Case: Dewan Bahadur Seth Gopal Das Mohta Vs. The Union Of India And Another

1. The petitioner in this matter is a resident of Akola in the State of Madhya Pradesh and carries on business in various lines i.e., 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 5(1) 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 1947The 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. 27,25,363 / and the tax payable by him amounted to Rs. 18,44,949/2. During the pendency of the investigation the petitioner applied for settlement under the provisions of SectionA 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 Rs. 18,44,949/as under :On or beforeOn or beforeOn or beforeOn or beforeand that he be given credit for a sum of Rs.6 already paid by himThe Central Government accepted this proposal and the claim for evadedx 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 time3. Commencing from 16th of July 1951 and till the 10th April 1954 the petitioner paid a total sum of about Rs. 14,00,000 /towards discharge of the liability voluntarily agreed to by him on account of the tax evaded. A sum of Rs. 4,50,000/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, barringe of the business, except with the permission of the Commissioner ofx and except for the, purpose of the payment of the tax due under the settlement4. In June 1954, after the decision by this Court ofSuraj Mal Mohta and Co. v. A. V. Visvanatha Sastri, AIR 1954 SC 545  (A), the petitioner preferred this petition under the provisions of Article 32 of the Constitution alleging that he had been advised that the entire proceeding under the Act which had resulted in the imposition upon him of a liability of Rs. 18,44,949/ and in the payment already made of an aggregate amount of Rs. 13,99,175 /were wholly illegal, ultra vires, void and unconstitutional and that thex authorities were not legally entitled to recover the amount of Rs. 4.50,000/from him.

Court's reasoning:
5. 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 thex 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 voluntary actions of a person. His remedy, if any, lies in other appropriate proceedingsWhatever 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.