn between income which has totally escaped assessment and income which has been under assessed or assessed at too low a rate etc and the word assess  appropriately applies to the former case and the word  re assess  to the latter case
Two other sections which are relevant for our purpose are sections 66 and 67
Section 66 7 says that notwithstanding that a reference has been made under this section to the High Court income tax shall be payable in accordance with the assessment made in the case
The word assessment  here undoubtedly includes re assessment 
Section 67 which bars civil suits says that no suit shall be brought in any civil court to set aside or modify any assessment made under the Act
Here again assessment  must include re assessment  for it cannot have been the intention that a civil suit shall lie in respect of a reassessment under section 34 but not in respect of an assessment
This brief resume of the relevant provisons of the 773 Income tax Act clearly establishes that the word assessment  has to be understood in each section with reference to the context in which it has been used
In some sections it has a comprehensive meaning and in some a somewhat restricted meaning to be distinguished from a re assessment  or even a fresh assessment 
Now the question is in what sense has the word assessment  been used in section 131 of the Finance Act 1950
Two circumstances may be noticed at once
The long title says that the Finance Act 1950 is an Act to give effect to the financial proposals of the Central Government for the year beginning on April 1 1950 and in section 131 the collocation of words is  levy assessment and collection of income tax
In our opinion both these circumstances point towards a comprehensive meaning for it could not have been intended as part of the proposal of the Central Government that those whose income had totally escaped assessment should be liable but those who had been under assessed should go soot free
We can see nothing in the words of the section which would justify such a distinction we say this quite apart from the argument that section 131 should be interpreted in consonance with the financial agreement entered into between the Rajpramukh and the President an argument to which we shall presently advert
Moreover the collocation of the words levy assessment and collection  indicates that what is meant is the entire process by which the tax is ascertained demanded and realised
On behalf of the assessee it has been contended that 1 the Income tax Act makes a distinction between a normal or original assessment under section 23 a fresh assessment under section 27 and a re assessment or second assessment under section 34 and 2 inasmuch as section 13 1 uses the word I assessment only it must be taken to have been used in a restricted sense
In support of these contentions great reliance has been placed on the decision of the Privy Council in Commissioner of Income tax Bombay Presidency and Aden vs Khemchand Ramdas 1
The Mysore High Court also referred 11938 LR 65 IA 236 248
774 to this decision in support of its view on the construction of section 13 1
We are unable to accept these contentions as correct nor do we think that the decision cited supports the view expressed by the Mysore High Court
The facts in Khemchands case 1 were briefly these
The firm of Khemchand applied to the Incometax Officer to have the firm registered the consequence of such registration being that the profits of the firm would not be assessable to super tax
On January 17 1927 the Income tax Officer assessed the firm to income tax for the year 1926 27 under section 23 sub section
4 of the Act but no super tax was imposed as the firm having applied for registration was registered
Notice of demand for the amount assessed was made in 1927
Subsequently the Commissioner ordered the cancellation of registration and directed the Income tax Officer to take necessary action thereupon
On May 4 1929 the Income tax Officer imposed super tax and issued a notice of demand in May 1929
The question in the appeal was whether the Income tax authorities had any jurisdiction to assess Khemchand s firm to super tax for the year 1926 27
Their Lordships pointed out that the powers of the Commissioner tinder section 33 could only be exercised subject to the provisions of the Act of which the provisions in sections 34 and 35 were important
They held that it was debatable whether the circumstances of the case were such as to bring it within section 34 and so far as section 35 was concerned the Income tax Officer was hopelessly barred by time
In that context their Lordships said  It is possible that the final assessment may not be made until some years after the close of the fiscal year
Questions of difficulty may arise and cause considerable delay
Proceedings may be taken by way of appeal and cause further delay
Until all such questions are determined and all such proceedings have come to an end there can be no final assessment
But when once a final assessment is arrived at it cannot in their Lordships  opinion be reopened except in the circumstances detailed in sections 34 and 35 of the Act to which reference is made hereafter and within the time 11938 L R 65 I A 236 775 limited by those sections
In the present case the liability of the respondents both for income tax and for super tax wag determined by the Income tax Officer on January 17 1927
In the order made by him on that date he assessed the respondents to income tax at the maximum rate but as the respondents were at that time a registered firm he held as he was bound to hold that no super tax was to be levied
On some date before the end of March 1927 he served on the respondents a notice of demand for the tax that he had determined was properly leviable
The assess ment having been made under section 23 sub section
4 no appeal lay in respect of it
The assessment of the respondents was therefore final both in respect of income tax and super tax
Their liability in respect of both taxes had been finally determined and none the less because the question of their liability to supertax had been determined in their favour
It was indeed contended before their Lordships that the assessment could not be regarded as having been determined inasmuch as the Commissioner might at any time and apparently after any lapse of time however long cancel the registration of the respondents as a registered firm and so subject the respondents to liability to pay super tax
Their Lordships would in any case hesitate long before acceding to a contention that would lead to so extravagant results
In their opinion however the contention cannot prevail
The Commissioner s powers under section 33 can only be exercised subject to the provisions of the Act of which the provisions in sections 34 and 35 are in this respect of the greatest importance
 These observations lend no support to the view that the word assessment must always bear a particular meaning in the Income tax Act
On the contrary at p 247 of the report their Lordships said  These two questions are so closely related to one another that they can conveniently be considered together
In order to answer them it is essential to bear in mind the method prescribed by the Act for making an assessment to tax using the word assessment 99 776 in its comprehensive sense as including the whole procedure for imposing liability upon the tax payer
The method consists of the following steps
In the first place the taxable income of the tax payer has to be computed
In the next place the sum payable by him
on the basis of such computation has to be determined
Finally a notice of demand in the prescribed form specifying the sum so payable has to be served upon the tax payer
 If the word  assessment  is taken in its comprehensive sense as we think it should be taken in the context of section 131 of the Finance Act 1950 it would include I re assessment  made under the provisions of the Act
Such re assessment  will without doubt come within the expression levy assessment and collection of income tax 
In his speech in Commissioners For General Purposes of Income Tax For City of London vs Gibbs and Others 1 Lord Simon has pointed out that the word assessment  is used in the English Incometax Code in more than one sense and sometimes within the bounds of the same section two separate meanings of the word may be found
One meaning is the fixing of the sum taken to represent the actual profit and the other the actual sum in tax which the taxpayer is liable to pay
It has been contended before us that the Finance Act and the Income tax Act should be read together as forming one Code and so read the words I assessment  and I re assessment acquire definite and distinct connotations
We are unable to agree for the reasons which we have already given that even if we read the Finance Act along with the Income tax Act the word  assessment  can be given a restricted meaning
To repeat those reasons the income tax code itself uses the word assessment in different senses and in the context and collocation of the words of the Finance Act the word assessment  is capable of bearing a comprehensive meaning only
We can find no good
reasons for holding that in the matter of levy assessment and collection of income tax the Finance Act 1950 contemplated that some persons should enjoy a 11942 AC 402 406 777 privilege and escape payment of the full tax leviable under the provisions of the relevant Act
On this point we approve of the decision in Firm L Hazari Mal vs Income tax Officer Ambala 1 where Bhandari C J said These three expressions levy  assessment  and collection  are of the widest significance and embrace in their broad sweep all the proceedings for raising money by the exercise of the power of taxation 
This brings us to the third question
Is there any thing in the financial agreement of February 25 1950 and the recommendations of the Indian States Finances Enquiry Committee which would restrict the meaning of the expression levy assessment and collection of income tax  Or in the alternative bring section 131 of the Finance Act 1950 into conflict with articles 278 and 295 of the Constitution The relevant portion of the agreement between the President of India and the Rajpramukh of TravancoreCochin dated February 25 1950 states  Now therefore the President of India and the Rajpramukh of Travancore Cochin have entered into the following agreement namely  The recommendations of the Indian States Finances Enquiry Commitee 1948 49 hereinafter referred to as the Committee contained in Part I of its report read with Chapters 1 11 and III of Part 11 of its Report in so far as they apply to Travancore Cochin hereinafter referred to as the State together with the recommendations contained in the Comittee s Second Interim Report are accepted by the Parties hereto subject to the following modifications
 The modifications which follow have no bearing on the question at issue and need not be set out
Now let us examine the relevant recommendations of the Committee which are accepted by the Parties and form part of the agreement
These recommendations are summarised in para
9 of the annexure to Part I of the Committee s report and are set out below Our suggestions concerning certain legal and 778 other matters of general importance affecting most federal subjects including taxes on income which will arise in connection with federal financial integration in all States have been set out in paragraph 11 of Chapter 11 in Part 11 of our Report
Those relating to legal matters are however re produced below for convenient reference  5 Apart from the constitutional requirement in connection with the integration of federal finances in States vide paragraphs 37 and 40 Part I of our Report certain important issues of a legal nature will arise in connection with the actual taking over of  federal  subjects in the States by the Centre
This is a difficult subject upon which we are not qualified to offer competent advice
We have endeavoured however to indicate below the main features of what we conceive will be required in order to establish  continuity of proceedings  in regard to all  federal  subjects whether relating to revenues expenditure or Service Departments at the point of their transition from the States to the Centre aAlmost every  federal  subject is dealt with in the State as in the rest of India under powers conferred by appropriate legislation consisting of relevant Codes Acts Ordinances and Statutory Rules and Regulations
Subject to the limitations indicated below which are designed to secure legal  continuity  of pending proceedings and  finality and validity  of completed proceedings under the pre existing State legislation  we think the whole body of State legislation relating to  federal  subjects should be repealed and the corresponding body of Central legislation extended proprio vigore to the States with effect from the prescribed date or as and when the administration of particular  federal  subject is assumed by the Centre
bFor the above purpose as well as for future federal administration in States it may be necessary specifically to extend not merely the legislative but also the executive and administrative competence of the Centre its officers and  authorities  and the judicial authority of its Courts to the territories of the States
779 cSuch State Courts except Courts of final appeal from orders of the State High Courts as may in fact correspond to particular grades and classes of British Indian Courts Civil and Criminal may have to be statutorily  recognised  as  corresponding judicial authorities  for purpose of dealing with cases arising in the States under the  federal  laws of the Union of India and the Supreme Court in India will have to be made the Court of final appeal from decisions of the State High Courts to the same extent as in the case of Provincial High Courts
d Those sections of the various Indian Acts and Ordinances which set out their territorial  extent of application  will require amending so as to include State territories with effect from the prescribed date
eIt will be necessary to provide that all matters and proceedings pending under or arising out of the preexisting State Acts shall be disposed of under those Acts by so far as may be the  corresPonding authorities  nominated by the Chief Executive Authority under the corresponding Indian Acts
 In view of the fact that the members of the Committee themselves felt that the legal issues involved in the actual taking over of  federal  subjects in the States by the Centre constituted a difficult subject on which they were not qualified to offer competent advice and their further statement that they were merely endeavouring to indicate the main features of what they considered to be required in order to establish  continuity of proceedings  it has been argued before us on behalf of the Income tax authorities that it would be wrong to treat the recomendations as binding statutory rules even though the financial agreement between the high contracting Parties states generally that the recommendations are accepted it is contended that the Committee in express terms states that the recommendations merely endeavour to indicate the main features of what the Committee thought was required and they should not be placed on a pedestal higher than what the Committee itself did
We think that there is much force in this contention but in the view which we have taken of these 780 recommendations we do not think that it is necessary to decide finally what constitutional sanctity they have acquired by reason of their acceptance in the financial agreement and the provisions of article 278 of the Constitution
Assuming but without deciding that they have binding force what is their true meaning and effect The argument on behalf of the assessee is that cl
a of the recommendations is the operative clause and inasmuch as it talks of  continuity of pending proceedings  and  finality and validity of completed proceedings  tinder the pre existing State legislation the true effect is that all assessment proceedings which have become complete and finance I by the issue of a demand notice under section 29 of the Indian Income tax Act or corresponding section of the Cochin Act or Travancore Act are saved under the clause and cannot be reopened and only proceedings actually pending on the relevant date can be continued thereunder
We are unable to accept this as the true meaning and effect of clause a
What is worthy of special notice is that cl
a specifically says that the clauses which follow it are the limitations or qualifications subject to which the whole body of State legislation is to be repealed and they are designed to secure two objects continuity of pending proceedings and finality and validity of completed proceedings therefore cl
a is not the operative clause and it merely indicates the reasons or objects for which certain limitations or qualifications are suggested on the proposal to repeal the State legislation
Clause a is followed by cls
b c d and e
Clause b which deals with executive and administrative competence of Incometax Officers and judicial authority of Courts need not detain us
So also cls
c and d which have little bearing on the problem before us
Clause e is important and it states that  all matters and proceedings pending under or arising out of the pre existing State Acts shall be disposed of under those Acts etc
 That a proceeding for re assessment under section 44 Cochin Act or section 47 Travancore Act is a proceeding arising out of the pre existing State Acts admits of no doubt and is clearly covered by cl
We see no good grounds 781 why full effect should not be given to it it is one of the limitations as stated in cl
a subject to which the State law is to be repealed
The matter is made still more clear by what is stated in the paragraph that immediately follows viz paragraph 10 of the annexure to the report of the Committee
That paragraph states  The recommendation made in the last two subparagraphs quoted above should be understood as requiring that all income profits and gains accruing or arising in States of all periods which are  previous years  of the States  assessment years 1949 50 or earlier should subject to the provisions of section 142c of the Indian Income tax Act be assessed wholly in accordance with the States  laws and at the States  rates respectively appropriate to the assessment years concerned etc really no doubt left in the matter
The Committee did not restrict the limitations they were suggesting to a proceeding which was actually pending on the date of repeal of the State law it gave a wider meaning to pending proceedings that is proceedings pending under and arising out of the preexisting State Acts
It is to be remembered that where an assessment starts with a notice under section 34 of the Indian Income tax Act or corresponding section of the Cochin or Travancore Act all the relevant provisions of that Act apply as effectively as where the assessment starts with a notice under section 22 2 or corresponding section of the Cochin or Travancore Act in the ordinary course
It is also not disputed that the assessment made under section 34 in any year subsequent to the relevant assessment year must be made as if it were made in the relevant assessment year and the assessment must be based on the provisions of the Act as it stood in the year in which the income ought to have been assessed
Having regard to these considerations we find no difficulty in holding that a re assessment proceeding under section 44 Cochin Act or section 47 Travancore Act is a proceeding which comes under cl
e of the recommendations of the 782 Committee and must be disposed of under the preexisting State law
Section 13 1 of the Finance Act 1950 gives effect to that recommendation
There is therefore nothing in the recommendations which would restrict the meaning of the expression  levy assessment and collection of income tax  in section 13 1 of the Finance Act nor do they bring section 13 1 into conflict with articles 278 and 295 of the Constitution
We accordingly hold that there is no substance in any of the three points urged on behalf of the assessee in the Travancore Cochin appeals
Mysore Appeals
These are eight appeals and the relevant facts are these
Civil Appeals 27 to 30 of 1956 arise out of four writ petitions numbered 52 and 53 of 1953 and 105 and 106 of 1954 which were dealt with together in the Mysore High Court by a common judgment dated December 14 1954
Civil Appeals 161 to 164 also arise out of four writ petitions No 122 of 1954 and nos
35 to 37 of 1955 filed in the same High Court
The orders passed in those writ petitions were that they were governed by the aforesaid decision dated December 14 1954
ln the result all the writ petitions were allowed with costs
In all these cases the petitioners who are respondents before us were assessed to income tax under the Mysore Income tax Act 1923 hereinafter called the Mysore Act for different years previous to the integration of Mysore with India and the assessment proceedings were completed and closed under the Mysore Act by demand notices issued by the Income tax Officers concerned
But subsequent to the integration of Mysore notices under section 34 of the Mysore Act were issued against the petitioners and they challenged the jurisdiction of the Income tax Officers to issue such notices
Section 34 of the Mysore Act states  If for any reason income profits or gains chargeable to income tax has escaped assessment in any year or has been assessed at too low a rate the Income tax Officer may at any time within four years of the end of that year serve on the person liable to 783 pay tax on such income profits or gains or in the case of a company on the principal officer thereof a notice I containing all or any of the requirements which may be included in a notice under sub section 2 of section 22 and may proceed to assess or re assess such income profits or gains and provisions of this Act shall so far as may be apply accordingly as if the notice were a notice issued under that sub section Provided that the tax shall be charged at the rate at which it would have been charged had the income profits or gains not escaped assessment or full assessment as the case may be
 It corresponds to section 34 of the Indian Income tax Act as it stood prior to the amending Act of 1939 and the general scheme of the Mysore Act was the same as that of the Indian Income tax Act 1922 as it stood before 1939
The two grounds on which the jurisdiction of the Income tax Officers was challenged were 1 Under the Finance Act 1950 the Mysore Act stood repealed on and from April 1 1950 and section 13 1 of the Finance Act kept alive the Mysore Act for the purpose of levy assessment and collection of incometax etc
for the period mentioned therein but did not save section 34 of the Mysore Act for the purpose of reassessment of income tax therefore the notices issued under section 34 of the Mysore Act were without jurisdiction and authority
2 Even otherwise the financial agreement between the President of India and the Rajpramukh of Mysore on February 28 1950 which received constitutional sanctity in article 278 of the Constitution rendered the initiation of such re assessment proceedings against the respondents unconstitutional and void
The learned Chief Justice of the Mysore High Court upheld ground No 1 and considered it unnecessary to pronounce on the second ground
Mallapa J in a separate but concurring judgment expressed the view that having regard to the wording of section 13 1 of Finance Act 1950 and the financial agreement of February 28 1950 he had no doubt that section 13 1 did 100 784 not provide for re assessment under section 34 of the Mysore Act
The process of integration of Mysore with India was similar to
that of Travancore Cochin
The State of Mysore acceded to the Dominion of India by an Instrument of Accession executed on August 9 1947 and accepted by the Governor General on August 16 1947
A supplementary Instrument of Accession was executed on June 1 1949
By a Proclamation dated November 25 1949 the Constitution of India to be adopted by the Constituent Assembly of India was accepted for Mysore and on January 261950 Mysore became a Part B State within the Constitution of India
A similar financial agreement was entered into by the Rajpramukh with the President of India on February 28 1950
On April 1 1950 the Finance Act 1950 applied the Indian Income tax Act 1922 to Mysore subject to the provisions of section 13 thereof
In dealing with the Travancore Cochin appeals we have fully dealt with the two grounds on which the respondent assessees in the Mysore appeals challenged the jurisdiction of the Income tax Officers concerned to issue the notices under
section 34 of The Mysore Act
Two additional points urged in support of ground No 1 maybe stated here
It has been urged that the proviso to section 34 of the Mysore Act brings out the distinction between I assessment  and  re assessment  and secondly it is contended that the jurisdiction under section 34 is limited to ascertainment of extra income not assessed and the section does not confer jurisdiction to make a new assessment for taxing whole of that assessment under the Act
Learned counsel for the assessees has invited our attention to In re Kashi Nath Bagla 1 Madhavjee Damodar Thackersay and Another vs Commissioner of Income Tax BOMBAY2 and Anglo French Textile Co Ltd vs Commissioner of Income Tax Madras No 4 3
The real question for decision in these appeals is the true scope and effect of section 13 1 of the Finance Act and on that question the additional points  mentioned 1 A 1
R 1932 All
2 3 1950 18 785 above throw very little light
There is indeed a dis tinction between an original or normal assessment under section 23 and a re assessment under section 34 but we  have shown that the word  assessment  has been used in more than one sense in Income tax law and so far as section 13 1 of the Finance Act 1950 is concerned there is no doubt that the expression I levy assessment and collection of income tax  has been used in a comprehensive sense so as to include the whole procedure for imposing liability upon the taxpayer
Result  The final result therefore is a the TravancoreCochin appeals Civil Appeals 143 to 145 of 1954 are dismissed with costs and b the Mysore appeals Civil Appeals 27 to 30 of 1956 and Civil Appeals 161 to 164 of 1956 are allowed and the judgment and orders of the Mysore High Court are set aside
The appellants in these Mysore appeals will be entitled to their costs in this Court and the High Court of Mysore
Appeals Nos 143 to 145 dismissed
Appeals No 27 to 30 and 161 to 164 allowed


Summary:
The respondent joined service as technical assistant with the Gujarat State Electricity Board and was later promoted to the post of Deputy Engineer
While he was posted at Surat he was transferred to Ukai Sub division under the order of the Superintending Engineer dated 29th March 1974 and he was relieved from his duties at Surat on 30th March 1974
He made representation to the Addl
Chief Engineer for cancelling his transfer order which was rejected and he was directed to join at Ukai but he did not do so and continued to be absent without sanction of any leave and instead he filed a civil suit challenging validity of the order of transfer
The Superintending Engineer by his letter dated 18th April 1974 directed the respondent to show cause as to why action should not be taken against him for disobeying the order of transfer and also for unauthorised absence from duty in breach of service Regulation No 113
The respondent failed to join his duty even after a warning
Thereafter the Superintending Engineer sent a letter dated 24th April 1974 by registered cover which contained a warning but the same was returned back by the postal authorities with an endorse ment that the addressee refused to accept the same
Meanwhile the Chief Engineer by his order dated 27th May 358 1974 discharged the respondent from service in accordance with service Regulation No 113 as he had continued to remain absent from duty since 30th March 1974
The respondent filed a writ petition before the High Court challenging the validity of the order of his discharge from service
A learned Single Judge of the High Court quashed the order of discharge but looking to the attitude of the respondent and continued conduct of disobedience of the orders of his superior he was not granted consequential reliefs
The respondent as well as the appellant Board preferred Letter Patent Appeals
A Division Bench of the High Court dismissed the appeal of the appellant Board and allowed the respondent s appeal upholding the order of discharge as illegal and void and directed the appellants to reinstate the respondent to treat him in service and to grant him benefits of incre ments seniority and promotion
The Division Bench howev er did not grant full back wages but directed the Board to pay the respondent 50 per cent of back wages
Against the order of the Division Bench of the High Court the appellants preferred an appeal to this Court by special leave
The appeal came up for hearing and advocates for both the parties were fully heard
Being satisfied that the Single Judge as well as Division Bench of the High Court committed error in allowing the writ petition of the re spondent this Court suggested to the counsel for the re spondent that if he agreed the original writ petition of the respondent could be dismissed without directing him to refund the amount which he had already been paid by the appellants in pursuance to the orders of the High Court and of this Court
The bearing was adjourned to enable counsel to obtain instructions from the respondent
On the next hearing another counsel appeared on behalf of the respondent to argue on merits
The Court refused to hear fresh argu ments as the hearing had already been completed
Thereupon the respondent appeared in person to make his submissions which the Court refused as oral
hearing has already been completed
However in the interest of justice the respond ent was permitted to file written submissions
No written submissions were filed instead the respondent adopted an unusual course by sending an application by post expressing his no confidence in the Bench of this Court with a prayer to transfer the case to some other Bench
The Court ignored the request of the respondent as it was unusual uncalled for and unjustified
359 Allowing the appeal by special leave this Court HELD No party is entitled to get a case transferred from one Bench to the other unless the Bench is biased or there are some reasonable grounds for the same
but no right to get a case transferred to any other Bench can legiti mately be claimed merely because the Judges express opinion on the merits of the case on the conclusion of hearing
362E Transfer of a Government servant appointed to a particu lar cadre of transferable posts from one place to other is an incident of service
No Government servant or employee of public undertaking has legal right for being posted at any particular place
Transfer from one place to other is gener ally a condition of service and the employee has no choice in the matter
Transfer from one place to other is necessary in public interest and efficiency in the Public Administra tion
362H 363A Whenever a public servant is transferred he must comply with the order but if there be any genuine difficulty in proceeding on transfer it is open to him to make representa tion to the competent authority for stay modification or cancellation of the transfer order
If the order of transfer is not stayed modified or cancelled the concerned public servant must carry out the order of transfer
363B If he fails to proceed on transfer in compliance to the transfer order he would expose himself to disciplinary action under the relevant Rules as has happened in the instant case
The respondent lost his service as he refused to comply with the order of his transfer from one place to the other
363C No Government servant or employee of any public under taking has a right to be absent from duty without sanction of leave merely on account of pendency of representation against the order of transfer
366B There is presumption of service of a letter sent under registered cover if the same is returned back with a postal endorsement that the addressee refused to accept the same
No doubt the presumption is rebuttable and it is open to the party concerned to place evidence before the Court to rebut the presumption by showing that the address mentioned on the cover was incorrect or that the postal authorities never tendered the registered letter to him or that there was no occasion for him to refuse the same
The burden to rebut the presumption lies on 360 the party challenging the factum of service
368B C In the instant case the respondent s failure to join his duties at Ukai resulted in unauthorised absence and his failure to join his duties in spite of repeated reminders and letters issued to him constituted sufficient valid ground for taking action under Regulation No 113
Before issuing the order of discharge the respondent was not only warned but he was also afforded an opportunity to explain as to why disciplinary action should not be taken against him
The respondent acted in an irresponsible manner in
not complying with the order of transfer which led to his dis charge from service in accordance with the Service Regula tion No 113
The Single Judge as well as the Division Bench both therefore erred
in law in setting aside the order of discharge
368E G