315 of 1954
Petition under article 32 of the Constitution for enforcement of Fundamental Rights
HJ Umrigar Narain Andley J B Dadachanji and Rajinder Narain for the petitioner
M C Setalvad Attorney General for India and C K Daphtary Solicitor General for India G N Joshi Porusa Mehta and P G Gokle with them for the respondents
October 2 1
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN CJ
The petitioner in this matter is a resident of Akola in the State of Madhya Pradesh and carries on business in various lines ie oil mills banking money lending etc
It is alleged that during the war years he made huge profits but evaded payment of tax
In the year 1948 the Central Government acting under section 51 of the Taxation on Income Investigation Commission Act 1947 referred his case to the Investigation Commission for investigation and report in respect of the profits made by him during the period commencing with 1st of January 1939 and ending on 31st of December 1947
The Commission after investigation reported on the 28th of February 1951 that the income of the petitioner concealed and withheld from taxation was in the sum of Rs 2725363 and the tax payable by him amounted to Rs 1844949
During the pendency of the investigation the peti tioner applied for settlement under the provisions of section 8 A of Act XXX of 1947
This application was forwarded along with the report by the Commission to the Central Government
In the settlement application the applicant proposed that he was prepared to pay the sum of RE
1844949 as under 775 On or before 25 6 1951 Rs
344949 On or before 25 3 1952 Rs 500000 On or before 25 3 1953 Rs
5000000 On or before 25 3 1954 Rs
5000000 and that he be given credit for a sum of Rs 32034 46 already paid by him The Central Government accepted this proposal and the claim for evaded income tax was thus finally settled by mutual agreement
The assessee subsequently asked for more time to pay these instalments and this was also granted from time to time
Commencing from 16th of July 1951 and till the 10th April 1954
the petitioner paid a total sum of about Rs 1400000 towards discharge of the liability voluntarily agreed to by him on account of the tax evaded
A sum of Rs 450000 still remains due and is payable in instalments up to the 25th of March 1955
By one of the terms of the settlement the petitioner undertook not to transfer mortgage charge or alienate or encumber in any manner whatsoever any of his movable or immovable properties barring stock intrade of the business except with the permission of the Commissioner of Income tax and except for the purpose of the payment of the tax due under the settlement
In June 1954 after the decision by this Court of Suraj Mal Mohta vs A V Visvanatha Sastri and Another1 the petitioner preferred this petition under the provisions of article 32 of the Constitution alleging that he had been advised that the entire proceedings under the Act which had resulted in the imposition upon him of a liability of Rs 1844949 and in the payment already made of an aggregate amount of Rs 1399175 were wholly illegal ultra vires void and unconstitutional and that the Income tax authorities were not legally entitled to recover the amount of Rs 450000 from him
In the grounds of the petition it was stated that sections 5 6 7 and 8 of Act XXX of 1947 were invalid and ultra vires in so far as they contravene the provisions of articles 14 191 f and 31 of the Constitution and that under the Act 1  776 there was no reasonable or equitable basic for classifica tion and that the Act gave to the execrative unrestrained and absolute right to pick and choose and to differentiate between the same class of taxpayers
It was also alleged that the procedure prescribed by the Act for discovering concealed profits was substantially different and was more prejudicial to the assessees than the procedure prescribed under the Indian Income tax Act by section 34
In the concluding paragraph of the petition it was prayed that an appropriate writ or direction be issued quashing the entire proceedings and all orders passed under the Act by the Central Government and the respondent Commission and restraining them from taking any proceedings whatsoever under the Act against the petitioner
It was further prayed that a direction be issued for restoration to the petitioner of a sum of Rs 1399715 10 6 with interest at 6 per cent and that the respondents be further restrained from taking any action against the petitioner for the recovery of the sum of Rs 450000 with interest
In our judgment this petition is wholly misconceived
Whatever tax the petitioner has already paid or whatever is still recoverable from him is being recovered on the basis of the settlement proposed by him and accepted by the Central Government
Because of his request for a settlement no assessment was made against him by following the whole of the procedure of the Income tax Act
In this situation unless and until the petitioner can establish that his consent was improperly procured and that he is not bound thereby he cannot complain that any of his fundamental rights has been contravened for which he can claim relief under article 32 of the Constitution
Article 32 of the Constitution is not intended for relief against the I voluntary actions of a person
His remedy if any lies in other appropriate proceedings
The learned counsel for the petitioner contended that apparently the application for a settlement seems to have been made under the pressure of circumstances and in view of the coercive machinery of Act XXX of 1947 and the settlement arrived in such circumstances 777 was not binding and could not be enforced
Whatever be the merits of such a contention it obviously cannot be raised in an application made under the provisions of article 32 of the Constitution
The forum for investigating such allegations is elsewhere
The result is that this petition fails and is dismissed with costs
Petition dismissed


Summary:
The petitioner a business man was alleged to have made huge profits during the years of War and the Central Government acting under section 51 of the Taxation on Income Investigation Commission Act 1947 XXX of 1947 referred his case to the Investigation Commission for investigation and report
During the pendency of the investigation the petitioner s application for settlement under the provisions of section 8 A of Act XXX of 1947 was accepted by the Central Government and in pursuance thereof the tax was made payable by installments and the claim for evaded income tax was thus finally settled be mutual agreement
When the installments in the sum of Rs 4 lacs odd still remained due the petitioner preferred the present petition under article 32 of the Constitution alleging that the entire proceedings under Act XXX of 1947 were illegal ultra vires void and unconstitutional that the Income tax authorities were not competent to recover the amount
due from him and that sections 5 6 7 and 8 of the Act were ultra vires as they infringed articles 14 191 f and 31 of the Constitution
Held that the petition under article 32 was not competent as whatever had already been paid or whatever was still recoverable from the petitioner was being recovered
on the basis of the 99 774 settlement between him and the Government
Article 32 is not intended for relief against the voluntary actions of a person
Suraj Mall Mohta Co vs A V Visvanatha Sastri AIR referred to