Laxmanappa Hanumantappa Jamkhandi vs The Union Of India And Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Petition No. 492 of 1954

Decision Date: 21 October, 1954

Coram: Mehar Chand Mahajan, Ghulam Hasan, Natwarlal H. Bhagwati

In this case the petitioner Laxmanappa Hanumantappa Jamkhandi filed a petition on 21 October 1954 against the Union of India and another respondent. The matter was heard by a Bench of the Supreme Court of India consisting of Chief Justice Mehar Chand Mahajan, Justice Ghulam Hasan and Justice Natwarlal H. Bhagwati. The official citation of the decision is 1955 AIR 3 and it has been reported subsequently in various law reports including 1957 SC 397, 1959 SC 149, 1959 SC 395, 1961 SC 65, 1961 SC 1457, 1962 SC 1006, 1962 SC 1563, 1962 SC 1621, 1966 SC 619, 1970 SC 470, and 1971 SC 870. The issues raised concerned the provisions of the Constitution of India, namely Articles 31(1), 32 and 265, and dealt with the question of whether a deprivation of property that is not a tax levy can be enforced under Article 32. The headnote of the judgment stated that because Article 265 contains a special provision that no tax shall be levied or collected except by authority of law, clause (1) of Article 31 must be understood to relate to deprivation of property other than by tax. Consequently, since the right created by Article 265 is not a fundamental right under Part III, it cannot be enforced through Article 32. The Court referred to the earlier decision of Ramjilal v. Income-tax Officer, Mohindergarh and also mentioned Suraj Mal Mohta and Co. v. A. V. Visvanatha Sastri. The petition, identified as Petition No. 492 of 1954, was filed under Article 32 for enforcement of the fundamental rights under Articles 31(1) and 19(1)(f) and sought writs of mandamus or certiorari and directions restraining the respondents from interfering with the petitioner’s property. Counsel B. Sen, I.N. Shroff and B.P. Singh appeared for the petitioner, while the Attorney-General for India, M.C. Setalvad, and Solicitor-General C.K. Daphtary, assisted by G.N. Joshi, P.A. Mehta and P.G. Gokhale, represented the respondents. The Court observed that the petitioner and his brothers were engaged in the trade of toddy and liquor. One brother also operated a bus service, dealt in cotton and engaged in money-lending. The brothers owned extensive agricultural and non-agricultural lands. Earlier, before the assessment year 1926-27, all the brothers were assessed together as a Hindu undivided family. From that year until 1946 they were assessed separately on the basis of a partition that they claimed to have effected.

In December 1946 the Income-Tax Officer initiated proceedings against the four brothers under section 34 on the premise that the partition claimed by them was inaccurate and, in truth, no partition had taken place, meaning that they continued to conduct their business jointly. Consequently the Officer issued an assessment under section 34 that treated the four brothers as a single association of persons for the fiscal year 1942-43. Similar assessment proceedings were subsequently launched for the financial years 1940-41, 1941-42 and 1943-44. In December 1947 the Central Government, convinced in good faith that the petitioner's brothers had earned substantial profits during the war and had evaded tax, referred the matter five times to the Income-Tax Investigation Commission pursuant to section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947. Reference number 175 addressed all the brothers collectively as an association, while the remaining four references concerned each brother individually. After hearing the matters, the Investigation Commission submitted a report to the Central Government on 26 September 1952, estimating that income of Rs 16,79,203 had escaped assessment between the years 1940-41 and 1948-49. Acting upon this report, the Central Government issued an order under section 8(2) of the same Act, directing that assessment proceedings be instituted under the Indian Income-Tax Act, the Excess Profits Tax Act, 1940, and the Business Profits Tax Act, 1947 against Messrs Jamkhandi Bros. as an association of persons so as to assess or reassess the income purportedly escaped. Following these directions, the Income-Tax Officer commenced assessment proceedings against Messrs Jamkhandi Bros. as an association. On 30 November 1953 the Officer passed several assessment orders, assessing the petitioner both under the Income-Tax Act and the Excess Profits Tax Act. Thereafter, recovery proceedings were instituted to collect the tax determined by the Officer; in the course of those proceedings the petitioner’s properties situated in the District of Belgaum were attached to secure payment of the dues, and one of his holdings consisting of approximately twelve land plots was sold by public auction in accordance with the provisions of the Bombay Land Revenue Code. On 20 September 1954 the petitioner filed the present application under article 32 of the Constitution. It appears that the petitioner filed the petition in the belief that the Supreme Court’s decision in Suraj Mal Mohta v. A. V. Visvanatha Sastri and Another was applicable to the present facts and that relief could be obtained against the now-final assessment orders by invoking article 32. The petition alleged that the attachment and subsequent sale of the petitioner’s properties were illegal and that such actions infringed the petitioner’s fundamental rights under

In the petition it was alleged that the actions taken under articles 31(1) and 19(1)(f) of the Constitution were violative of the petitioner’s fundamental rights. The petition further contended, citing A.I.R. 1954 S.C. 545, that the proceedings before the Income-tax Investigation Commission that were instituted after the Constitution came into force were illegal because they contravened articles 14 and 20(3) of the Constitution. It was also argued that, in light of the Supreme Court’s decision in Suraj Mal Mohta v. A. V. Visvanatha Sastri and Another, the proceedings under the Taxation on Income (Investigation Commission) Act, 1947 were discriminatory and that the references made by the Central Government under section 5(1) lacked a proper classification. Accordingly, the petitioner prayed that the Court issue a writ of mandamus and/or certiorari, or any other appropriate direction, to set aside the assessment orders made pursuant to the Central Government’s order under section 8(2) of the Taxation on Income (Investigation Commission) Act, 1947, and to restrain the respondents from attaching, selling, or otherwise interfering with the petitioner’s properties. From the factual backdrop it was evident that the proceedings under the impugned Act XXX of 1947 concluded, as far as the Investigation Commission was concerned, in September 1952, which was more than two years before this petition was filed. The assessment orders under the Income-tax Act were issued against the petitioner in November 1953. In these circumstances the Court was of the view that the petitioner was not entitled to any relief under article 32 of the Constitution. The Court relied on its earlier decision in Ramjilal v. Income-tax Officer, Mohindergarh, where it held that article 265 creates a special provision that taxes may be levied or collected only by authority of law, and therefore clause 1 of article 31 relates to deprivation of property other than by tax levied or collected, a right not conferred by Part III and thus not enforceable under article 32. Consequently, the petition under article 32 was deemed non-maintainable, and even otherwise, given the peculiar facts, it would not be just or proper, as indicated in the cited authority [1951] S.C.R. I27, to grant discretionary writs. When this position was presented to the learned counsel for the petitioner, he conceded that it could not be overcome. For the reasons outlined, the petition was dismissed with costs.