judgement:
minal Appeal No. 245 of 1969.
Appeal by special leave from the judgment and order dated July 17, 1969 of the Mysore High Court in Criminal Appeal No. 111 of 1968 and Criminal Referred Case No. 2 of 1968.
K. M. K. Nair, for the appellant.
section section Javali and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by Dua, J.
The appellant was convicted by the Sessions Judge, Shimoga, under section 302, I.P.C. for the murder of one Govindappa, a village postman and was awarded capital sentence.
He was also held guilty of an offence under section 201, I.P.C. and sentenced to rigorous imprisonment for 7 years.
The High Court of Mysore confirmed the conviction and sentence under section 302, I.P.C. It also upheld his conviction under section 201, I.P.C. but set aside the sentence on this count observing that when a person is convicted both under section 302 and section 201, I.P.C. it is undesirable to pass separate sentence for both offences.
In this appeal with, special leave the appellant challenges his conviction and sentence under section 302, I.P.C. The appellant was tried, along with Laxmamma (accused No. 2) wife of the deceased Govindappa and her mother Gangamma (accused No. 3) wife of late Mylappa.
The two women were charged with abetment of murder and were acquitted by the trial court.
We are not concerned with them in this appeal.
There is no eye witness in the case and the courts below have accepted the prosecution story on circumstantial evidence.
The question before us is whether the circumstantial evidence accepted by the courts below establishes the murder of the deceased by the appellant beyond reasonable doubt.
The prosecution story may now be stated.
The deceased, Govindappa resident of Kommanal village in Shimoga Taluk worked as Extra Departmental Delivery Agent in the postal department.
He was attached to the post 217 office at Kommanal and was in common parlance called a postman.
G. Sangaiah (P.W. 1) resident of village Abbalagere worked as an Assistant School Teacher in Kommanal.
The distance between the two villages is 1 3/4 miles.
P.W. 1 also worked as Branch Postmaster in Kommanal, and was called Extra Departmental Postmaster.
According to him the duties of the deceased were to bring the postal bags from the M.M.S. Bus on the main road in the morning at about 8.30 a.m. and after the bags were opened by P.W. 1 to deliver the postal articles to their respective addressees.
At about 4.30 p.m. he would return to the post office to take the postal bags to the Mail Service Bus.
Six villages were, attached to this post office.
The deceased used to deliver postal articles in two groups of three villages each on alternate days.
On July 21, 1967 at about 10 a.m. the deceased received the postal articles from P.W. 1 for, delivering them to the addressees in, villages Kittadal, Kunchenhalli and Bikkonahalli.
The articles to be delivered included two registered letters addressed to Krishna Naika and Halanaika of Kittadal.
At about 3.30 p.m. the deceased returned and told P.W. 1 that the addressees, having gone to their fields, were not in the village, and that he would again try to deliver the. registered articles to them.
The deceased took the postal bags from the post office for delivery to the Mail bus.
He did not return to duty thereafter.
As the deceased had been in the service of the post office for nearly 32 years, P.W. 1 did not suspect his bona fides.
On July 22, 1967 P.W. I went to the house of the deceased but did not find him there.
Thinking that the deceased might have been unavoidably held up somewhere P.W. 1 in addition to his own duties performed those of the deceased as well on that day.
On July 23, P.W. 1 went to village KittadaJ to inquire about the delivery of the registered articles to the addressees.
There he learnt from Krishna Naika (P.W. 15) that on July 21, 1967 the deceased had delivered to him.
the registered article at about 6 p.m. P.W. 15 on being questioned by the court gave the time of delivery to be about 4 p.m.
But this differences as to time, in the opinion of the trial court, was due to the fact that the witness had no precise idea of time.
After having waited for another day on July 24, 1967 P.W. I reported to the Postal Inspector, Shimoga Circle about the disappearance of the deceased exhibit P 1 is this report.
P.W. I informed the Postal Inspector of the steps taken by him in his search for the deceased.
Those steps included the inquiries made by him from the addressees of the registered letters which had been delivered by the deceased.
P.W. I had looked at those registered letters and left instructions for their production when required.
It was further reported that the receipts L11 Sup.
CI 15 218 pertaining to the delivery of RL No. 456/Udipi, and RL No. 825/Udipi and the visit book had not been returned by the deceased to the post office.
A request was made by P.W. 1 for the appointment of someone in place of the deceased so that the registered articles received on the 24th and 25th July, 1967 be ,delivered to their respective addressees.
The Postal Inspector was asked to visit Kommanal for making the necessary arrangements.
This report reached the Inspector (S.W. Pawar, P.W. 2) on July 26, 1967 and he visited Kommanal on July 27, 1967.
There he collected four Panchayatdars and examined Laxmamma, the wife of the deceased.
The same day he submitted his report, exhibit P 3, to the Sub Inspector of ' Police, Kasaba Police Station, Shimoga, attaching with it a copy of the report of P.W. 1, and also a copy of the statement of LaxmaMma.
in this report all the relevant facts were stated.
The important thing to be noted about this report is that according to it the deceased had two keys of letters boxes fixed at Kunchenhalli and Somanakoppa.
The duplicate keys of these locks were, however, available with P.W. 1.
This report was sent because, according to P.W. 2, neither the wife of the deceased nor anyone else from the village had reported to the police about the disappearance of the de ceased While investigation into the fact of disappearance of the deceased pursuant to this report was going on, it appears that Bheema Naika, (P.W. 3), resident of Kommanal while grazing his cattle near Ayanoor forest sensed some foul smell from a spot near 'Korakalu '.
On going closer, he saw, what appeared to him to be, a human skeleton with Khakhi half pants, khakhi shirt and belt and a pair of chappals.
He got frightened and reported to the village patel about what he had seen.
As it was late in the evening the patel did not go to the spot that day.
The following morning, August 4, 1967, P.W. 3 took the pate (Shankargowda, P.W. 12) and some others to the spot and showed them what he had seen.
The pate then reported the matter to the Sub Inspector of Police, Shimoga Taluk (exhibit P 11) Investigation then appears to have started for establishing the identity of the dead body, the cause of his death and, if his death was considered to be homicidal, who was the offender.
As a result of the investigation the three accused persons, as observed earlier, were sent up for trial.
The three questions requiring consideration by us relate to the identity of the dead body represented to be of the deceased, the cause of the death and whether the appellant has committed the murder.
In so far as the question of identity is concerned, there can hardly be any doubt that the skeleton was that of the deceased.
The Khakhi shirt, exhibit M.O. 1 and the half pant exhibit M.O. 2 have 219 been identified by P.W. 1 as the uniform given to the deceased. ' The visit book (exhibit M.O. 5) is also proved by P.W. 1 to have been delivered to the deceased The two postal acknowledgments entrusted to the deceased with the registered articles (exhibit M.O. 6) and the two duplicate keys (Exs. MO 3) of the locks of the post boxes at Kunchenhalli and Somanakoppa have also been identified and proved by P.W. 1.
All these articles were recovered from near the dead body.
This evidence leaves little doubt that the skeleton was of the deceased.
Some doubt was sought to be created on the question whether the bones found at the spot were those of a human body.
But on this point the testimony of Dr. Shambulingaswami, Assistant Surgeon, Mccann Hospital, Shimoga (P.W. 26) is clear and it establishes beyond doubt that the bones found were those of a human being.
For the present we are leaving out of consideration the evidence of Ganga (P.W. 4) and the oral confession made by the appellant to this witness.
We will deal with that witness a little later Turning to the question whether the deceased died a natural death or his death was homicidal, Dr. Ramu, Associate Professor of Forensic Medicine , Bangalore Medical College, was required to examine this question and the skeleton concerned was forwarded to him.
His report (exhibit P 20) records.
the following opinion "I am of opinion that (a) all the bones sent are of ' human origin and appear to belong to the same individual; (b) the bones belong to a male; (c) the age of the person is between 25 35 years; (d) the height of the person is about 5 feet 6 inches one inch; (e) the cause of death is due to external violence; (f) the time since death is about 4 8 weeks from the date of examination.
" This report is dated August 30, 1967.
When Dr. Ramu appeared as a witness he was cross examined by the counsel for the, appellant.
A suggestion was thrown that, the dead body might have been bitten by wild animals.
This suggestion was denied by the witness who replied that the gnawing by the wild animals would result in irregular surface which was not the case in respect of the bones sent to him.
The witness also refuted the suggestion that the base of the skull in question could have been fractured by a violent fall.
The fracture of bones caused by wild animals trampling on them was also stated by the witness to be different in 220 nature from the fractures which were found in the present case.
The doctor was clearly of opinion that the injuries caused to the bones sent to him for examination were ante mortem and not postmortem.
On being questioned by the court the doctor replied that at least two blows must have been given to the deceased, one on the nape of the neck and the other on the left cheek.
He further stated that the spinal cord must have been cut and completely severed because the two pieces M.O. 18 and M.O. 18 (a) were completely severed and this result could not have come about without the spinal cord being cut.
The injury on the base of the skull, he continued, must have been the result of a very hard blow and this was by itself sufficient in the ordinary course of nature to cause death.
The man whose bones were sent to him, must, according to the doctor, have been brutally attacked with a sharp cutting instrument.
This evidence, in our opinion, convincingly establishes that the deceased was the victim of grievous assault as a result of which he died and the courts below were quite right in so concluding.
We now come to the question whether it, was the appellant who committed the murder.
It is in evidence that the deceased was last seen in the company of the appellant at about 4.30 p.m. when the deceased had gone to deliver the mail bags to the bus.
At about 3.30 p.m., according to P.W. 1, the deceased had gone to the post office and taken the postal bags to be delivered to the Mail Bus, M.M.S. Bus Service.
He had also told the witness that he would again try to contact Krishna Naika and Halla Naika of Kittadal for delivering the registered articles.
Chennabasappa (P.W. 16) has also deposed that he saw Govindappa and the appellant delivering the mail bags to the bus after they had taken coffee in the hotel near the bus stop that evening.
P.W. 9, the brother of the appellant who was also at the bus stop that evening saw the deceased and the appellant travelling in the same bus.
Gangamma (P.W. 8), the wife of the brother of the deceased who lives in a portion of the same house in which the deceased lived.
has stated that she saw the deceased on Friday evening at about 4.30 p.m. with the appellant going from their house towards the post office building.
The appellant was at that time carrying an axe on his shoulder.
The demeanor of this witness was described by the trial court as natural.
Sulochana, an eleven year old daughter of the deceased, appeared as P.W. 10 and stated that on Friday, the day her father disappeared, at about 4.30 p.m. he left the house to deliver the mail bags.
At about 5 p.m. the appellant took an axe from her mother and proceeded towards the 'Post office.
At about 8 p.m. the appellant returned home.
According to this witness four or five days earlier, the appellant had suggested to the deceased to accompany him to the forest area for bringing 221 teak logs so as to be able to make some money.
People of village Haramghatta required teak logs and the deceased, according to the suggestion, could earn at least Rs. 151.
The deceased first expressed his inability to spare time from his official duties but the suggestion, could earn at least Rs. 151 .
The deceased first expresed his inability to spare time from his official duties but the suggestion having been repeated the deceased ultimately agreed.
This witness, though being only 1 1 years old was not administered oath, created a favourable impression on the trial court as is obvious from the following note "The witness gave her evidence without faltering or visible signs of hesitancy.
She speaks clearly, precisely and straight to the question.
" The trial court also interrupted the witness in the middle of her testimony, in order to satisfy itself, by breaking the continuity of the story, that she was not reproducing a tutored version.
On going through her statement we are satisfied that she is a truthful witness and her evidence deserves to be accepted and was rightly accepted by the courts below.
There is in our opinion, cogent and trustworthy evidence.
to support the conclusion of the courts below that the deceased was last seen with the appellant a short time before his disappearance.
Having upheld this conclusion, we may appropriately examine the appellant 's explanation.
He has merely denied, by expressing his ignorance, that the deceased had been last seen alive with him.
In fact he has simply described as false all the material allegations including that of his acquaintance with Laxmamma and that he used to stay in Kommanal.
This bare denial without any explanation is not wholly unimportant.
This takes us to the motive for the appellant to get rid of the deceased.
There can be little doubt on the evidence on the record that the appellant had developed close intimacy with the wife of the deceased.
The evidence of Gangamma (P.W. 8), wife of the brother of the deceased who, it may recalled, lives in one portion of the ancestral house owned by the two brothers, is quite clear on the point.
Laxmamma, the wife of the deceased, used to run her shop in the other half of the same house.
P.W. 8 was, therefore, in a position to know about the appellant 's frequent visits to that shop.
According to her the appellant sometimes used to take his food in Laxmamma 's house and also to sleep there.
This was due to their intimacy.
Though many customers used to come to that shop no one ever stayed on in the house except the appellant.
P.W. 8 has also deposed that the deceased and his wife used to quarrel with each other and the deceased used to 222 protest against her feeding the appellant and neglecting him in the matter of food.
To this Laxamma used to report that the deceased did not provide her with enough money for that purpose whereas the appellant did.
The suggestion that her husband and the deceased had quarrelled over partition of a field was repudiated by her.
The trial court was favourably impressed by the demeanor of this witness as well.
P.W. 9, the brother of the deceased, has also stated about the quarrels between the deceased and his wife.
He has deposed : "My brother and his wife A2 were often quarreling bitterly.
That was after Ugadi of last year.
lie used to complain to his wife that she was not cooking food at the proper time.
A2 in turn used to reply that he was not supplying her with provision and therefore he could not expect her to cook food in time.
He sometimes used to thrash A2.
She would weep and sleep away.
When my brother used to go away without food, I used to invite him to take his food.
Sometimes he used to take his food in my house.
After the last Ugadi, Thimma (A1) 's visit and stay in my brother 's house increased.
Al and A2 used to go together for work.
They used to go to Nyamathi Shandy to fetch goods.
Al used to carry the goods back to Komminal from Nyamathi.
Two days prior to the disappearance of my brother there was a bitter quarrel between A2 and himself.
During that quarrel, Govindappa questioned A2 how Al remained under his roof and that she fed him and that by the time he returned, there was nothing left for him.
A2 replied that he earns and supplied the provi sions and therefore she was feeding him whereas he (Govindappa) did not supply the provisions and consequently she did not look after him.
The quarrel resulted in severe beating of A2 by my brother.
A2 never served him food.
" From this evidence the motive on the part of the appellant to do away with the deceased is obvious.
We now turn to the extra judicial confessions of the appellant and his conduct on the day following the disappearance of the deceased.
Ganga (P.W. 4) is a nephew of the appellant, being the son of his elder brother.
The appellant, according to this witneSS, had taken up a contract of uprooting plants and trees so as to render the land cultivable.
This witness used to visit Laxmamma 's shop when he was working at Kommanal and he 223 also knew the deceased.
On Saturday following the day when the deceased had disappeared, in the early hours of the morning a little before sunrise. the appellant went to the house of the witness in Bodekanna colony near Kommannal and woke him up.
As the witness began to tether his bullocks the appellant went to, his father 's house nearby.
After, a short while the appellant returned and told the witness that the previous evening he had gone to the field of one Mahadevappa and had lost his purse containing Rs. 200/ .
The appellant desired the witness to accompany him to find the lost purse.
On their way through the forest by the side of the hill they met one Sivappanavar Basappa (P.W. 13) on whose enquiry as to what had brought them there so early, the appellant replied that he had some work in the fallow land of Mahadevappa .
On reaching the 'Korakalu ' which was about 2 1/2 ft.
deep, the witness saw the dead body of Govindappa.
The dead body was lying flat on its back and the witness observed injuries on the neck, face and chest of the deceased.
He also saw near the dead body Khakhi shirt (M.O. 1), Khakhi half pants (M.O. 2), a pair of chappals (M.O. 7), a plaster belt (M.O. 8) and banian (M.O. 10).
The appellant then pulled the red waist thread (M.O. 10) worn by the deceased and as he took it into his hands, a pair of small keys (M.O. 3 A) were noticed by the witness.
The appellant remarked that those were not the keys he wanted.
So saying he threw away the thread, the keys and a talisman (M.O. 11) which was also found there.
Directing the witness to keep a watch from a higher elevation the appellant cut some branches of the trees and after collecting some twigs covered the dead body with them.
After picking up some papers the appellant and the witness started on return journey.
After covering some distance the appellant threw away the papers in a bush.
The appellant told the witness that he had killed the deceased with the sickle (matchu) given by the wife of the deceased and that the same had been thrown away by him in a bush.
As they reached the main road the appellant warned the witness not to disclose to anyone what he had seen and learnt, otherwise he was threatened with the same fate as the deceased had met.
The trial court was not favourably impressed by the testimony of Ganga (P.W. 4) though it felt convinced that on the day following the disappearance of the deceased he had knowledge both of the commission of the offence and of the place where the dead body was lying.
That court did not rely _on his testimony in regard to the extra judicial confession because it was considered incredible.
The High Court on appeal disagreed with the trial court in its appreciation of the evidence of P.W. 4.
According to the High Court the evidence of P.W. 4 was corroborated by the evidence of P.W. 13 and P.W. 25.
The extra judicial confession was, 224 therefore, held to be admissible and trust Worthy.
Before us it was contended, that the extra judicial confession said to have "been made to P.W. 4 is inadmissible and in any event without corroboration in material particulars from independent source it is unsafe to act upon it.
It was emphasised that P.W. 4 was at one stage of the investigation suspected of complicity in this murder and, therefore, he should be treated no better than an accomplice.
In our opinion, this criticism is not justified.
An unambiguous confession, if admissible in evidence, and free from suspicion suggesting its falsity, is a valuable piece of evidence which possesses a high probative force because it emanates directly from the person committing the offence.
But in the process of proof of an alleged confession the court has to be satisfied that, it is voluntary, it does not appear to be the result of inducement, threat or promise as contemplated by section 24, Indian Evidence Act and the surrounding circumstances do not indicate that it is inspired by some improperly or collateral consideration suggesting that it may not be true.
For this purpose, the court must scrutinise all the relevant factors, such as, the person to whom the confession is made, the time and place of making it, the circumstances in which it is made and finally the actual words.
In the case in hand it is quite clear that P.W. 4 is not a person in authority.
There can thus be no question of any inducement, threat or promise rendering the confession irrelevant.
Nor has any cogent reason ' been suggested why the appellant should have made an untrue confession to P.W. 4 within 24 hours of the disappearance of the deceased.
On the other hand, the appellant appears to have been impelled by some inner urge to take the assistance of P.W. 4, his real nephew, to go to the place of occurrence to see as to what had happened to the dead body of his victim.
Such behaviour cannot be considered unnatural.
The confession appears to us to be free from any taint which would throw suspicion on its voluntary character and it has a ring of truth in it.
The fact that during the investigation P.W. 4 was suspected of being involved in the murder would also not cast any doubt on the voluntary character of the confession or on its true nature because it is the knowledge of P.W. 4 derived from this very confession which perhaps invited suspicion on him.
We do not consider this to be a cogent ground for holding that P.W. 4 had any motive to concoct the story of confession.
This confession is, therefore, admisible in evidence and being true, deserves to be acted upon.
The words used are quite clear and 'admit of no doubt of the appellant 's guilt.
And then though the evidence of P.W. 4 does not need any corroboration we find that corroboration in material particulars is forthcoming on the record.
The existence of the dead body and all the other articles at the place where they were later found and the evidence of Basappa (P.W. 13) which proves the visit of the 225 appellant and P.W. 4 to the spot on Saturday following the disappearance of the deceased furnish strong corroboration.
The High Court was thus quite right in relying on the extra judicial confession made to P.W. 4.
The confessions said to have been made to P.W. 31 and to Abdul Rahman (P.W. 22) stand on a different footing.
Both the courts below have not considered it safe to rely on these confessions and we do not find any sufficient reason for disagreeing with them.
Reliance on behalf of the prosecution was also placed on the information given by the appellant which led to the discovery of the dead body and other articles found at the spot.
It was contended that the information received from him related distinctly to the facts discovered and, therefore, the statement conveying the information was admissible in evidence under section 27 of the Indian 'Evidence Act.
This information, it was argued, also lends support to the appellant 's guilt.
It appears to us that when P.W. 4 was suspected of complicity in this offence he would in all probability have disclosed to the police the existence of the dead body and the other articles at the place where they were actually found.
Once a fact is discovered from other sources there can be no fresh discovery even if relevant information is extracted from the accused and courts have to be watchful against the ingenuity of the investigating officer in this respect so that the protection afforded by the wholesome provisions of sections 25 and 26 of the Indian Evi dence Act is not whittled down by mere manipulation of the record of case diary.
It would, in the circumstances, be somewhat unsafe to rely on this information for proving the appellant 's guilt.
We are accordingly disinclined to take into consideration this statement.
The trial court and the High Court have also been influenced by the fact that the appellant had absconded after September 1, 1967 when the police got suspicious of his complicity in this offence.
It is true that the appellant did make himself scarce with effect from September 1, 1967 till he was arrested on September 5, 1967 and this conduct is relevant under section 8 of.
the Indian Evidence Act and might well be indicative to some extent of guilty mind.
But this is not the only conclusion to which it must lead the court.
Even innocent persons may, when suspected of grave crimes, be tempted to, evade arrest: such is the instinct of self preservation in an average human being.
We are, therefore, not inclined to attach much significance to this conduct on the peculiar facts and circumstances of this case.
In this case the appellant being a pauper was provided with counsel at State expense in the trial court.
The entire prosecution case depends on circumstantial evidence and the dead body 226 was actually recovered in a decomposed state when it was not capable of identification.
In view of these peculiar features we undertook to examine the evidence ourselves, a course which this Court as a matter of settled practice, does not ordinarily adopt.
We are satisfied that the evidence on the record establishes the appellant 's guilt beyond reasonable doubt and the courts below were quite right in convicting him.
On the question of sentence also we do not find any cogent ground for interference.
This appeal fails and is dismissed.
Y.P. Appeal dismissed.

summary/full:
The appellant was convicted of the offence under section 302 I.P.C. Being a pauper he was defended by counsel at State expense.
The entire evidence was circumstantial and the dead body, when it was recovered, was in a, decomposed state and was incapable of identification.
Therefore, this Court, examined the evidence afresh, contrary to its settled practice and came to the conclusion that the evidence on record established the appellant 's guilt beyond all reasonable doubt.
With respect to three items of evidence, namely, (1) an extra judicial confession by the appellant to his nephew; (2) the 'recovery of the dead body as a result of the appellant 's statement; and (3) the conduct of the appellant in absconding immediately after the police suspected his complicity in the crime, HELD : (1) An unambiguous confession if admissible in evidence, and free from suspicion suggesting its falsity, is a valuable piece of evidence.
which possesses a high probative force because it emanates directly from the person committing the offence.
The Court, must however be satisfied that it is voluntary and was not the result of inducement, threat or promise as contemplated by section 24 of the Evidence Act and that the surrounding circumstances do not indicate that it was inspired by improper or collateral considerations.
For this purpose, the court must scrutinise all the relevant factors, such as the person to whom the confession is.
made, the time and place of making it, the circumstances in which it was made and finally, the actual words used.
[224 C] In the present case, the person to whom the extra judicial confession.
was made was not a person in authority and there was no question of any inducement, threat or promise.
Nor has any cogent reason been suggested as to why the appellant should have made an untrue confession within 24 hours of the disappearance of the deceased.
The appellant appears to have been impelled by some inner urge to take the assistance of his nephew to go to the place of occurrence and see what happened to the dead body, Such behaviours cannot be considered unnatural.
The confession is free from any taint which would throw suspicion on its voluntary character and it has a ring of truth in it.
The fact that during the investigation the nephew was also suspected of being involved in the murder would also not cast any doubt on the voluntary character of the confession or on its true nature, because, it was his knowledge derived from the confession that invited suspicion on him.
Further, though the evidence of the nephew does not require corroboration, the finding of the dead body and other articles and other evidence on record corroborate it in material particulars.
Therefore the confession to, the nephew is admissible in evidence and being true, deserves to be acted upon.
[224 E H] (2) When the nephew was suspected of complicity he would have in all probability, disclosed to the police the existence of the dead body and 216 the other articles at the place where they were actually found.
Therefore, it would, in the circumstances of the case, be unsafe to rely upon the information given by the accused, leading to the discovery of the dead body, for proving his 'guilt.
[225 D F] (3) Evidence of absconding is relevant as evidence of conduct under section 8 of the Evidence Act but the guilty mind of the accused is not the only conclusion that could be drawn by the Court, because, even innocent persons when suspected of grave crimes are tempted to evade arrest.
[225 G H]


judgement:
l Appeals Nos. 2419 to 2421 and 2423 to 2425 of 1966.
Appeals by special leave from the judgment and order dated February 22, 1966 of the Bombay High Court, Nagpur Bench in Special Civil Applications Nos. 140 to 142 of 1962.
A. K. Sen, G. L. Sanghi, Rameshwar Nath, for the appellant (in all the appeals).
section C. Manchanda, section K. Aiyar and R. N. Sachthey, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Hegde, J.
In these appeals by special leave, the only ques tion of law that arises for decision is whether the respondent was competent to initiate proceedings under section 34 of the Indian Income Tax Act, 1922 (which will hereinafter be refer red to as the Act).
The respondent initiated proceedings under section 34 of the Act against the appellant by issuing notices under that section on December 26, 1960 in respect of the assessment years 1953 54, 1954 55 and 1955 56.
The appellant challenged the validity of 268 those proceedings by means of a writ petitions under article 226 and 227 of the Constitution in the High Court of Judicature at Bombay (Nagpur Bench) .
Those petitions were summarily dismissed.
The appellant thereafter appealed to this Court after obtaining special leave from this Court.
This Court allowed those appeals on April 8, 1965 holding that the High Court was not justified in summarily dismissing the writ petitions as the allegations made therein merited examination.
Thereafter the High Court issued rule nisi in those petitions.
The respondent opposed those petitions.
After hearing the parties, the High Court again dismissed those writ petitions.
Hence these appeals.
The facts of the case material for deciding these appeals have been set out in detail in this Court 's order dated April 8, 1965.
We shall briefly refer to them.
The above appeals relate to proceedings under section 34 of the Act in respect of three assessment periods.
It would be sufficient if we set out the facts relating to the assessment year 1953 54.
There is no dispute that if the proceedings relating to that year are held to be invalid, similar would be the position regarding the proceedings relating to the other two assessment periods.
On the other hand, if they are held to be valid, the same would be true in respect of the other assessment periods.
The appellant, Madhya Pradesh Industries Ltd. (hereinafter referred to as the company), is engaged in the business of mining ,manganese ore.
On March 18, 1952, the company appointed M/s. J. K. Alloys Ltd. (hereinafter called 'Alloys ') as its selling agents.
In the account year relating to the assessment year 1953 54, the company paid as commission, Rs. 1,13,052/8/9 to the selling agents and claimed that amount as a revenue outgoing in the computation of its profits for that year.
The Income tax Officer made the order of assessment without expressly referring to the said deduction but proceeding on the basis that it is a per missible deduction.
On December 26, 1960, the Income tax Officer issued a notice to the company in exercise of his powers under section 34 of the Act reciting therein that he having "reason to believe that" the income of the company assessable to income tax for the assessment year 1953 54 had (a) escaped assessment and (b) under assessed, he proposes to reassess the income that had escaped assessment or had been under assessed.
He called upon the company to deliver a return of the total income of the company assessable for the said assessment year 1953 54.
In response to a letter sent by the company, the Income tax Officer informed the company that the notice issued by him was under section 34 (1) (a).
Thereafter there was some correspondence between the Income tax Officer and the company.
The Income tax 269 Officer required the company to give him the information called for in the questionnaire issued by him.
The company did not send any reply to the said questionnaire.
On December 21, 1961, the Income tax Officer informed the company that since the questions asked were not replied to, he presumed that no correspondence with Alloys existed and the payment of commission had been made without any justification, Alloys having rendered no service as selling agents.
On April 2, 1962, the company moved the High Court of Judicature of Bombay (Nagpur Bench) praying for the issue of a writ of certiorari under article 226 of the Constitution or an appropriate direction or order under article 227 of the Constitution calling for the record of the case and for the issue of writs in the nature of Prohibition or Mandamus restraining the Income tax Officer from taking any action or proceeding in enforcement or implementation of the notice dated December 26, 1960.
The petition, as mentioned earlier, was rejected in limini.
In the writ petition, the plea taken by the company was that in issuing the notice under section 34(1) (a) of the Act, the Income tax Officer acted without jurisdiction and for a colourable purpose.
Its case as set out in the writ petition is as follows In its return the company disclosed for the year ending March 31, 1953 Rs. 15,70,587/ as its total profits according to its books of account.
In the statement under section 38 (3) of the Act filed with the return, the company disclosed that it had paid Rs. 1,13,052/8/9 as "commission sales" "on different dates" by cheques to Alloys and Rs. 6,091/4/ to J. section Williams on October 4, 1952 by cheque as commission on sales.
In the profit and loss account of the company filed with the return, the amount of Rs. 29,76,067/10/8 was disclosed as received by "sales less com mission".
On December 7, 1953, R. K. Gupta, a Director of the company made a statement before the Income tax Officer stating that the commission was paid to Williams on the sales accounted for during the year ended March 31, 1953 and that the same should be allowed as deduction and that "similar was the case with the commission payable to J. K. Alloys Ltd., which had already been paid subsequently." On February 21, 1954, the Income tax Officer called upon the company to produce amongst other documents, certificates showing whether any receipt included in the income, profits or gains had been credited or transferred to any assets, capital account, or any other liability account, a similar certificate regarding any credit for important expenses claimed under the head "profit and loss A/c", a list of buyers with full addresses along with quantity, number and net proceeds of export business as well as Indian sales, a statement setting out full details of various items of indirect expenses debited to profit 270 and loss account and a statement of expenses grouped and sorted out under the heads, wages, salary and other emoluments.
On June 21, 1954, the company filed the certificates and the statements demanded together with the statement showing that out of the sale proceeds, commission paid to Alloys and J. section Williams was deducted.
In the course, of the assessment proceedings, R. section Agarwal, a representative of the company appeared before the Income tax Officer and agreed that the commission "debited as paid to Williams may be added back ' and about Alloys he said that the commission "had already been paid".
Thereafter on February 14, 1955, the assessment of the company was com pleted by the Income tax Officer.
The Income tax Officer rejected the commission said to have been paid to Williams and added back that amount to the gross profits of the company.
He took no objection to the commission paid to the Alloys.
The case pleaded by the company in the writ petition is that it had placed before the Income tax Officer all the material facts; the Income tax Officer before making the assessment had examined those facts and was satisfied with the explanation given by the company.
The company denied that the Income tax Officer had any reason to believe that by reason of the omission or failure on the part of the company to disclose fully 'and truly all material facts necessary for his assessment for the year in question income, profits or gains chargeable to income tax have escaped assessment for that year or have been under assessed.
The company dis puted that the Income tax Officer had any reason before him to have the required belief.
It also denied the fact that it had omitted or failed to disclose fully and truly all material facts necessary for the assessment in question or that any income, profits, or gains chargeable to income tax have escaped assessment in that year.
Section 34(1) of the Act as at the relevant time read (a) The Income tax Officer has reason to believe that by Mason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly ail material facts necessary for his assessment for that year, income, profits or gains chargeable to income tax have escaped assessment for that year, or have been under assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part 271 of the assessee, the Income tax Officer has in consequence of information in his 'possession reason to believe that income, profits or gains chargeable to income tax have been under assessed or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed.
he may in cases falling under clause ( a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, it the assessee is a company, on the principal officer, thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22 and may proceed to assess or re assess such income, profits or ,gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that subsection Provided that (i) the Income tax Officer shall not issue a notice under this sub section, unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons recorded that it is a fit case for the issue of such notice; (ii) the tax shall be chargeable at the rate at which it would have been charged had the income, profits or gains not escaped assessment or full assessment, as the case may be; and (iii) where the assessment made or to be made is an assessment made or to be made on a person deemed to be the agent of a non resident person under section 43, this sub section shall have effect as if for the periods of eight years and four years a period of one year was substituted.
Explanation.
Production before the Income tax Officer of account books or other evidence from which material facts could with due diligence have been discovered by the Income tax Officer will not necessarily amount to disclosure within the meaning of this, section.
In Calcutta Discount Company Ltd. vs Income Tax Officer Companies Dist.1 and another(1), this Court ruled that before an Income tax Officer could issue a notice under section 34 (1) (a) of the Act, two conditions must co exist, namely, that he must have reason to believe (1) that income, profits or gains had been under assessed and (2) that such under assessment was due to non disclosure of material facts by the assessee.
It was observed therein that where, however, the Income tax Officer has prima facie reasonable grounds for believing that there has been a nondisclosure of a primary material fact, that by itself gives him the jurisdiction to issue a notice under section 34 of the Act and the adequacy or otherwise of the grounds of such belief is not open to investigation by the court.
It is for the assessee who wants to challenge such jurisdiction to establish that the Income tax Officer had no material for such belief.
Speaking for the majority Das Gupta J. observed therein "To confer jurisdiction under this section to issue notice in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year two conditions have therefore to be satisfied.
The first is that the income tax Officer must have reason to believe that income, profits or gains chargeable to income tax have 'been under assessed.
The second is that he must have also reason to believe that such "under assessment" has occurred by reason of either (i) omission or failure on the part of an assessee to make a return of his income under section 22, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year.
Both these conditions are conditions precedent to be satisfied before the Income tax Officer could have jurisdiction to issue a notice for the assessment or re assessment beyond the period of four years but within the period of eight years, from the end of the year in question."
Proceeding further the learned judge observed "The position therefore is that if there were in fact some reasonable grounds for thinking that there had been any non disclosure as, regards any primary fact, which could have a material bearing on the question of 'under assessment ' that would be sufficient to give jurisdiction to the Income tax Officer to issue the notices under section 34.
Whether these grounds were adequate or not for arriving at the conclusion that there was a non disclosure of material facts would not be open for the (1) ; 273 court 's investigation.
In other words, all that is necessary to give this special jurisdiction is that the Income tax Officer had when he assumed ' jurisdiction some prima facie grounds for thinking that there had been some non disclosure of material facts".
Shah J. (one of us) in his dissenting judgment has observed that the expression "has reason to believe" in section 34(1) (a) of the Indian Income Tax Act does not mean a purely subjective satisfaction of the Income tax Officer but predicates the existence of reasons on which such belief has to be founded.
That belief, therefore cannot be founded on mere suspicion and must be based on evidence and any question as to the adequacy of such evidence is wholly immaterial at that stage.
He further observed that where the existence of reasonable belief that there had been under assessment due to non disclosure by the assessee, which is a condition precedent to exercise of the power under section 34(1)(a) is asserted by the assessing authority and the record prima facie supports its existence, any enquiry as to whether the authority could reasonably hold the belief that the under assessment was due to non disclosure by the assessee of material facts necessary for the assessment must, be barred.
In section Narayanappa and ors.vs Commissioner of Income Tax, Bangalore(1), this Court held that two conditions must be satisfied in order to confer jurisdiction on the Income tax Officer to issue the notice under section 34 of the Act in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year, viz. (i) the Income tax Officer must have reason to believe that income, profits or gains chargeable to income tax had been under assessed and (ii) he must have reason to believe that such "under assessment" had occurred by reason of either (a) omission or failure on the part of the assessee to make a return of his income under section 22 or (b) omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment for that year.
Both these conditions are conditions precedent to be satisfied before the Income tax Officer acquires jurisdiction to issue a notice under the section.
If there are in fact some reasonable grounds for the Income tax Officer to believe that there had been any non disclosure as regards any fact, which could have a material bearing on the question of under assessment, that would be sufficient to give jurisdiction to the Income tax Officer to issue the notice under section 34.
Whether these grounds are adequate or not is not a matter for the Court to investigate.
In other words, the sufficiency of the grounds which induced the Income tax Officer to Act is not a justiciable issue.
It is of course open for the assessee (1) 63, I.T.E., 219 274 to contend that the Income tax Officer did not hold the belief that there had been such nondisclosure.
In ' other words, the existence of the belief can be challenged by the assessee but not sufficiency of the reasons for the belief.
Therein it was observed that the expression "reason to believe" in section 34 does not mean purely subjective satisfaction on the part of the Income tax Officer.
The belief must be held in good faith : it cannot be merely a pretence.
It is open to the court to examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the, purpose of the section.
To this limited extent the action of the Income tax Officer in starting proceedings under section 34 of the Act is open to challenge in a court of law.
The same view was again expressed by this Court in Karitamani Venkata Narayana and Sons vs First Additional Income Tax Officer, Rajahmundry (1).
In these cases, the company in its writ petitions had repudiated the assertion of the Income tax Officer that he had reason to believe that due to the omission or failure on the part of the company to give material facts, some income had escaped assessment.
Under those circumstances one would have expected the officer who issued the notices under section 34(1) (a) to file an affidavit setting out the circumstances under which he formed the necessary belief.
We were told that one Mr. Pandey had issued the notices in question.
That officer had not filed any affidavit in these proceedings.
The proceedings recorded by him before issuing the notices have not been produced nor his report to the Commissioner or even the Commissioner 's sanction has not been produced.
Hence it is not possible to hold that the Income tax Officer had any reason to form the belief in question or the reasons before him were relevant for the purpose.
We have no basis before us to hold that the Income tax Officer had jurisdiction to issue, the impugned notices.
Hence the proceedings taken by him have to be quashed.
For the reasons mentioned above, we allow these appeals, set aside the order of the High Court and quash the proceeding$ taken under section 34 (1) (a) of the Act.
The respondent shall pay the costs of these appeals hearing fee one set.
Y.P. Appeal allowed.

dataset_name: IN-Abs

summary/full:
The assessee paid commission to A, one of its selling agents, and claimed that amount as a revenue outgoing in the computation of its profits for that year.
The Income tax Officer made the order of assessment without expressly referring to the said deduction but proceeding on the basis that it was a permissible deduction.
Later, the Income tax Officer issued notices under section 34(1)(a) of the Income tax Act, 1922 stating that he had "reason to believe that" the income of the assessee had escaped assessment and was under assessed.
He sent a questionnaire to the assessee.
Since the assessee , did not reply to the questionnaire, the income tax officer informed the assessee, that he presumed that no correspondence with A existed that no service was rendered by A and the payments made were without justification.
The assessee filed petitions under articles 226 and 227 of the Constitution for restraining the Income tax Officer from taking any action on the notices.
The assessee 's case was that it had placed all the material facts before the income tax officer that the Income tax Officer had examined those facts before making the assessments, and that the Income tax officer had added back the commission paid to another selling agent to the profits of the assessee, but took no objection to the commission paid to A.
The High Court dismissed the petition.
Allowing the assessee 's appeal, this Court HELD : The proceedings taken under section 34(1) (a) must be quashed.
Two conditions must be satisfied in order to confer jurisdiction on the Income tax Officer to issue the notice under section 34 of the Act in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year, viz. (i) the Income tax Officer must have reason to believe that income, profits or gains chargeable to income tax had been under assessed, and (ii) he must have reason to believe that such "under assessment" had occurred by reason of either (a) omission or failure on the part of the assessee to make a return of his income under section 22 or (b) omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment for that year.
Both these conditions are conditions precedent to be satisfied before the Income tax Officer acquires jurisdiction to issue a notice under the section.
If there are in fact some reasonable grounds for the Income tax Officer to believe that there had been any nondisclosure as regards any fact, which could have a material bearing on the question of under assessment, that would be sufficient to give jurisdiction to the Income tax Officer to issue the notice under section 34.
Whether these grounds are adequate or not is not a matter for the Court to investigate.
In other words, the sufficiency of the grounds which induced the Income tax Officer to act is not a justiciable issue.
It is of course open for the assessee to contend that the Income tax Officer did not hold the belief that there had been such non disclosure.
In other words, the existence of 267 the belief can be challenged by the assessee, but not the sufficiency of the reasons for the belief.
The expression, "reason to believe" in section 34 does not mean purely subjective satisfaction on the part of the Income tax Officer.
The belief must be held in good faith , it cannot be merely a pretence.
It is open to the court to examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section.
To this limited extent, the action of the Income tax Officer is starting proceedings under section 34 of the Act is open to challenge in a court of law.
[273 E H; 274 A C] Calcutta Discount Company Ltd. vs Income tax Officer Companies Dist.
1 and another; ; ; section Nailayanappa and Ors.
vs Commissioner of Income tax Bangalore, ; Kantamani Venkata Narayana and Sons vs First Addl.
Income tax Officer, Rajahmundry; , followed.
In the present case, the assessee in its writ petitions had repudiated the assertion of the Income tax Officer that he had reason to believe, that due to the omission or failure on t he part of the company to give material facts, some income had escaped assessment.
Under those circumstances the officer who issued the notices under section 34(1) (a) was expected to file an affidavit setting out the circumstances under which he formed the necessary belief.
That officer had not filed any affidavit in these proceedings.
The proceedings recorded by him before issuing the notices had not been produced nor his report to the Commissioner and even the Commissioner 's sanction had not been produced.
Hence it was not possible to hold that the Income tax Officer had any reason to form the belief in question or the reasons before him were relevant for the purpose.
[274 D F]


judgement:
ON: Civil Appeals Nos. 2062 to 2064, 2072 and 2251 of 1968.
Appeals from the judgment and order dated July 3, 4, 1969 of the Gujarat High Court in Special Civil Applications Nos. 52 of 1969 etc.
and Writ Petitions Nos.
51, 52 and 57 to 60 of 1970.
Petitions under article 32 of the Constitution of India for the enforcement of fundamental rights.
B. Sen and 1.
N. Shroff, for the appellants (in C.A. No. 2062 of 1969) and respondent Nos. 2 to 4 (in V.P. Nos.
59 and 60 of 1970).
M. C. Setalvad and I. N. Shroff, for the appellants (in C.A. No. 2063 of 1969) and respondents Nos. 2 to 4 (in W.P. Nos. 51 and 52 of 1970.
I. N. Shroff, for the appellants (in C.A. Nos.
2064, 2072 and 2251 of 1969) and respondent Nos. 2 to 4 (in W.P. No. 57 and 58 of 1970).
section T. Desai, R. N. Bannerjee, K. M. Desai and Ravinder Narain, for respondents (in all the appeals) and the petitioners (in all the petitions).
B. D. Sharma and R. N. Sachthey, for respondent No. 1 (in all the petitions) The Judgment of the Court was delivered by Hegde, J.
These are connected proceedings.
Herein the validity as well as the interpretation of some of the provisions of the Bombay Provincial Municipal Corporation Act, 1949 (Act 59 of 1949) (to be hereinafter referred to as the Act) as amended from time to time by the Gujarat State comes up for consideration.
In these proceedings some of the Textile Mills of Ahmedabad are ranged against the State of Gujarat as well as the Municipal Corporation of the City of Ahmedabad.
They are seeking to get refund of some amounts paid as property tax, by them, which amounts according to them were illegally collected from them.
290 In order to understand the controversies involved in these proceedings, it is best to set out the course of events leading upto these proceedings.
Various Textile Mills which are involved in these cases will hereafter be referred to as the "companies".
These companies own immovable properties consisting of lands and buildings in the city of Ahmedabad.
The Municipal Corporation of the City of Ahmedabad (which will hereinafter be referred to as the "Corporation") in the purported exercise of its power under the Act and the rules framed thereunder assessed the immovable properties of the companies to property tax for the assessment years 1964 65 and 1965 66.
Those assessments were done on the basis of the method popularly known as "flat rate" method.
According to that method in valuing the lands, the value of plants and machinery were also taken into consideration.
The buildings were assessed on the basis of their floor area.
Those assessments were challenged by means of writ petitions under articles 226 and 227 of the Constitution before the High Court of Gujarat, by the companies.
Those petitions were dismissed by the High Court.
The aggrieved companies thereafter brought up the matters in appeal to this Court.
During the pendency of those appeals, the Corporation proceeded to assess those companies as well as others, to property tax for the assessment year 1966 67.
Those assessments were challenged before this Court by some of the companies by means of writ petitions under article 32 of the Constitution.
Meanwhile on the strength of the assessment made for the assessment years 1964 65 and 1965 66, the Corporation initiated proceedings for recovery of the taxes due under those assessments.
Some of the companies paid the tax assessed but some others including the New Manek Chowk Spinning and Weaving Mills Co. Ltd. did not pay the tax levied on them.
Hence the Officers of the Corporation resorted to the attachment 'of their properties.
At that stage, those companies challenged the validity of those attachment proceedings before the High Court of Gujarat under article 226 of the Constitution.
Those writ petitions were dismissed.
The High Court also refused to grant certificates under article 133(1) of the Constitution.
But the concerned companies appealed to this Court after obtaining special leave from this Court.
In those appeals, those companies prayed for an interim stay of the recovery proceedings.
This Court declined to stay the proceedings in view of the undertaking given on behalf of the Corporation to refund the tax collected within a month from the date of the judgment of this Court, if those companies succeeded in the writ petitions before this Court.
By its judgment dated February 21, 1967, this Court struck down the rules framed under the Act permitting the Corporation to value the lands and buildings on the "flat rate" method.
This, Court opined that it was not permissible for the Corporation to value the premises on the basis of the floor area nor could it take into consideration 291 the value of plants and machinery in determining the rateable, value of the lands and buildings.
That decision is reported in [1967]2, Supreme Court Reports p. 679 (New Manek Chowk Spinning and Heaving Mills Co. Ltd. and ors.
vs Municipal Corporation of the City of Ahmedabad and 'ors.
In view of that conclusion the assessments impugned in the writ petitions were set aside.
The judgment of this Court dealt with the validity of the assessment for the year 1966 67.
But at the time when that judgment was delivered, the appeals filed by some of the companies in respect of the assessment made for the years 1964 65 and 1965 66, were still pending in this Court.
On March 30, 1968, the State of Gujarat brought into force 'an Act entitled, Bombay Provincial Municipal Corporation (Gujarat Amendment) Act, 1968 (hereinafter referred to as the amending Act).
The appeals filed by the companies in this Court cam up for hearing on April15, 1968.
This Court allowed those appeals following its decision in New Manek Chowk Spg.
and Weaving Mills Co. Ltd. and ors.
case (supra).
When those appeals were heard neither the State of Gujarat, nor the Corporation brought to the notice of this Court, the provisions of the amending Act.
After the judgment of this Court in those appeals, the concerned companies called upon the 'Corporation to refund the amounts illegally collected from them as property taxes for the assessment years 1964 65 and 1965 66.
The Corporation did not respond to the demands made by those companies.
Hence they again moved the High Court of Gujarat under article 226 of the Constitution seeking writs of Mandamus against the Corporation and its Officers directing them to refund ' the amounts illegally collected from them and for a declaration that section 152A of the Act newly introduced by the amending Act is ultra vires the Constitution.
The High Court of Gujarat allowed those petitions.
That Court did not go into the vires of section 152A but on a construction of that provision, it came to the conclusion that the said provision did not permit the Corporation to withhold the amounts illegally collected.
The appeals with which we are concerned now were filed by the State of Gujarat and the Corporation against that decision.
During the pendency of those, appeals, the Corporation moved this Court to stay the operation of the judgment of the High Court pending disposal of those appeals.
Those applications came up for hearing on November.
5, 1969.
On that date, this Court stayed the operation of the.
judgment of the High Court of Gujarat on the Corporation undertaking to pay interest on the.
amounts in question at 6% per annum from the date on which they were collected till the date of refund in the event of the appeals failing.
A few days thereafter, the Corporation moved this Court to modify that order.
It wanted to resile from the undertaking given by it.
Hence this 292 Court modified its earlier order and dismissed the stay applications on December 9, 1.969.
On or about December 23, 1969 the Governor of Gujarat promulgated an Ordinance under article 213 of the Constitution entitled Bombay Provincial Municipal ,Corporation (Gujarat Amendment and Validating Provisions) Ordinance, 1969.
This Ordinance will be hereinafter referred to as "the Ordinance".
That Ordinance came into effect immediately.
By means of that Ordinance, a new sub section namely sub section
(3) was introduced into section 152A.
The effect of the insertion of sub section
(3) in section 152A is to authorise the Corporation and its ,Officers to refuse to refund the amount of tax illegally collected despite the orders of this Court as well as the Gujarat High Court till the assessment or reassessment of property tax is made in ,,accordance with the provisions of the Act as amended.
But under its provisions, the Corporation is required to pay interest at 6% on the amount ultimately found liable to be refunded.
In the writ petitions under consideration the validity of the aforementioned provision is challenged.
This, in brief is the history of these cases.
In these proceedings three questions of law arise for decision namely (1) What is the true scope of section 152A (2) Is that pro vision ultra vires any of the provisions of the Constitution and (3) Is sub section
(3) of section 152A (introduced by the Ordinance) violative.
of the Constitution? Section 152A reads as follows "(1) In the City of Ahmedabad if in respect of premises included in the assessment, book relating to Special Property Section, the levy, assessment, collection or recovery of any of the property taxes for any official year preceding, the official year commencing on the 1st April 1968 is affected by a decree or order of a court on the ground that the determination of the rateable value of the premises on the basis of rental value per foot of the floor area was not according to law or that sub rules (2) and (3) of rule 7 of the rules contained in Chapter VIII of Schedule A to this Act were invalid, then it shall be lawful for the Municipal Corporation of the City of Ahmedabad to assess or reassess in respect of such premises any such property tax for any such official year at the rates applicable for that year in 'accordance with the provisions of this Act and the rules as amended by the Bombay Provincial Municipal Corporations (Gujarat Amendment) Act, 1968, as if the said Act had been in force during the year for which 'any such tax is to be assessed or reassessed; and accordingly the readable value of lands and buildings in such 293 premises may be fixed and any such tax, when assessed or reassessed may be levied, collected and recovered by the said Corporation and the provisions of this Act and the rules shall so far as may be apply to such levy, collection and recovery and the fixation of rateable value and the assessment or reassessment, levy collection and recovery of any such tax under this section shall be valid: and shall, not; be called in question on the ground that the same were in any way inconsistent with the provisions of this Act and the rules as in force prior to the commencement of the said Act Provided that if in respect of any such premises the amount of tax assessed or reassessed for any year in accordance with the provisions of this section exceeds the, amount of tax which but for the decree or order of the court as aforesaid could have been assessed for that year in respect of the premises, then the amount of tax to be levied for that year in respect of the premises in accordance with the provisions of this section shall be an amount arrived at after deducting from the amount of tax so assessed or reassessed such amount as may be equal to the amount as so in excess.
(2) Where any such property tax in respect of any such premises is assessed or reassessed under subsection (1) for any official year and in respect of the same premises, the property tax for that year has already been collected or recovered, then the amount of tax so collected or recovered shall be taken into account in determining the amount of tax to be levied and collected under subsection (1) and if the amount already Collected or recovered exceeds the amount to be so levied and collected, the excess shall be refunded in accordance with the rules.
" We are in agreement with the High Court that this section does not empower the Corporation to retain the amounts illegally collected as property tax.
Under this section before a Corporation can retain any amount collected as property tax, there must be an assessment according to law.
What the section authorises, the Corporation is that, despite the fact that certain assessments have been set aside by courts, it shall be lawful for the Corporation to 'assess or reassess the premises concerned in those decisions to property tax for the concerned assessment years at the rates applicable for those years in accordance with the provisions of the Act and the rules as:amended by the amending Act as if the: said Act has been, in force during the years.
for which such tax is to assessed or reassessed and accordingly fix the rateable value of L 12 Sup CI 70 5 294 lands and buildings of those premises and assess or reassess the tax payable and when the tax is so assessed or reassessed, the tax so assessed may be levied, collected 'and recovered by the Corporation and for that purpose the provisions of the amending Act and the rules shall, so far as may, be apply to such collection and proceedings preceding those collections.
That provision further says that the fixation of rateable value so made and the collection and recovery of such tax shall be valid and shall not be called in question on the ground that the same were in any way inconsistent with the provisions of the Act and the rules in force prior to the commencement of the amending Act.
The section also authorises the Corporation to deduct from the amounts earlier illegally collected the tax assessed according to law.
All that the proviso to that section says is that the Corporation shall pay simple interest at the rate of six per centum for annum on the amount of excess liable to be refunded under sub section
(2) from the date of the decree or order of the court referred to in sub section
( 1 ) to the date on which such excess is refunded.
At this stage it may be noted that there had been no assessment orders even when these appeals were heard.
In view of our above conclusion that section 152A does not authorise the Corporation to retain the amounts illegally collected, it is unnecessary for us to examine the validity of that section.
This takes us to the validity of sub section
(3) of section 152A introduced into that section by means of the Ordinance.
That provision reads "Notwithstanding anything contained in any judgment, decree or order of any court, it shall be lawful, and shall be deemed always to have been lawful, for the Municipal Corporation of the City of Ahmedabad to withhold refund of the amount already collected or recovered in respect of any of the property taxes to which sub section (1) applies till assessment or reassessment of such property taxes is made, and the amount of tax to be levied and collected is determined under subsection (1 ) : Provided that the Corporation shall pay simple interest at the rate of six per cent per annum on the amount of excess liable to be, refunded under subsection (2), from the date of decree or order d the court referred to in sub section (1) to the date on which such excess is refunded.
" This is a strange provision.
Prime facie that provision appears to command the Corporation to refuse to refund the amount illegally collected despite the orders of this Court and the High Court.
295 The State of Gujarat was not well advised in introducing this provision.
That provision attempts to make a direct inroad into the judicial powers of the State.
The legislatures under our Constitution have within the prescribed limits, powers to make laws prospectively as well as retrospectively.
By exercise of those powers, the legislature can remove the basis of a decision rendered by a competent court thereby rendering that decision ineffective.
But no legislature in this country has power to ask the instrumentalities of the State to disobey or disregard the decisions given by courts.
The limits of the power of legislatures to interfere with the directions issued by courts were considered by several decisions of this Court.
In Shri Prithvi Cotton Mills Ltd. and anr.
vs The Broach Borough Municipality and ors.
(1) our present Chief Justice speaking for the Constitution Bench of the Court observed "Before we examine section 3 to find out whether it is effective in its purpose or not we may say a few words about validating statutes in general.
When a legislature sets out, to validate a tax declared by a court to be ille gally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively.
The most important condition of course, is that the legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal.
Granted legislative competence, it is not sufficient to declare merely that the decision of the court shall not bind.
for that is tantamount to reversing the decision in exercise of judicial power which the legis lature does not possess or exercise.
A court 's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances.
Ordinarily, a court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction.
Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact re moved and the tax thus made legal.
Sometime this is done by providing for jurisdiction where jurisdiction had not been properly invested before.
Sometimes this is done by re enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re enacted law." (1) 296 In Mehal Chand Sethia vs State of West Bengal(1), officer, J. speaking for the Court stated the legal position in these words, "The argument of counsel for the appellant was that although it was open to the State Legislature by an.
Act and the Governor by an Ordinance to amend the West Bengal Criminal Law Amendment (Special Courts) Act, 1949, it was incompetent for either of them to validate an order of transfer which had already been quashed by the issue of a writ of certiorari by the High Court and the order of transfer being virtually dead, could not be resuscitated by the Governor or, the: Legislature and the validating measures could not touch any adjudication by, the Court.
It appears to us that the High Court took the correct view and the Fourth Special Court had clearly gone wrong in its appreciation of the scope and effect of the.
Validating Act and Ordinance.
A legislature of a State is competent to pass any measure which is within the legislative competence under the Constitution of India.
Of course, this is subject to the provisions of Part HI of the Constitution.
Laws can be enacted either by the Ordinance making power of a Governor or the Legislature of a State in respect of the topics covered by the entries in the appropriate List in the Seventh Schedule to the Constitution.
Subject to the above limitations laws can be prospective as also retrospective in operation.
court of law can pronounce upon the validity of any law and declare the same to be null and void if it was beyond the legislative competence of the legislature or if it infringed the rights enshrined in Part III of the Constitution.
Needless to add it can strike down or declare invalid any Act or direction of a State Government which is not authorised by law.
The position of a Legislature is however different.
It cannot declare any decision of a court of law to be void or of no effect.
" Again Shah, J. (one of us) in Janpada Sabha, Chhindwara vs The Central Provinces Syndicate Ltd. and anr.
and State of Madhya Pradesh vs Amalgamated Coal Fields Ltd. and anr.
(2) ; speaking for the Constitution Bench explained the legal position in these words : "The relevant words which purported to validate the imposition, assessment and collection of cess on coal may be recalled they are 'cesses imposed, assessed or collected by the Board in pursuance of the notifications ' (1) Cr.
Appeal No. 75/69 decided on 10 9 1969.
(2) ; 297 notices specified in the Schedule shall, for all purposes, be deemed to be , and to have always been validly imposed, assessed or collected as if the enactment under which they were so issued stood amended at all material times so as to empower the Board to issue the said notifications/notices.
Thereby the enactments, i.e. Act 4 of 1920 and the Rules, framed under the Act pursuant to which the notifications and notices were issued, must be deemed to have been amended by the Act.
But the Act does not set out the amendments intended to be made in the enactments.
Act 18 of 1964 is a piece of clumsy drafting.
By a fiction it deems the Act of 1920 and the rules framed thereunder to have been amended without disclosing the text or even the nature of the amendments.
" Proceeding further, it was observed "On the words used in the Act, it is plain that the legislature attempted to overrule or set aside the decision of this Court.
That in our judgment, is not open to the Legislature to do under our constitutional scheme.
It is open to the Legislature within certain limits to amend the provisions of an Act retrospectively and to declare what the law shall be deemed to have been, but it is not open to the Legislature to say that a judgment of a court properly constituted and rendered in exercise of its powers in a matter brought before it shall be deemed to be ineffective and the interpretation of the law shall be otherwise than as declared by the Court.
" We are clearly of, the opinion that sub section
(3) of section 152A introduced by the Ordinance is repugnant to our Constitution.
That apart, the said provision authorities the Corporation to retain the ,amounts illegally collected and treat them as loans.
That ,is an authority to collect forced loans.
Such conferment of power is impermissible under our Constitution see State of Madhya Pradesh vs Ranojirao Shinde and anr.
( 4 ) In the result, the above appeals are 'dismissed with costs and the writ petitions allowed and section 152A(3) is struck down.
The petitioners are entitled to their costs in those petitions one hearing fee both in the appeals and in the writ petitions.
Y.P. Appeals dismissed.

summary/full:
The appellant Corporation assessed the immovable properties of the respondents to property tax for the year 1964 65 and 1965 66 on the basis of the 'flat rate ' method under the Bombay Provincial Municipal Corporation Act, 1949.
The assessments were challenged in the High Court but the petitions were dismissed.
While appeals were pending in this Court, the appellant initiated proceedings for the recovery of the taxes and attached the properties of the respondents.
The respondents challenged the attachment proceedings but their petitions were again dismissed.
In appeals against those orders in this Court the respondents prayed for interim stay, but this Court did not grant stay because the appellant undertook to return the amounts if the respondents succeeded.
This Court thereafter allowed the appeals by the respondents.
Meanwhile an amending Act entitled the Bombay Provincial Municipal Corporation (Gujarat, Amendment) Act, 1968, was passed introducing section 152A into the 1949 Act, but that provision was not brought to the notice of this Court.
However, when.
the respondents demanded refund of the amounts illegally collected from them the appellant did not comply and hence the respondents moved the High Court again.
Those petitions were allowed and the appellant appealed to this Court.
While the appeals were pending, the Bombay Provincial Municipal Corporation (Gujarat Amendment and Validity Provisions) Ordinance, 1969, was passed and sub section
(3) was introduced in s 152A. HELD : Under section 152A before a Corporation can retain any amount collected as property tax, there must be an, assessment according to law.
But in the present case there Were no 'assessment orders in accordance with the provisions of the 1949 Act and the rules as amended by the, Amending Act, 1968.
Therefore, the appellant was not entitled to retain, the amounts collected as the section does not authorise the Corporation to retain amounts illegally collected.
[293 G; 294 D] (2) Sub Section (3) of section 152A, commands the Corporation to refuse to refund the amount illegally collected despite the orders of this Court and the High Court.
It markes a direct inroad into the judicial powers of the State.
The Legislatures under the Constitution have, within prescribed limits, powers to make laws prospectively as well as retrospectively.
By exercise of those powers the legislature can remove the basis of a decision rendered by a competent, court thereby rendering the decision ineffective.
But, no legislature in this Country has power to ask the instrumentalities of the State to disobey or disregard the decisions given by courts.
Therefore, section 152A(3), introduced by the Ordinance is repugnant to the Constitution.
1294 H; 295 A C; 297 F] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality [1970] 1 S.C.R. Mahal Chand Sethia vs State of West Bengal Cr.
No. 75/69 dt.
289 10 9 69 and Janpada Sabha, Chhindwara vs Central Provinces Syndicate Ltd. and State of Madhya Pradesh vs Amalgamated Coal Fields Ltd. ; , followed.
The apart it authorises the Corporation to retain the amounts illegally collected and ' treat them as loans, that is, authorises the collection of forced loans which is impermissible under the Constitution.
State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489, followed.