Case: Commissioner Of Income-Tax, Patiala &amp; Ors Vs. M/S. Shahzada Nand &amp; Sons &amp; Ors

a rule of construction, but it has no universal application. To invoke it, the general and special provisions shall occupy the same field. In this case, both during the period between the amendments of 1954 and 1956 thereafter they occupied different fields. By July 17, 1954, when sub-s. (1A) was introduced in S. 34, no proceedings under S. 34 (1) (a) could be initiated except for the assessment year 1946-47 in respect of the previous years that fell within the period beginning on September 1, 1939, and ending on March 31, 1946 for they were barred under the unamended section. Sub-section (1A), therefore, practically governed a situation that was not governed by the provisions of Section 34 (1) (a). It was intended to catch escaped incomes of the war years which were out of the reach of S. 34 (1) (a). It is not, therefore, appropriate to describe sub-s. (1A) as one carved out of sub-s. (1) (a) or to call it a species of which sub-s. (1) (a) is the genus. Sub-section (1A) operated where sub-s. (1) (a) practically ceased to function. 12. Now, coming to the period after the Finance Act, 1956, was passed, i.e., after April 1, 1956, a different situation arose. The extended period given under the second proviso to sub-s. (1A) expired on March 31, 1956. Thereafter, sub-s. (1A) ceased to be operative in the sense that no notice could thereafter be given thereunder. It worked itself out. The Legislature could, have extended the period under the second proviso to sub-s. (1A), but it did not do so. It did not give a further lease of life to it; instead it removed the period of limitation under sub-s. (1) (a), as sub-s. (1A) had become practically defunct. The wide phraselology of sub-s. (1) (a) takes in all the escaped concealed incomes during all the years commencing from 1941 and confers a power on the Income-tax Officer to give notice there under in respect of the said incomes without any bar of limitation. There is, therefore, no conflict after April 1, 1956, between sub-s. (1) (a) and sub-s. (1A) as the later ceased to be operative. 13. There is another way of looking at the problem. Sub-section (1A) does not really prescribe any period of limitation. It enables the Income-tax Officer to take proceedings within a particular time, though the period of limitation had expired. In this view, no question of carving out a species out of a genus arises. It conferred a special power on the Income-tax Officer and the said power expired on April 1, 1956. 14. There is yet another way of looking at the problem. The non-obstinate clause in sub-s. (1A) indicates that it was enacted to operate notwithstanding that the period of 8 years had expired. The said sub-section served its purpose only when the period of 8 years governed a notice under sub-s. (1) (a). But when that bar of limitation was removed, sub-s. (1A) had become otiose. 15. Sub-section (1B), as amended by the Finance Act of 1956, also throws some light on the interpretation of S. 34. Before it was amended, an assessee to whom a notice had been issued under sub-s. (1) (a) could apply to the Central Board of Revenue for settlement of the amount of tax payable by him. After the amendment, an assessee to whom a notice was given under sub-s. (1) (a) and under sub-s. (1A) for any of the years ending on March 31, 1941 to 1948 could apply for such a relief to the Central Board of Revenue. The years 1941 to 1948 are the war years. This sub-section, therefore, assumes that notice could be issued in respect of the war years under sub-s. (1) (a). The notice contemplated by sub-s. (1B) could only be a notice after the amendment of 1956, for such notice could not have been issued earlier under sub-s. (1) (a) in respect of the said years. The notice under sub-s. (1A) obviously refers to the notice issued before the amendment of 1956 and pending disposal. 16. Sub-section (4) added by the Indian Income-tax (Amendment) Act, 1959, also reinforces the said construction. As indicated earlier, that sub-section was added to get over the legal objection that proceedings barred before 1956 were not revived under the 1956 Act. It is true that sub-s. (4) refers only to sub-s. (1) (a), but the sub-section indicates that the Legislature assumed that proceedings after 1956 could only be taken under sub-s. (1) (a). 17. It was asked, with some plausibility, if the Legislature assumed that sub-s. (1A) ceased to be operative why it was retained along with its proviso prescribing a period of limitation in the amended section. Though no new notices could be issued under that sub-section after April 1, 1956, notices already issued before that date were pending. They would be disposed of in the manner prescribed by sub-ss. (1A), (1B), (1C) and (1D) of S. 34. All the said sub-sections formed an integral code. The Legislature, presumably, intended to keep the said sub-sections whereunder proceedings had already been initiated and make available to the said proceedings the procedure prescribed under the said provisions. It may also be that sub-s. (1A) was kept in superabundant caution. Whatever that may be, it cannot in the circumstances mentioned by us, detract from the clear provisions of sub-s. (1) (a). 18. We have carefully gone through the judgments of the various High Courts, namely, Bombay, Madhya Pradesh. Gujarat and Calcutta, cited at the Bar. We received considerable help from the reasonings contained in the said judgments. As we have in the course of the judgment dealt with the conflicting reasons given by the High Courts, we do not think it necessary to consider each of the four judgments in detail. For the reasons mentioned above, we agree with the conclusions arrived at by the Bombay and Calcutta High Courts in preference to those reached by the Madhya Pradesh and Gujarat High Courts.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]11. Section 34 (1) (a), as it now stands on the statute book, expressly states that in cases falling under Cl. (a) of sub.s. (1) notice can be served thereunder on an assessee at any time. The terms of S. 34 (1) (a), read with the 2nd proviso, take in the concealed incomes of all the years commencing from the year ending on March 31, 1941.It does not exclude the income of the war years, but the said incomes are sought to be excluded on the principle of generalia specialibus non derogant. As we have point out earlier, the said doctrine embodies a rule of construction, but it has no universal application. To invoke it, the general and special provisions shall occupy the same field. In this case, both during the period between the amendments of 1954 and 1956  thereafter they occupied different fields. By July 17, 1954, when sub-s. (1A) was introduced in S. 34, no proceedings under S. 34 (1) (a) could be initiated except for the assessment year 1946-47 in respect of the previous years that fell within the period beginning on September 1, 1939, and ending on March 31, 1946 for they were barred under the unamended section. Sub-section (1A), therefore, practically governed a situation that was not governed by the provisions of Section 34 (1) (a). It was intended to catch escaped incomes of the war years which were out of the reach of S. 34 (1) (a). It is not, therefore, appropriate to describe sub-s. (1A) as one carved out of sub-s. (1) (a) or to call it a species of which sub-s. (1) (a) is the genus. Sub-section (1A) operated where sub-s. (1) (a) practically ceased to function12. Now, coming to the period after the Finance Act, 1956, was passed, i.e., after April 1, 1956, a different situation arose. The extended period given under the second proviso to sub-s. (1A) expired on March 31, 1956. Thereafter, sub-s. (1A) ceased to be operative in the sense that no notice could thereafter be given thereunder. It worked itself out. The Legislature could, have extended the period under the second proviso to sub-s. (1A), but it did not do so. It did not give a further lease of life to it; instead it removed the period of limitation under sub-s. (1) (a), as sub-s. (1A) had become practically defunct. The wide phraselology of sub-s. (1) (a) takes in all the escaped concealed incomes during all the years commencing from 1941 and confers a power on the Income-tax Officer to give notice there under in respect of the said incomes without any bar of limitation. There is, therefore, no conflict after April 1, 1956, between sub-s. (1) (a) and sub-s. (1A) as the later ceased to be operative13. There is another way of looking at the problem. Sub-section (1A) does not really prescribe any period of limitation. It enables the Income-tax Officer to take proceedings within a particular time, though the period of limitation had expired. In this view, no question of carving out a species out of a genus arises. It conferred a special power on the Income-tax Officer and the said power expired on April 1, 195614. There is yet another way of looking at the problem. The non-obstinate clause in sub-s. (1A) indicates that it was enacted to operate notwithstanding that the period of 8 years had expired. The said sub-section served its purpose only when the period of 8 years governed a notice under sub-s. (1) (a). But when that bar of limitation was removed, sub-s. (1A) had become otiose15. Sub-section (1B), as amended by the Finance Act of 1956, also throws some light on the interpretation of S. 34. Before it was amended, an assessee to whom a notice had been issued under sub-s. (1) (a) could apply to the Central Board of Revenue for settlement of the amount of tax payable by him. After the amendment, an assessee to whom a notice was given under sub-s. (1) (a) and under sub-s. (1A) for any of the years ending on March 31, 1941 to 1948 could apply for such a relief to the Central Board of Revenue. The years 1941 to 1948 are the war years. This sub-section, therefore, assumes that notice could be issued in respect of the war years under sub-s. (1) (a). The notice contemplated by sub-s. (1B) could only be a notice after the amendment of 1956, for such notice could not have been issued earlier under sub-s. (1) (a) in respect of the said years. The notice under sub-s. (1A) obviously refers to the notice issued before the amendment of 1956 and pending disposal16. Sub-section (4) added by the Indian Income-tax (Amendment) Act, 1959, also reinforces the said construction. As indicated earlier, that sub-section was added to get over the legal objection that proceedings barred before 1956 were not revived under the 1956 Act. It is true that sub-s. (4) refers only to sub-s. (1) (a), but the sub-section indicates that the Legislature assumed that proceedings after 1956 could only be taken under sub-s. (1) (a)17. It was asked, with some plausibility, if the Legislature assumed that sub-s. (1A) ceased to be operative why it was retained along with its proviso prescribing a period of limitation in the amended section. Though no new notices could be issued under that sub-section after April 1, 1956, notices already issued before that date were pending. They would be disposed of in the manner prescribed by sub-ss. (1A), (1B), (1C) and (1D) of S. 34. All the said sub-sections formed an integral code. The Legislature, presumably, intended to keep the said sub-sections whereunder proceedings had already been initiated and make available to the said proceedings the procedure prescribed under the said provisions. It may also be that sub-s. (1A) was kept in superabundant caution. Whatever that may be, it cannot in the circumstances mentioned by us, detract from the clear provisions of sub-s. (1) (a)18. We have carefully gone through the judgments of the various High Courts, namely, Bombay, Madhya Pradesh. Gujarat and Calcutta, cited at the Bar. We received considerable help from the reasonings contained in the said judgments. As we have in the course of the judgment dealt with the conflicting reasons given by the High Courts, we do not think it necessary to consider each of the four judgments in detail. For the reasons mentioned above, we agree with the conclusions arrived at by the Bombay and Calcutta High Courts in preference to those reached by the Madhya Pradesh and Gujarat High Courts8. Before we advert to the said arguments, it will be convenient to notice the relevant rules of construction. The classic statements of Rowlatt, J., in CapeBrandy Syndicate v. Inland Revenue Commrs., (1921) 1 KB 64 at p.71, still holds the field. It reads:"In a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."To this may be added a rider : in a case of reasonable doubt, the construction most beneficial to the subject is to be adopted. But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. "The underlying principle is that the meaning and intention of a statute must be collected from the plain and unambiguous expression used therein rather than from any notions which may be entertained by the Court as to what is just or expedient." The expressed intention must guide the Court. Another rule of construction which is relevant to the present enquiry is expressed in the maxim, generalia specialibush means that when there is a conflict between a general and a special provision, the latter shall prevail. The said principle has been stated in Craies on Statute Law, 5th Edn., at p. 205, thus :"The rule is, that whenever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply."But this rule of construction is not of universal application. It is subject to the condition that there is nothing in the general provision, expressed or implied, indicating an intention to the contrary; see Maxwell on Interpretation of Statutes, 11th Edn., at pp.n the words of a section are clear but its scope is sought to be curtailed by construction, the approach suggested by Lord coke in In re; Heydons case, (1584) 3 Co. Rep. 7a, yields better results :"To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope, and object of the whole Act; to consider, according to Lord Coke : 1. What was the law before the Act was passed; 2. What was the mischief or defect for which the law had not provided; 3. What remedy Parliament has appointed; and 4. The reason of the remedy."9. With these rules of construction in mind, let us, now tackle the problem raised in this case. Under S. 34 (1) (a), after it was amended by the Finance Act, 1956, a notice in respect of an escaped concealed income could be issued at any time. The terms of Cl. (a) and the expression "at any time" are clear and unambiguous and, if there is nothing in the Act detracting from the width of the said terms, it is clear that a notice can be issued at any time in respect of the concealed income of any year not being a year ending before March 31, 1941. But S. 34 (1A) provides for the issue of notice in respect of escaped incomes of the previous years within the period beginning on September 1, 1939, and ending on March 31, 1946. Does thisn detract from the generality of S. 34 (1) (a)? The history of the said provision may usefully be noticed. As we have stated earlier, the Parliament passed the Taxation of Income (Investigation Commission) Act, 1947, mainly to catch the escaped incomes of the war profiteers. This Court in Suraj Mall Mohta and Co. v. K. V. Vishwanatha Sastri, (1954) 26 ITR 1   : (AIR 1954 SC 545  ), and Muthiah v. Commr. of, (1956) 29 ITR 390   : (S) AIR 1956 SC 269  ), held that S. 5 (4) and 5 (1) of the said Act became void on the commencement of the Constitution as offending Art. 14 thereof. The first decision led to the insertion of. (1A) to (1D) in S. 34 by thex (Amendment) Act. 1954, with effect from July 17, 1954. The object of the Amending Act was to provide for the assessment orreassessmentof persons who had, to a substantial extent, evaded payment of taxes during the war years and for matters connected therewith. But at the time. (1A) was inserted in S. 34, the period of limitation provided with regard to issue of notices under S. 34 (1) (a) was 8 years and for cases falling under S. 34 (1) (b) it was 4 years; but as thex (Amendment) Act, 1954, came into force only on July 17, 1954, the said periods of limitation prescribed in respect of escaped concealed incomes during the said period had run out except in respect of one or two years. So, with the twin object of extending the time and expediting the assessment, the second proviso was introduced therein to the effect that no such notice should be issued after March 31, 1956. But, notwithstanding the said Act, presumably notices could not have been issued against all the evaders of tax with incomes of rupees one lakh or more during the said period. Parliament also wanted to bring to tax escaped concealed income during the period not covered by the said years. With that object in 1956. S. 34 was amended by the Finance Act. 1956, by which it was provided that notice under S. 34 (1) (a) can be issued at any time. But sub.s. (1A) was retained, including the second proviso. This amendment, along with the other amendments, made by the said Act came into force on April 1, 1956. In 1959, the said section was again amended by the Indianx (Amendment) Act. 1959. Undersubs(4), as amended by the 1959 Amendment Act, notice under. (1) (a) might be issued at any time notwithstanding that at the time of the issue of notice the period of 8 years specified in then before its amendment by the Finance Act, 1956, had expired in respect of the year to which the notice related. This amendment was necessitated by the judgment of the Bombay and Calcutta High Courts in Debi Dutt v. T. Belan, (1959) 35 ITR 781   : (AIR 1958 Cal 398  ), and S. C. Prashar v. Vasantsen, (1956) 29 ITR 857 : ((S) AIR 1956 Bom 530  ), respectively holding that if the right of thex Officer to reopen an assessment was barred under the law for the time being in force, not enlargement of the time could revive such right in the absence of express words of necessary intendment.n (4) was added to S. 34 to make it abundantly clear that notice under Section 34 (1) (a) could be issued at any time notwithstanding that the said right was barred before the Amendment Act of 1956. This history of the legislation leaves no room for doubt that the intention of the Legislature was to bring the escaped concealed income of rupees one lakh and more to tax without any time limit. Before the 1956 Act was passed, the period of limitation prescribed for proceeding against concealed incomes of rupees one lakh and more during the war years and the earlier years had expired. The Legislature stepped in to prevent evasion of taxes on such incomes and lifted the ban of limitation in respect thereof, subject to certain conditions.