judgement:
7 of 1953.
Under article 32 of the Constitution of India, praying that the Order of the Governor of Uttar Pradesh dated the 29th August, 1952, revoking the grants made by the Rulers of Charkhari and Sarila in favour of the petitioners be declared void.
K. section Krishna Swamy Iyengar, and section P. Sinha (Bishan Singh and section section Shukla, with them) for the petitioners.
Gopalji Mehrotra and C. P. Lal for the respondent.
C. K. Daphtary, Solicitor General for India (G. N. Joshi, Porus A. Mehta and P. G. Gokhale, with him) for the Intervener.
April 29.
The Order of the Court was pronounced by BosE J.
This is a petition under article 32 of the the Constitution.
It raises an important question about the post Constitutional rights to property situate in 418 Indian States that were not part of British India before the Constitution but which acceded to the Dominion of India shortly before the Constitution and became an integral part of the Indian Republic after it.
The States in question here are Charkhari and Sarila.
In British days they were independent States under the paramountcy of the British Crown.
They acknowledged the British Crown as the suzerain power and owed a modified allegiance to it, but none to the Government of India.
In 1947 India obtained Independence and became a Dominion by reason of the Indian Independence Act of 1947.
The suzerainty of the British Crown over the Indian States lapsed at the same time because of section 7 of that Act.
Immediately after, all but three of the Indian States acceded to the new Dominion by executing Instruments of Accession.
Among them were the two States with which we are concerned.
The new Dominion of India was empowered to accept these accessions by a suitable amendment in the Government of India Act, 1935.
The sovereignty of the acceding States was expressly recognised and safeguarded.
The operative words of the Instrument of Accession which each Ruler signed were " Now Therefore I. .
Ruler of. . . in the exercise of my sovereignty in and over my said State do hereby execute this my Instrument of Accession.
" And clause 8 provided that "Nothing in this Instrument affects the continuance of my sovereignty in and over this State, or, save as provided by or under this Instrument, the exercise of any powers, authority and rights now enjoyed by me as Ruler of this State or the validity of any law at present in force in this State." Broadly speaking, the effect of the accession was to retain to the Rulers their full autonomy and sovereignty except on three subjects: Defence, External Affairs and Communications.
These were transferred to the Central Government of the new Dominion.
419 One other clause is important, clause 6, which provided that "Nothing in this Instrument shall empower the Dominion Legislature to make any law for the State authorising the compulsory acquisition of land for any ' purpose. . .
About the same time, each acceding Ruler entered into a standstill agreement with the Dominion of India.
The following clause is relevant: "Nothing in this agreement includes the exercise of any paramountcy functions.
" The alienations now in question were made in January, 1948.
On 5th January, 1948, the Ruler of Sarila granted the village Rigwara to the petitioners and on 28th January, 1948, the Ruler of Charkhari granted the villages Patha, Kua and Aichana, also to the petitioners.
After this, on 13th March, 1948, thirty five States in Bundelkhand and Baghelkhand (including Charkhari and Sarila) agreed to unite themselves into one State which was to be called the, United State of Vindhya Pradesh.
In pursuance of this agreement each of the thirty five Rulers signed a covenant on 18th March, 1948, which brought the new State into being.
It is important to note that this was a purely domestic arrangement between themselves and not a treaty with the Dominion of India.
Each Ruler necessarily surrendered a fraction of his sovereignty to the whole but there was no further surrender of sovereign powers to the Dominion of India beyond those already surrendered in 1947, namely Defence, External Affairs and Communications.
Despite the readjustment, the sum total of the sovereignties which had resided in each before the covenant now resided in the whole and its component parts: none of it was lost to the Dominion of India.
Soon after this, the Revenue Officers of the newly formed Vindhya Pradesh Union tried to interfere with the grants made by certain Rulers of the integrating States before the integration; among them were the grants in question here.
This occasioned complaints to the Vindhya Pradesh Government and that 420 Government decided on 7th December, 1948, to respect the impugned grants.
The Revenue Minister 's order of that date runs "After considering over the whole question it has ,been decided that such grants made by the Rulers before signing the covenant should be respected, because constitutionally the V.P. Government should not refuse recognition to such grants unless they are directed otherwise by the State Ministry.
" Orders were accordingly issued to the Revenue Officers concerned to "abstain from interfering in such grants." This decision was communicated to the Rulers of Charkhari and Sarila on 13th March, 1949.
They were told that their grants would be respected.
The integration did not work satisfactorily, so, on 26th December, 1949, the same thirty five Rulers entered into another agreement abrogating their covenant and dissolving the newly created State as from 1ST January, 1950.
By the same instrument each Ruler ceded to the Government of the Indian Dominion as from the same date "full and exclusive authority, jurisdiction and powers for, and in relation to, the governance of that State." Article II provided that "As from the aforesaid day, the United State of Vindhya Pradesh shall cease to exist, and all the property, assets and liabilities of that State, as well as its rights, duties and obligations, shall be those of the Government of India." This Instrument was called the Vindhya Pradesh Merger Agreement.
The Government of the Indian Dominion was also a party and its Secretary in the Ministry of States appended his signature to the document.
Each Ruler was guaranteed a privy parse and all the personal privileges, dignities and titles enjoyed by him at the date of the Agreement.
Imme diately after the clause guaranteeing the privy purse comes the following Article IV (2) The said amount is intended to cover all the expenses of the Ruler and his family. . and shall 421 neither be increased nor reduced for any reason what soever.
" The following clauses are also relevant: Article VI "The Government of India guarantees the succession, according to law and custom, to the gaddi of each Covenanting State, and to the personal rights, privileges, dignities and titles of the Ruler thereof.
Article VII (1)The Ruler of each Covenanting State shall be entitled to the full ownership, use and enjoyment of all private properties (as distinct from State properties) belonging to him on the date of his making over the administration of that State to the Raj Pramukh in pursuance of the Covenant.
(2)If any dispute arises as to whether any item of property is the private property of the Ruler or State property, it shall be referred to a judicial officer to be nominated by the Government of India, and the decision of that officer shall be final and binding on all parties concerned.
Article VIII No enquiry shall be made by or under the authority of the Government of India, and no proceeding shall lie in any Court, against the Ruler of any Covenanting State, whether in a personal capacity or otherwise, in respect of anything done or omitted to be done by him or under his authority during the period of his administration of that State.
" The Dominion Government took over the administration of the States which formed Vindhya Pradesh on 1st January, 1950, and decided to form them into a Chief Commissioner 's Province.
It did this by a Notification of the Governor General dated 22nd January, 1950, and brought the new Province into being on 23rd January, 1950.
But the four villages we are concerned with (called enclaves) were taken out of this Province on 25th January, 1950, and absorbed into the United Provinces (now Uttar Pradesh) by an Order of the Governor General entitled 422 the Provinces and States (Absorption of Enclaves) Order, 1950.
This Order was made under sections 290, 290 A and 290 B of the Government of India Act, 1935.
The portions of that Order relevant for the present purpose are these: " 3 (1) As from the appointed day, every enclave specified in the First Schedule.
shall cease to form part of the surrendering unit, and shall be included in, and form part of, the absorbing unit. . . . "6.
All property and assets within an enclave which, immediately before the appointed day, vested in the Government of the surrendering unit shall, as from that day, vest in the Government of the absorbing unit.
7.All rights, liabilities and obligations, whether arising out of contract or otherwise, of the Government of a surrending unit in relation to an enclave shall, as from the appointed day, be the rights, liabilities and obligations, respectively, of the Government of the absorbing unit.
8.All laws in force in an enclave immediately before the appointed day shall, as from that day, cease to be in force in that enclave, and all laws in force in the absorbing unit shall, as from that day, extend to, and be in force in, that enclave.
" The Constitution came into force on 26th January, decided to reopen the question of revocation which the Vindhya Pradesh Government had settled on 7th December, 1948, and on 29th August, 1952, more than two and a half years after the Constitution and four and a half years after the grants, the Uttar Pradesh Government,in consultation with the Government of India, revoked the grants with which we are concerned.
The Governor of Uttar Pradesh issued the following order on 29th August, 1952 : " Subject : Voidable grants of Jagirs and Muafis made by the Rulers of Charkhari and Sarila before the integration.
423 With reference to your endorsement No. 3885/XV 110 1950 dated September 30, 1950, on the above subject, I am directed to say that, in consultation with the Government of India, the Governor has decided to revoke the grants made by the rulers of Charkhari and Sarila on or after January.1, 1948, to the members of their families relations and others Copies of this order were forwarded to the Rulers of Charkhari and Sarila on 29th January, 1953.
This occasioned the present petition under article 32 of the Constitution against the State of Uttar Pradesh.
The Union Government was allowed to intervene.
The State of Uttar Pradesh made the following affidavit in reply: "(3) That immediately before or after the signing of the agreement some Rulers of the Indian States constituting the Vindhya Pradesh Union, whose territories were subsequently absorbed in the Uttar Pradesh, had granted jagirs and muafis of land to their near relations mala fide and thereby indirectly increased their privy purse.
(4) That it appears that Vindhya Pradesh Government opened the case of mala fide grants made by the rulers of integrating States and at their instance the Government of India issued instructions to the Uttar Pradesh Government to do the same.
The effect of these grants is to increase the privy purse of the ruler. whose responsibility it was to support the grantees.
" The operative order of revocation was made by the Governor of Uttar Pradesh, and under the Constitution it is clear that no State Government has the right to do anything in the nature of an act of State, but in view of the fact that the revocation was made in consultation with the Government of India, we were I asked to treat the Uttar Pradesh Governor as a delegate of the sovereign authority whose act has been approved and ratified by that authority, along the 424 lines of Buron vs Denman(1), The Secretary of State in Council of India vs Kamachee Boye Sahaba(2) and Johnstone vs Pedlar(3), and to decide on that basis whether the Union Government had the right and power to revoke these grants as an act of State.
Jurists hold divergent views on this matter.
Atone extreme is the view of the Privy Council in a series of cases.
Their effect was summarised in Vajesingji Joravarsingji vs Secretary of State for India in Council(1) and again in Secretary of State vs Sardar Rustam Khan(5) in the following words: "A summary of the matter is this : when a territory is acquired by a sovereign State for the first time that is an act of State.
It matters not how the acquisition has been brought about.
It may be by conquest, it may be by cession following on treaty, it may be by occupation of territory hitherto unoccupied by a recognised ruler.
In all cases the result is the same.
Any inhabitant of the territory can make good in the municipal Courts established by the new sovereign only such rights as that sovereign ' has, through his officers, recognised.
Such rights as he had under the rule of predecessors avail him nothing.
Nay more, even if in a treaty of cession it is stipulated that certain inhabitants should enjoy certain rights, that does not give a title to those inhabitants to enforce these stipulations in the municipal Courts.
The right to enforce remains only with the high contracting parties;" also in the Secretary of State in Council of India vs Kamachee Boye Sahaba (2) and in Johnstone vs Pedlar(6 ) as follows: " Of the propriety or justice of that act, neither the Court below nor the Judicial Committee have the means of forming, or the right of expressing, if they had formed, any opinion.
It may have been just or unjust politic or impolitic, beneficial or injurious, taken as a whole, to those whose interests are affected.
These are considerations into which their Lordships cannot enter.
It is sufficient to say that; even if a wrong has (1) (2) 7 M. I. A. 476 at 540.
(3) ; at 279.
(4)51 1.
A. 357 at 36o.
(5)68 I. A. 1o9 at 124.
(6)[1921] 2 A.C. 262 at 280, 425 been done, it is a wrong for which no Municipal Court of justice can afford a remedy.".
According to the Privy Council in Secretary of State for India in Council vs Bai Rajbai (1) and also in Vajesingji Joravarsingji vs Secretary of State for India in Council (9), the burden of proving that the new sovereign has recognised the old rights lies on the party asserting it.
The learned Solicitor General relies on these cases.
At the other extreme is the view of Chief Justice John Marshall of the United States Supreme Court.
He said in the United States vs Percheman (3) in the year 1833: "It may not be unworthy of remark that it is very unusual, even in cases of conquest, for the conqueror to do more than to displace the sovereign and assume dominion over the country.
The modern usage of nations, which has become law, would be violated; that sense of justice and of right which is acknowledged and felt by the whole civilised world would be outraged, if private property should be generally confiscated, and private rights annulled.
The people change their allegiance; their relation to their ancient sovereign is dissolved; but their relations to 'each other, and their rights of property, remain undisturbed.
If this be the modern rule even in cases of con ' quest, who can doubt its application to the case of an amicable cession of territory ?. .
A cession of territory is never understood to be a cession of the property belonging to its inhabitants.
The king cedes that only which belonged to him.
Lands he had previously granted were not his to cede.
Neither party could so understand the cession.
Neither party could consider itself as attempting a wrong to individuals, condemned by the practice of the whole civilised world.
The cession of a territory by its name from one sovereign to another; conveying the compound idea of surrendering at the same time the lands and the people who inhabit them, would be necessarily understood to pass (1)42 I.A. 229 at 239.
(2)51 I.A. 357 at 361.
(3) ; at 86, 87, 55 426 the sovereignty only, and not to interfere with private property.
" This view was followed by Cardozo J. in 1937 in Shapleigh vs Mier (1).
He said : "Sovereignty was thus transferred, but private ownership remained the same To find the the title to the land today we must know where title stood while the land was yet in Mexico.
" We gather from Hyde 's International Law, Volume I, second edition, page 433, that the came principle was laid down by the Permanent Court of International Justice.
The learned author quotes the Court as saying in its Sixth Advisory Opinion of September 10, 1923, on certain questions relating to settlers of German origin in the territory ceded by Germany to Poland " Private rights acquired under existing law do not cease on a change of sovereignty.
No one denies that the German Civil Law, both substantive and adjective, has continued without interruption to operate in the territory in question.
It can hardly be maintained that, although the law survives, private rights acquired under it have perished.
Such a contention is based on no principle and would be contrary to an almost universal opinion and practice It suffices for the purposes of the present opinion to say that even those who contest the existence in international law of a general principle of State succession do not go so far as to maintain that private rights including those acquired from the State as the owner of the property are invalid as against a successor in sovereignty." The learned counsel for the petitioners relies on this class of case and derives this much support for it from the Privy Council in Mayor of Lyons vs East India Company (2) where Lord Brougham said: " It is agreed, on all hands, that (when) a foreign settlement (is) obtained in an inhabited country, by conquest, or by cession the law of the country continues until the Crown, or the Legislature, change it." (1) ; at 470.
(2) I M.I.A, 175 at 270, 271, 427 It is right however to point out that Hyde places limitations on the doctrine at page 432 and that the learned authors of Corpus Juris: International Law, Volume 33, page 415, place the limitation that in the absence of express understanding a conqueror assumes no obligations of the conquered state.
This distinction was also drawn by Lord Alverstone C.J. in West Rand Central Gold Mining Company vs Rex (1) where, commenting on the American cases, he said that there is a difference between the private rights of individuals in private property and contractual rights which are sought to be enforced against the new sovereign.
He said : " It must not be forgotten that the obligations of conquering States with regard to private property of private individuals, particularly land as to which the title had already been perfected before the conquest or annexation, are altogether different from the obligations which arise in respect of personal rights by contract.
As is said in more cases than one, cession of territory does not mean the confiscation of the property of individuals in that territory.
If a particular piece of property has been conveyed to a private owner or has been pledged, or a lien has been created upon it, considerations arise which are different from those which have to be considered when the question is whether the contractual obligation of the conquered State towards individuals is to be undertaken by the conquering State." Lord Alverstone also pointed out that in the American cases, on which the international jurists have based their views, the treaties of cession as well as the subsequent legislation of the United States protected the rights of owners of private property as they existed at the time of cession and so the only question for decision in each of those cases was whether any private rights of property actually existed at the relevant date.
Now that is also the English law, for the Privy Council and the House of Lords have also held that the new sovereign can choose to waive his rights and recognise titles and rights as they existed at the date of cession.
(1) [T905] 2 K.B. 391 at 411.
428 This recognition can be given either by legislation or by proclamation and it can even be inferred from the mode of dealing with the property after the cession: Forester vs Secretary of State for India in Council ( ) (legislation); Secretary of State vs Bai Rajbai (2) (agreement, legislation and mode of dealing); Mayor of Lyons vs East India Company (3) (waiver) and at page 285 (relinquishment) ; also Vajesinghji Joravarsinghji vs Secretary of State for India(1) and Secretary of State vs Sardar Rustam Khan (5).
In dealing with the views of international jurists, Lord Halsbury insisted that they were only enunciations of what in their opinion the law ought to be and had no binding force.
He said in the House of Lords in Cook vs Sorigg (6): " It is no answer to say that by the ordinary principles of international law private property is respected by the sovereign which accepts the cession and assumes the duties and legal obligations of the former sovereign with respect to such private property within the ceded territory.
All that can be properly meant by such a proposition is that according to the well understood rules of international law a change of sovereignty by cession ought not to affect private property, but no municipal tribunal has authority to enforce such an obligation.
And if there is either an express or a well understood bargain between the ceding potentate and the Government to which the cession is made that private property shall be respected, that is only a bargain which can be enforced by sovereign against sovereign in the ordinary course of diplomatic pressure.
" His view was endorsed by the Privy Council in Secretary of State vs Sardar Rustam Khan(5) and again in the House of Lords in Johnstone vs Pedlar(7).
Lord Alverstone C. J. analysed in detail how far international law can be accepted and applied in municipal (1) 1872 73 I.A. Supplt.
Io at 17.
(2) 42 I.A. 229 at 237.
(3) I M.I.A. 175 at 281.
(4) 51 I.A. 357 at 361.
(5)681 I.A. 109 at 123.
(6) at 578.
(7) ; at 281.
429 Courts of justice in West Rand Central Gold Mining Company vs Rex(1) and set out reasons for the above conclusion.
The learned counsel for the petitioners also relies on another limitation which the English Courts have placed on an act of State.
He says that even if the right to con fiscate be conceded it must be taken to have been waived if either the Crown or its officers purport to act under colour of a legal title and not arbitrarily.
He contended that arbitrariness was of the essence in a ', act of State.
He relied on Secretary of State in Council of India vs Kamachee Boye Sehaba(2),Forester vs Secretary of State for India in Council (3) and Johnstone vs Pedlar(4).
He pointed out that the affidavit of the respondent shows that Government decided to confirm all grants except those which were mala fide.
Therefore, this was no arbitrary act of annexation but an attempt to exercise what was thought to be a legal right.
We do not intend to discuss any of this because, in our opinion, none of these decisions has any bearing on the problem which confronts us, namely, the impact of the Constitution on the peoples and territories which joined the Indian Union and brought the Constitution into being.
The flow of events up to the date of final accession, 1st January, 1950, are only of historical interest in the present matter.
The Rulers of Charkhari and Sarila retained, at the moment of final cession, whatever measure of sovereignty they had when paramountly lapsed, less the portion given to the Indian Dominion by their Instruments of Accession in 1947; they lost none of it during the interlude when they toyed with the experiment of integration.
There was then redistribution of some of its aspects but the whole of whatever they possessed before the integration returned to each when the United State of Vindhya Pradesh was brought to an end and ceased to exist.
Thereafter each acceded to the Dominion of India in his own right.
Now it is undoubted that the accessions and the acceptance of them by the Dominion of India were (1)[19O5] 2 K B 391 at 401 408.
(3) 1872 73 I.A. Supplt.
10 at 17.
(2) 7 M.I.A. 476 at 53I. (4) ; at 281.
430 acts of State into whose competency no municipal Court could enquire; nor can any Court in India, after the Constitution, accept jurisdiction to settle any dispute arising out of them because of article 363 and the proviso to article 131; all they can do is to register the fact of accession; see section 6 of the Government of India Act, 1935, relating to the Accession of States.
But what then? Whether the Privy Council view is correct or that put forward by Chief Justice Marshall its broadest outlines is more proper, all authoritiesd re agreed that it is within the competence of the new sovereign to accord recognition to existing rights in the conquered or ceded territories and, by legislation or otherwise, to apply its own laws to them; and these laws can, and indeed when the occasion arises must, be examined and interpreted by the municipal Courts of the absorbing State.
Now in the present case, what happened after the final accession? There was already in existence in 1949 section 290 A of the Government of India Act, 1935, which provided as follows: "Administration of certain Acceding States as a Chief Commissioner 's Province. . (1)Where full and exclusive authority, jurisdiction and powers for and in relation to the Government of any Indian State or of any group of such States are for the time being exercisable by the Dominion Government, the Governor General may by Order direct (a)that the State or the group of States shall be administered in all respects as if the State or the group of States were a Chief Commissioner 's Province. . (2) Upon the issue of an Order under clause (a) of sub section (1) of this section, all the provisions of this Act applicable to the Chief Commissioner 's Province of Delhi shall apply to the State or the group of States in respect of which the Order is made.
The final Instrument of Accession complies with sub section (1) above.
The necessary Order was made and the Chief Commissioner 's Province of Vindhya 431 Pradesh, which at that date included the property in dispute, came into being on 23rd January.
Now it is beyond dispute that there neither can, nor could, be confiscation of property, as an act of State in the Chief Commissioner 's Province of Delhi.
It is difficult to see how there could be in an area which was being administered by the Dominion Government in all respects as a Chief Commissioner 's Province even if the person in possession was not, at the time, a national of the country, an assumption which is by no means indisputable; indeed that is the effect of the decision of the Privy Council in Mayor of Lyons vs East India Company(1).
There would appear to have been a clear election by the sovereign authority expressed in its own legislation to waive its rights of confiscation even if they were there (a point we do not decide); and the same consequences followed when the properties in dispute were incorporated into the State of Uttar Pradesh, two days later, on 25th January, 1950.
The Privy Council go even further in Mayor of Lyons vs East India Company at page 285 and say that the waiver or relinquishment can be established from the treaty itself. ". it cannot be denied that the Crown may relinquish its prerogative; indeed, whenever the inhabitants of conquered provinces are held to obtain the rights of subjects by treaty, (and even Sir F. Norton has no doubt of this being possible) those who hold the doctrine the most vigorously must say that the treaty is a voluntary abandonment of a right of the Crown.
It evidences the will of the sovereign to exempt the conquered territory from this branch of his prerogative.
But the same will of the sovereign may be collected from other circumstances, and the like abandonment of the prerogative be thus evidenced.
" But however that may be, the fact remains that the titles of these petitioners to the disputed lands had not been repudiated tip to the 26th of January, 1950.
It is immaterial whether or not the right of the Dominion Government to do so remained in abeyance till exercised despite the agreement embodied in the (1) I M. I.A. 175 at 274, 275 432 Instruments of Accession and the legislation and notification quoted above because, in fact, it was not exercised.
Now what was the effect of the non exercise of those rights ? Even on the English view, the, person in de facto possession is not without rights in the land, nor is he altogether without remedy.
It is just a question of the means of redress.
In Johnstone vs Pedlar(1) Lord Atkinson, speaking in the House of Lords, said: "It is on the authorities quite clear that the injury inflicted upon an individual by the act of State of a sovereign authority does not by reason of the nature of the act by which the injury is inflicted cease to be a wrong.
What these authorities do establish is that a remedy for the wrong cannot be sought for in the Courts of the sovereign authority which inflicts the injury, and that the aggrieved party must depend for redress upon the diplomatic action of the State, of which he is a subject.
" So also in Forester vs Secretary of State for India(9), the Begum, whose estate Government sought to confiscate as an act of State, was only in de facto possession: see page 16.
The Privy Council held that the Government had purported to act under colour of a legal title, so its attempt at resumption was not an act of State and consequently could be reviewed in the Courts.
Their Lordships thereupon proceeded to investigate the Begum 's title, not under the British Government, but as derived from the sovereign power which preceded it (page 18).
So also in Mayor of Lyons vs East India Company(3), the title of a foreign alien to land was upheld, not under the English law (because if that had applied there would have been an escheat), but under the law in India derived from non British sources, that is to say, under the laws of the land before cession.
It was held that those laws continued until changed and for that reason a title which would have been bad under the English law was upheld.
At page 274 their Lordships say: (1) ; at at 274, 275.
(2) 1872 73 I.A. Supplt.
433 "It follows from what has been observed, not only that Calcutta was a district acquired in a country peopled, and having a Government of its own, but that, for a long course of time no such law as that which incapacitates aliens, could be introduced, any more than it could now be introduced into such part of the Asiatic.
or Portuguese territory. " and at page 271 they had already said "In the former case, it is allowed, that the law of the country continues until the Crown, or the Legislature, change it." Lord Atkinson 's view in Johnstone vs Pedlar(1) at page 281 appears to point to the same conclusion.
He said: "And even where the person aggrieved was an independent rajah, against WhOM the East India Company made war, and having made him prisoner, seized his property, it was apparently considered by Sir John Romilly M. R. in Ex Rajah of Coorg vs East India Company(2) that the company notwithstanding that this act was an act of State ' could have been sued in respect of any property seized by them which belonged to the rajah in his private capacity as his personal property and not in his character of rajah.
" We think it is clear on a review of these authorities ,that whichever view be taken, that of the Privy Council and the House of Lords, or that of Chief Justice Marshall, these petitioners, who were in de facto possession of the disputed lands, had rights in them which they could have enforced up to 26th January, 1950, in the Dominion Courts against all persons except possibly the Rulers who granted the land and except possibly the State.
We do not by 'any means intend to suggest that they could not have enforced them against the Rulers and the Dominion of India as well, but for reasons which we shall presently disclose it is not necessary to enter into that particular controversy.
It is enough for the purposes of this case to hold that the petitioners had, at any rate, the rights defined above.
(1) ; , (2) ; , 56 434 Now what was the extent of the petitioners ' rights? These properties were not State properties in the sense of public buildings and so forth.
They were indisputably properties over which the Rulers bad absolute rights of disposition at the date of the grants.
The grants are absolute in character and would under any civilised system of, law pass an absolute and indefeasible title to the grantee.
Let it be conceded, as was argued (though we do not so decide), that they were defensible at the mere will of a sovereign who held absolute and despotic sway over his subjects in all domestic concerns.
The fact remains that up till that time they were neither resumed by the former rulers nor confiscated by the Dominion of India as an act of State.
Therefore, up to the 25th of January, 1950, the right and title of the petitioners to continue in possession was good, at any rate, against all but the Rulers and the Dominion of India.
Now what effect did the Constitution have on that? In our opinion, the Constitution, by reason of the authority derived from, and conferred by, the peoples of this land, blotted out in one magnificent sweep all vestiges of arbitrary and despotic power in the territories of India and over its citizens and lands and prohibited just such acts of arbitrary power as the State now seeks to uphold.
Let it be conceded (without admitting or deciding the point) that the Dominion of India once had the powers for which the Union Government now contends.
The self same authorities which appear to concede that power also admit that it can be waived or relinquished.
What then was the attitude of the Dominion towards those States which it sought to draw into the Republic of India which was yet to be free, sovereign, democratic, as its Constitution later proclaimed it to be? We quote from the mouthpiece of that Government as disclosed in the White Paper on Indian States published by official authority.
Sardar Vallabhbhai Patel 's statement (he was then in charge of the States Department) 5th July, 1947, is reproduced at page 157.
He said at page 158: "This country with its institutions is the proud heritage of the people who inhabit it, It is an accident 435 that some live in the States and some in British India but all alike partake of its culture and character.
Weare all knit together by bonds of blood and feeling.
no less than of self interest ' None can segregate us into segments; no impassable barriers can be set up between us.
I suggest that it is therefore better for us to make laws sitting together as friends than to make treaties as aliens.
I invite my friends,the Rulers of States and their people to the Councils of Constituent Assembly in this spirit of friendliness and co operation in a joint endeavour, inspired by common allegiance to our motherland for the common good of us all." This invitation was accepted on 19th May, of the White Paper says "As the States came closer to the Centre it became clear that the idea of separate Constitutions being framed for different constituent units of the Indian Union was a legacy from the Rulers ' polity which could have no place in a democratic set up.
The matter was, therefore, further discussed by the Ministry of States with the Premiers of Unions and States on May 19, 1949, and it was decided, with their concurrence, that the Constitution of the States should also be framed by the Constituent Assembly of India and should form part of the Constitution of India.
" It is impossible to think of those who sat down together in the Constituent Assembly, and of those who sent representatives there, as conqueror and conquered, as those who ceded and as those who absorbed, as sovereigns or their plenipotentiaries, contracting alliances and entering into treaties as high contracting parties to an act of State.
They were not there as sovereign and subject as citizen and alien, but as the sovereign peoples of India, free democratic equals, forging the pattern of a new life for the common weal.
Every vestige of sovereignty was abandoned by the Dominion of India and by the States and surrendered to the peoples of the land who through their representatives in the Constituent Assembly hammered out for themselves a new Constitution in which all were citizens in a new order having but one 436 ie, and owing but one allegiance: devotion, loyalty, idelity, to the Sovereign Democratic Republic that is India.
At one stroke all other territorial allegiances were wiped out and the past was obliterated except where expressly preserved; at one moment of time the new order was born with its new allegiance springing from the same source for all, grounded on the same basis: the sovereign will of the, peoples of India with no class, no caste, no race, no creed, no distinction, no reservation.
The Preamble to the Constitution recites in its magnificient prelude "We, The People of India, having solemnly resolved to constitute India into a Sovereign Democratic Republic and to secure to all its citizens: Justice, Liberty, Equality, Fraternity; In our Constituent Assembly this 26th day of November 1949, do hereby Adopt, Enact and Give to Ourselves This Constitution." Article 1(1) sets out that India shall be a Union of States and clauses (2) and (3) define the territories of which India shall be composed.
They include the territories in which the disputed lands are situate.
Article 5 defines Indian citizens.
They include in their wide embrace the Rulers of Charkhari and Sarila who made the grants, the petitioners who received them and those who now seek as an act of State to make the confiscation.
It is impossible for a sovereign to exercise an act of State against its own subjects.
However disputable the proposition may be.
that an act of State can be exercised against a citizen who was once an alien the right being only in abeyance till exercised, there has never been any doubt that it can never be exercised against one who has always been a citizen from the beginning in territory which has from its inception belonged to the State seeking to exercise the right.
This is so even on the English authorities which claim 437 far higher rights for the State than other laws seem to allow.
Lord Atkinson said in Johnstone vs Pedlar(1) at page 281 : The last words of Lord Halsburv 's judgment clearly suggest that the Government of this country cannot assert as a defence against one of their own subjects that an act done to the latter 's injury was an act of State, since such a subject clearly could not rely on his own sovereign bringing diplomatic pressure against himself to right the subject 's wrong.
In conformity with this Principle it was held in Walker vs Baird (2), that where the plaintiffs are British subjects in an action for trespass committed within British territory in time of peace it is no answer that the trespass was an act of State, and that thereby the jurisdiction of the municipal Courts was ousted.
" And so Lord Phillimore said at page 295: " Because between Her Majesty and one of her subjects there can be no such thing as an act of State." Lord Brougham went further in Mayor of Lyon8 vs East India Company(3), and extended the principle to aliens who later became citizens.
He said at pages 284 and 285: " But this position seems wholly untenable, for all the authorities lay it down that upon a conquest the inhabitants ante nati, as well as post nati, of the conquered country become denizens of the conqueror 's country; and to maintain that the conquered people become aliens to their new sovereignty upon his accession to the dominion over them, seems extremely absurd. .
The Court below, it must be observed, distinctly admit that conquest operates what they term a virtual naturalization." But however that may be, there is no question of conquest or cession here., The new Republic was born on 26th January, 1950, and all derived their rights of citizenship from the same source and from the same moment of time; so also, at the same instant and for the same reason, all territory within its boundaries (1) [19211 2 A.C. 262.
(3) 1 M.I.A. 175.
(2) [1892]A A.C. 491.
438 became the territory of India.
There is, as it were from the point of view of the new State, Unity of Possession, Unity of Interest, Unity of Title and Unity of Time.
This was also quite clearly the will of the Union Government as expressed in its White Paper, so even if the case was still one of cession there is clear evidence of relinquishment and waiver.
At page 115 it is said : " With the inauguration of the new Constitution, the merged States have lost all vestiges of existence as separate entities "; and at page 130: The new Constitution of India gives expression to the changed conception of Indian unity brought about by the 'unionisation ' of states and at page 131 " Unlike the scheme of 1935 the new Constitution is not an alliance between democracies and dynasties but a real union of the Indian people built on the concept of the sovereignty of the people All the citizens of India, whether residing in States or Provinces, will enjoy the same fundamental rights and the same legal remedies to enforce them.
In the matter of their constitutional relationship with the Centre and in their internal set up, the States will be on a par with the Provinces.
The new Constitution therefore finally eradicates all artificial barriers which separated the States from Provinces and achieves for the first time the objective of a strong, united and democratic India built on the true foundations of a co operative enter prise on the part of the peoples of the Provinces and the States alike.
" But we do not found on the will of the Government.
We are no longer concerned with principalities, and powers.
"We have upon us the whole armour of the Constitution and walk from henceforth in its enlightened ways, wearing the breastplate of its protecting provisions and flashing the flaming sword of its inspiration.
439 It was not denied that if the present action of the State cannot be defended as an act of State it cannot be saved under any provision of law.
Whether the State would have the right to set aside these grants in the ordinary Courts of the land, or whether it can deprive the petitioners of these properties by legislative process, is a matter on which we express no opinion.
It is enough to say that its present action cannot be defended.
Article 31(1) of the Constitution is attracted as also article 19(f).
The petitioners are accordingly entitled to a writ under article 32(2).
A writ will accordingly issue restraining the State of Uttar Pradesh from giving effect to the orders complained of and directing it to restore possession to the petitioners if possession has been taken, The petitioners will be paid their costs by the State of Uttar Pradesh.
The intervener will bear its own.
Writ allowed.

summary:
The petitioners were granted in January, 1948, Jagirs and Muafis by the Ruler of Sarila State in one village and by the Ruler of Charkhari State in three villages.
In March, 1948, a Union of 35 States including the States of Sarila and Charkhari was formed into the United State of Vindhya Pradesh.
The Vindhya Pradesh Government confirmed these grants in December, 1948, when its Revenue Officers interfered with them questioning their validity.
The integration of States however did not work well and the same 35 Rulers entered into an agreement in December, 1949, and dissolved the newly created State as from 1st January, 1950, each Ruler acceding to the Government of India all authority and jurisdiction in relation to the Government of that State, the Instrument being called the Vindhya Pradesh Merger agreement.
Article VIII of the Instrument stated: "No enquiry shall be made by or under the authority of the Government of India, and no proceeding shall be taken in ' any Court against the Ruler of any covenanting State, whether in a personal capacity or otherwise in respect of anything done or omitted to be done by him or under his authority during the period of his administration of that State." The States which formed Vindhya Pradesh were transformed into a Chief Commissioner 's Province on 23rd January, 1950.
The four villages (called enclaves) were taken out of this Province on 25th January, 1950, and absorbed into the United Provinces (now Uttar Pradesh) by an Order of the Governor General under the provisions of the Government of India Act, 1935.
The grant of the four villages made in favour of the petitioners in January, 1948, was revoked in August, 1952, by the Government of Uttar Pradesh in consultation with the Government of India, the operative part of the revocation order being made by the Governor of Uttar Pradesh.
Held (i) that the petitioners were entitled to a writ under article 32(2) of the Constitution inasmuch as the order revoking the grant of Jagirs and Muafis in the four villages violated article 31(1) and article 19(f) of the Constitution.
(ii) No State Government has the right to do anything in the nature of an act of State.
(iii) The accessions by the Rulers of States and their acceptance by the Dominion of India were acts of State and no Municipal Court could question their competency.
Article 363 and the proviso to article 131 of the Constitution bars the jurisdiction of Courts in India after the Constitutional to settle any dispute arising out of the accessions and their acceptance.
All that the Courts can do is to register the factum of such accessions.
(iv)The properties in question were properties over which the Rulers had absolute right of disposition at the date of the grants.
The grants were absolute in character and would under any civilised system of law pass an absolute and indefeasible title to the grantees.
Assuming (but not deciding) that they were defeasible at the were will of the sovereign the fact remained that 417 they were neither resumed by the Former Rulers nor confiscated by the Dominion of India as an act of State and up to the 26th of January, 1950, the right and title of the petitioners to continue in possession was good.
The Constitution by reason of the authority derived from and conferred by the people of India destroyed all vestiges of arbitrary and despotic power in the territories of India and over its citizens and lands and prohibited just such acts of arbitrary power as the State in the present case was seeking to uphold.
The Dominion of India and all those who were invited there sat in the Constituent Assembly not as conquerors and conquered, not as those who ceded and as those who absorbed but as the sovereign peoples of India, free democratic equals.
Every vestige of sovereignty was abandoned by the Dominion of India and the States and surrendered to the peoples of the land who framed the new Constitution of India.
(v) Under article 5 of the Constitution all the residents of the then Indian States including the Rulers and people of Sarila and Charkhari, viz., those who made the grants and those who received them and those who were seeking to make the confiscation as an act of State, became citizens of India.
(vi) No sovereign can exercise an act of State against its own subjects and an act of State can never be exercised against one who has always been a citizen from the beginning in territory which has from its inception belonged to the State seeking to exercise that right.
Case law reviewed.


judgement:
Appeals Nos. 314 to 322 of 1966 Appeals by special leave from the judgment and order dated April 25, 1963 of the Allahabad High Court in Special Appeals Nos. 662, 663, 679, 664, 665, 667, 666, 669 and 671 of 1962 respectively.
S.K. Aiyer and R.N. Sachthey, for the appellant (in all the appeals. ) J.P. Goyal, Sobhag Mal Jain and P.N. Pachauri, for the respondents (in all the appeals ).
The Judgment of the Court was delivered by Ramaswami, J.
In these appeals which have been heard together a common question of law arises for determination, that is, whether the. expression "any person who has not hitherto been assessed" in section 18A(3) of the Income Tax Act, 1922 (hereinafter called the Act) after the Income Tax Amendment Act (Act 67 of 1949) should be interpreted so as to include a person who has only been provisionally assessed under section 23B of that Act.
The respondents in these appeals are four persons Mani Ram, Jagmohan, Kishandas, Bhagirathmal partners of Shri 726 Kishan Das, DhankUtti, Kanpur.
They were members of a joint Hindu farmily carrying on business until they became divided in the middle of assessment year 1953 54.
Thereafter they were carrying on the business in partnership.
For the year 1953 54, the firm submitted a return showing loss.
But in the next succeeding year 1954 55 it disclosed a profit and submitted a return.
All the four partners filed returns individually on 27 9 1954 and they were provisionally assessed on their returns on 14 10 1954.
But the regular assessment was made for this year only on 27 2 1958.
The ,firm continued to make profits in the subsequent years 1955 56, 1956 57, 1957 58 and 1958 59 and the partners filed returns for their income for each of these years and were regularly assessed for these years under section 23 sometime after 27 2 1958.
The assessment order for 1958 59 was in fact made on 19 2 1959.
It is not disputed that none of the four partners sent any estimate of the tax payable on their income as required by section 18A of the Income Tax Act, 1922 or pay the tax in advance.
Therefore, the Income Tax Officer, Kanpur while assessing them under section 23 of the Act held that they were liable to pay interest under section 18A(8) and determined the amount payable by each in respect of each of the years on the basis of the income found taxable in the regular assessment.
In addition, he applied the provisions of section 18A(9)(b) and imposed a penalty for each year of assessment by virtue of section 28 read with section 18A(9) (b) of the Act.
The four partners preferred appeals to the Appellate Assistant Commissioner on the ground that the levy of interest and penalty was unauthorised.
But the appeals were dismissed.
The partners applied in revision to the Commissioner of Income Tax under section 33A(2), but the revision applications were dismissed.
The respondents thereafter moved the Allahabad High Court for grant of a writ to quash the orders of the Income Tax Officer and of the Appellate Assistant Commissioner in appeal.
The applications for writ were allowed by Mr. Justice S.C. Manchanda who held that section 18A(3) could not apply to the facts of the case as there had been a provisional assessment under section 23B in the year 1954.
Against the decision of the Single Judge the appellants preferred appeals before the Division Bench.
These appeals were dismissed by a common judgment of the Allahabad High Court dated 25th March, 1963.
The present appeals are brought to this Court by special leave from the judgment of the Allahabad High Court dated 25th March, 1963 in the batch of appeals affirming the judgment of the Single Judge dated 25th May, 1956 in C.W.M. No. 1591 of.
1962 and the connected writ applications.
It is necessary at this stage to set out the provisions of seetions 18A, 23 and 23B of the Income Tax Act, 1922 as they stood at the material time: 727 "18A (1) (a).
In the case of income in respect of which provision is not made under section 18 for deduction of income tax at the time of payment, the Income Tax Officer may, on or after the 1st day of April in any financial year, by order in writing, require an assessee to pay quarterly to the credit of the Central Government on the 15th day of June, 15th day of September, 15th day of December and 15th day of March in that year, respectively, an amount equal to onequarter of the income tax and super tax payable on so much of such income as is included in his total income of the latest previous year in respect of which he has been assessed, if that total income exceeded the maximum amount not chargeable to tax in his case by two thousand five hundred rupees.
Such income tax and super tax shall be calculated at the rates in force for the financial year in which he is required to pay the tax, and shall bear to the total amount of income tax and super tax so calculated on the said total income the same preparation as the amount of such inclusions bears to his total income or, in cases where under the provisions of sub section (1) of section 17 both income tax and super tax are chargeable with reference to the total world income, shall bear to the total amount of income.
tax and super tax which would have been payable on his total world income of the said previous year had it been.his total income the same proportion as the amount of such inclusions bears to his total world income.
(2) (3) Any person who has not hitherto been assessed shall, before the 15th day of March in each financial year, if his total income of the period which could be the previous year for an assessment for the.
financial.
year next following is likely to exceed the maximum amount not chargeable to tax in his case by two thousand five hundred rupees, send to the Income Tax Officer an estimate of the tax payable by him on.
that part of his income to which the provisions of section 18 do not apply of the said previous year calculated in the manner laid down in sub section (1), and shall pay the amount, on such of the dates specified in that subsections as have not expired, by installments which may be revised according to the proviso to sub section (2).
(4) (5) Sup.
C.I/68 16 728 (6) Where in any year an assessee has paid tax under sub section (2) or sub section (3) on the basis his own estimate, and the tax so paid is less than eighty per cent of the tax determined on the basis of the regular assessment, so far as such tax relates to income to which the provisions of section 18 do., not apply and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made, simple interest at the rate of Six per cent per annum from the 1 st day of January in the financial year in which the tax was paid up to the date of the Said regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short of the said eighty per cent.
(7) (8) Where on making the regular assessment, the Income Tax Officer finds that no payment of tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub section (6) shall be added to the tax as determined on the basis of the regular assessment.
(9 ) If the Income Tax Officer, in the course of any proceedings in connection with the regular assessment, is satisfied that any assessee (a) has furnished under sub section (2) of subsection (3 ) estimates, of the tax payable by him which he knew or had reason to believe to be untrue, or (b) has without reasonable cause failed to comply with the provisions.
of sub section (3), the assessee shall be deemed, in the case referred to in clause (a), to have deliberately furnished inaccurate particulars of his income, and in the case referred to in clause (b) to have failed to furnish the return of his total income; and the provisions of section 28, so far as may ;be, shall apply accordingly.
(1) If the Income Tax Officer is satisfied without requiring the presence of the assessee or the production by him of any evidence that a return made under section 22 is correct and complete, he shall assess the total income of the assessee, and shall determine the sum payable by him on.
the basis of such return.
729 (2) If the Income Tax Officer is not satisfied without requiring the presence of the person who made the return or the production of evidence that a return made under section 22 is correct and complete, he shall serve on such person a notice either to attend at the Income Tax Officer 's Office or to produce, or to cause to be there produced, any evidence on which such person may rely in support of the return. (3 ) On the day specified in the notice issued under sub section (2), or as soon afterwards as may be, the Income Tax Officer, after hearing such evidence as such person 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 of the assessee and determine the sum payable by him on the basis of such assessment.
(4) If any person fails to make the return required by any notice given under sub section (2) of section 22 and has not made a return or a revised return under sub section (3) of the same section or fails to comply with all the terms of a notice iSsued under sub section (4) of the same section or, having made a return, fails to comply with all the terms of a notice issued under sub section (2) of this section, the Income Tax Officer shall make the assessment to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment and, in the case of a firm, may refuse to register it or may cancel its registration if it is already registered.
23B (1 ) The Income Tax Officer may, at any time after the receipt of a return made under section 22 proceed to make in a summary manner, a provisional assessment of the tax payable by the assessee, on the basis of his return and the accounts and documents, if any, accompanying it, after giving due effect to (i) the allowance referred to in paragraph (b) of the proviso to clause (vi) of sub section (2) of section 10, and (ii) any loss carried forward under sub section (2) of section 24.
(2) A partner of a firm may be provisionally assessed under sub section ( 1 ) in respect of his share in the firm 's income, profits and gains; if its return has been received, although the return of the parroter himself may not have been received, 730 (3) A firm may be provisionally assessed under sub section (1) as if it were an unregistered firm, unless the firm fulfils such conditions as the Central Government may, by notification in the official Gazette, specify in that behalf.
(4) There shall be no right of appeal against a provisional assessment made under sub section (1).
(5) For the avoidance of doubt, it is hereby declared that the provisions of section 45 (except the first proviso) and section 46 apply in relation to any tax payable in pursuance of a provisional assessment made under sub section (1) as if it were a regular assessment made under section 23.
(6) Income tax paid or deemed to have been paid under section 18 or section 18A in respect of any income provisionally assessed under sub section (1), shall be deemed to have been paid towards the provisional assessment.
(7) After a regular assessment has been made under section 23, any amount paid or deemed to have been paid towards a provisional assessment made under sub section (1), shall be deemed to have been paid towards the regular assessment; and where the amount paid or deemed to have been paid towards the provisional assessment, exceeds the amount payable under the regular assessment, the excess shall be refunded to the assessee.
( 8 ) Nothing done or deferred by reason or in consequence of any provisional assessment made under this section shall prejudice the determination on the merits, of any issue which may arise in the course of the regular assessment under section 23".
It was argued on behalf of the appellants that a mere provisional assessment under section 23B of the Act will not satisfy the requirements of section 18A(1) of the Act because the language of section 18A(1) shows that the provisions of that subsection only apply when the amount of tax to be deposited in advance is determined on the basis of the assessee 's total income of previous year to which he has been assessed.
It was contended that in the case of a provisional assessment under section 23B of the Act, there is no computation of the total income of the previous year and that under section 23B of the Act all that is done is to determine provisionally the income tax payable on the 731 basis of the return filed without properly going through the process of assessing the total taxable income.
It is not possible to accept this argument because even when the tax is provisionally assessed, there necessarily has to be a determination of the total income of the assessee.
The only difference is that under section 23 the total income is determined after the Income Tax Officer has satisfied himself fully about the correctness of the return flied by taking steps, if necessary, under sections 22(4) and 23(2) of the Act.
In the case of a provisional assessment under section 23B of the Act, the powers under sections 22(4) and 23(2) of the Act are not to be exercised and the Income Tax Officer has to determine the tax on the basis of the return filed by the assessee after taking into consideration the accounts and documents available, if any, and after giving effect to certain allowances and losses.
In other words, what the Income Tax Officer has to do is to assess provisionally the total income of the assessee and thereafter he has to determine the tax payable on the basis of that provisionally assessed income.
The argument was next stressed that section 18A(1) was introduced into the Act when section 23B did not exist at all and consequently no inference should be drawn that the word "assessed" used in section 18A(1) was meant to cover a provisional ' assessment under section 23B of the Act also.
In other words, the argument of the appellants was that when the word "assessed" was used in section 18A(1) of the Act Parliament could not have contemplated that this word would cover a case of provisional assessment as no section relating to provisional assessment existed in the Act at that time.
We are unable to accept this argument as correct.
It should be noticed that the Parliament introduced certain amendments in section 18A of the Act consequential to the introduction of section 23B of the Act.
There is a reference to the provisional assessment made under section 23B in sub section (5) of section 18A, but Parliament took no step to restrict the meaning of the word "assessed" in.
section 18A(3) so as to exclude a reference to provisional assessment under section 23B of the Act.
If Parliament contemplated that section 18A(3) should apply only in the case of a "regular assessment", there was no reason why it did not put 'some qualifying words or expressions before or after the word ,"assessed" in section 18A( 1 ).
It is not possible to accept the submission of the appellants that Parliament in fact intended to bring about such a decision but only accidentally omitted to do so.
On the other hand, the language of section 18A( 1 ) as it stands, can only lead to interpretation that the provisions contained in it Would become applicable whenever a person has been assessed whatever be the nature of the assessment whether it be a regular assessment or a provisional assessment.
732 It is important to notice that in section 18A ( 1 ) the expression "assessed" is used without any qualification or restriction as to whether the assessment should be a regular assessment or any other type of assessment under the Act.
It is also manifest that in section 18A sub section (5) the two expressions "provisional assessment" and "regular assessment" are expressly mentioned.
The expression "regular assessment" is also repeatedly used in section 18A, sub section 6, 7, 8 and 9.
We see, therefore, no warrant for restricting the meaning of the word "assessed" in section 18A(1) so as to include only a "regular assessment" under section 23 of the Act.
There is no reason why Parliament did not add the word "regularly" in the sub section so as to qualify the word "assessed".
Since there is no such qualification.
the word "assessed" in section 18A(3) should be read in its ordinary sense as including every kind of assessment including a provisional assessment under section 23B of the Act.
In the last place, counsel on behalf of the appellants referred to the language of sections 210 and 212(3) of the Income Tax Act, 1961 which state: "210.
Order by Income Tax Officer : (1) Where a person has been previously assessed by way of regular assessment under this Act or under the Indian Income Tax Act, 1922 ( 11 of 1922 ), the Income Tax Officer may, on or after the 1st day of April in the financial year, by order in writing, require him to pay to the credit of the Central Government advance tax determined in accordance with the provisions of sections 207, 208 and 209.
(2) The notice of demand issued under section 156 in pursuance of such order shall specify the installments in which the advance tax is payable under section 211.
(3) If, after the making of an order by the Income Tax Officer under this section and before the 15th day of.
February.
of the Financial year tax is paid by the assessee under section 140 A or a regular assessment or a provisional assessment under section 141 of the assessee or of the registered firm of which he is a partner is made in respect of a previous year later than that referred to in the order of the Income Tax Officer, the Income Tax Officer may make an amended order queering the assessee to pay in one installment on the specified date.
or in equal instalments on the specified dates.
if more than one, falling after the date of the amended order, the advance tax computed on the basis 733 of the total income on which tax has been paid under section 140 A or in respect of which the regular assessment or, the provisional assessment aforesaid has been made as reduced by the amount, if any, paid in accordance with the original order 213.
Estimate by assessee, ( 1 ) . . (3 ) Any person who has not previously been assessed by way of regular assessment under this Act or under the Indian Income Tax Act, 1922 (11 of 1922) shall, before the first day of March in each financial your, if his total income exclusive of capital gains of the period which would be the previous year for the immediately following assessment year is likely to exceed the maximum amount not chargeable to income tax in his case by two thousand five hundred rupees, send to the Income Tax Officer (i) an estimate of the total income exclusive of capital gains of the said previous year; (ii) an estimate of the advance tax payable by him calculated in the manner laid down in section 209: and shall pay such amount as accords with his estimate, on such of the dates specified in section 211 as have not expired, by instalments which may be revised according to sub section (2)".
The argument was that these sections apply to a case of a regular assessment and the enactment of these sections should be ' treated as a Parliamentary exposition of section 18A(3) of the earlier Act as referring only to a case of regular assessment.
We are unable to accept this argument as correct.
There is nothing in 1961 Act to suggest that Parliament intended to explain the meaning or clear up doubts about the meaning of the word "assessed" in section 18A(3) of the earlier Act.
Generally speaking, a subsequent Act of Parliament affords no useful guide to the meaning of another Act which came into existence before the later one was ever framed.
Under special circumstances, the law does however admit of a subsequent Act to be resorted to for this purpose but the conditions under which the later Act may be resorted for the interpretation of the earlier Act are strict; both must be laws on the same subject and the part of the earlier Act which it is sought to construe must be ambiguous and capable of different meanings.
For example, in Kirkness (Inspector of Taxes) vs John Hudson & Co. Ltd.(1) it was held by the (1) 734 House of Lords that the ordinary meaning of the word "sale" importing a consensual relation is to be attributed to the use of it in the context of section 17(1)(a) of the Act of 1945.
Since there was no ambiguity in the section, it was not permissible to seek guidance in its construction from later Finance Acts, although it was directed by Parliament to be construed as one with them.
At page 714 of the Report Viscount Simonds states: "I have looked at the later Acts to which the Attorney General referred to in order to satisfy myself that they do not contain a restrospective declaration as to the meaning of the earlier Act.
They clearly do not, and I do not think that it has been contended that they do.
At the highest it can be said that they may proceed upon an erroneous assumption that the word "sold" in section 17(1)(a) of the Income Tax Act, 1945, has a meaning which I hold it has not.
This may be so and, if so, it is an excellent example of the proposition to which reference was made in the report of the Committee of the Privy Council in In re MacManasway(1) and again by my noble and learned friend Lord Radcliffe in Inland Revenue Commissioners vs Dowdall, O 'Mahoney & Co. Ltd. (2) that the beliefs or assumptions of those who frame Acts of Parliament cannot make the law".
For the reasons expressed above, we hold that the judgment of the High Court dated 25th March, 1963 is right and these appeals must be dismissed with costs.
One set of hearing fee.
Y.P. Appeals dismissed.

dataset_name: IN-Abs

summary:
The respondents flied returns for the year 1953 54 and they were provisionally assessed on 14 10 1954, and regular assessment was.
made on 27 2 58.
For the next four succeeding years the respondents filed returns, and for all the years the regular assessments under section 23 of the Income Tax Act, 1922 were made after 27 2 58.
SinCe no estimate of the tax payable on their income as required by section 18A was seat nor the in advance paid, the Income Tax Officer while assessing them under section 23 held that they were liable to pay interest under section 18A(8) and in addition he applied the provisions of section 18A(9)(b) and imposed a penalty for each year of assessment by virtue of section 28 read with section 18A(9)(b).
The respondents preferred appeals to the Appellate Assistant Commissioner on the ground that the levy of interest and penalty 'was unauthorised.
The appeals were dismissed, and the respondents went :in revision, which was also dismissed.
Thereupon, the respondents filed writ petitions in the High Court to quash the order and succeeded.
The High Court held that section 18(3) of the Act did not apply to the facts of the case as there had been a provisional assessment under section 23B of the Act in 1954.
In appeals to this Court, by the Revenue the question for consideration was whether the expression "any person who has not hitherto been assessed" in section 18A(3) of the Indian Income Tax Act, 1922 after the all Income Tax Amendment Act 67 of 1949 should be interpreted so as to 'include a person who has only been provisionally assessed under section 23B ,of that Act.
HELD : The appeals must be dismissed.
Even when the tax is provisionally assessed, there necessarily has to be a determination of the total income of the assessee.
The only difference is that under section 23 the total income is determined after the Income Tax Officer has satisfied himself fully about the correctness of the return fled by taking steps, if necessary, under sections 22(4) and 23(2) of the Act.
In the case of a provisional assessment under section 23B. of the Act, the powers under sections 22(4) and 23(2) of the Act are not to be exercised and the Income Tax Officer has to determine the tax on the basis of the return filed by the assessee after taking into consideration the accounts and documents available, if any, and after giving effect to certain allowances and losses.
In other words, what the Income Tax Officer has to do is to assess provisionally the total income of the assessee and thereafter he has to determine the tax payable on the basis of that provisionally assessed income.
[731 A D] It is important to notice that in section 18A(1) the expression "assessed" is used without any qualification or restriction as to whether the assessment should be a regular assessment or any other type of assessment 725 under the Act.
It is also manifest that in section 18A sub section (5) the two expressions "provisional assessment" and "regular assessment" are expressly mentioned.
The expression "regular assessment" is also repeatedly used in section 18A, sub.
section 6, 7, 8 and 9.
There is therefore, no warrant for restricting the meaning of the word "assessed" in section 18A(1) so as to include only a "regular assessment" under section 23 of the Act.
There is no reason why Parliament did not add the word "regularly" in the sub section so as to qualify the word "assessed".
Since there is no such qualification, the word "assessed" in section 18A(3) should be read in its ordinary sense as including every kind of assessment including a provisional assessment under section 23B of the Act.
[732 A C] There is nothing in the 1961 Act to suggest that Parliament intended to explain the meaning or clear up doubts about the meaning of the word "assessee" in section 18A(3) of the earlier Act.
Generally speaking a subsequent Act of Parliament affords no useful guide to the meaning of another Act which came into existence.
before the later one was ever framed.
Under special circumstances, the law does however admit of a subsequent Act to be resorted to for this purpose but the conditions under which the later Act may be resorted for the interpretation of the earlier Act are strict; both must be laws on the same subject and the part of the earlier Act which it is sought to construe must be ambiguous and capable of different meanings.
[733 F H] Kirkness (Inspector of Taxes) vs John Hudson & Co. Ltd., ; In re MacManasway, and Inland Revenue Commissioners vs Dowdall, O 'Mahonay & Co. Ltd., , referred to.