judgement:
ase, there was not a whisper of the application under section 25A (1) of the Act by the appellant on March 15, 1957, when the penalty proceedings were initiated against it.
Even on March 20, 1958.
when the penalty was imposed, there was no order under section 25A(l) of the Act lt was only on March 26, 1962, that the partition was recognised and order 506 under section 27A(1) of the Act was passed.
There was, thus, no bar to the imposition or the impugned penalty.
[509E F] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 886 of 1971.
(From the judgment and order dated the 18.9.1969 of the Allahabad High Court in I. T. R. Misc.
Case No. 836 of 1963.) G. C. Sharma, V. N. Ganpule, D. K. Jain, Anup Sharma and P. C. Kapur, for the appellant.
B. Sen and 5.
P. Nayar, for the respondent The Judgment of the Court was delivered by JASWANT SINGH, J.
This is an appeal by certificate of fitness granted by the High Court of Judicature at Allahabad under section 66 A(2) of the Indian Income tax Act, 1922 (hereinafter referred to as 'the Act ') from its judgment dated September 18, 1969 in I.T.R. Misc.
Case No. 836 of 1963.
The facts giving rise to this appeal are: The appellant, a Hindu undivided family consisted of Gauri Shankar, the father, and his three sons viz. Chandrabhan, Bengali Lal and Brij Kishan.
Gauri Shankar, the karta of the family who was incharge of the affairs of the family during the relevant year which extended from April 13, 1945 to April 12, 1946, the assessment year being 1946 47, died on April 2, 1946.
He was succeeded by his son, Chandrabhan as Karta of the family.
The appellant had, in the first instance, filed a return showing an income of Rs. 9,701 j .
On scrutiny of the relevant material, the Income Tax Officer found a number of discrepencies in the accounts of the appellant and also noted the existence of cash credits to the appellant 's account in the books of another firm viz. M/s. Tilyani Glass Works and a certain sum deposited in an account styled as Abdul Wahid Khan & Sons.
He thereupon issued a notice dated March 15, 1957, calling upon the appellant to explain the discrepencies in the accounts as also in the cash credits and to show cause why a penalty under section 28(1)(c) of the Act be not imposed upon it.
In response to the notice, a representative of the appellant appeared before the Income Tax officer and voluntarily agreed to a sum of Rs. 15,000/ being treated as its income.
After hearing the Appellant 's representative the Income Tax Officer felt satisfied that the appellant had deliberately concealed its income and furnished an inaccurate return.
Accordingly, by his order dated March 20, 1958, he added a sum of Rs. 68,550/ to the income of the appellant and imposed on it a penalty of Rs. 26,000/ .
Meanwhile, on March 19, 1957, an application under section 25 A of the Act was made to the Income Tax officer for an order recording partition of joint family property in definite portions, which according to the application had taken place amongst the members of the Hindu undivided family on June 22, 1956.
The Income Tax Officer on being satisfied after making enquiries that a complete partition of the joint family property has taken place, recorded an order under section 25A (1) of the Act on March 26, 1962, accepting the partition with effect 507 from June 22, 1956, as claimed.
Against the penalty of Rs. 26,000/ imposed the Income Tax Officer by his order dated March 20, 1958, the appellant preferred an appeal to the Appellate Assistant Commissioner, who reduced the Penalty to Rs. 15,000/ .
Not satisfied with THIS reduction, the appellant went up in further appeal to the Income tax appellate Tribunal and raised before it a number of contentions Amongst other things, it was urged before the Tribunal that since the Hindu undivided family had disrupted on June 22, 1956, as accepted by the Income Tax officer in his aforesaid order date March 26, 1962, passed under section 25 A(l) cf the Act, the imposition of the penalty by the Income Tax officer on March 20, 1958, after the disruption of the family was bad in law and could not be sustained.
While rejecting the other contentions raised on behalf of the appellant, the Tribunal upheld this contention by its order dated March 6, 1963.
Thereupon the Commissioner of Income tax, U.P. made application before the Income tax Appellate Tribunal under section 66(1) of the Act requesting that the following question of law arising from its decision be referred to the High Court: "Whether in the facts and circumstances of the case the imposition of penalty under section 28 ( 1 ) (c) on the Hindu Undivided family after it had disrupted within the meaning of section 25 A is bad in law".
Acceding to the request of the Commissioner of Income Tax, the Tribunal referred the above mentioned question to the High Court which answered the same in the negative The appellant thereupon applied to the High Court and obtained the aforesaid certificate of fitness for appeal to this Court.
This is the matter is before us.
E Relying on Commissioner of Income Tax vs Sanichar Sah Bhim Sah(1), section A. Raju Chattiar & Ors.
vs Collector of Madras & Anr.(2) Mahankali Subha Rao, Mahankali Nageswara Rao & Anr.
vs Commissioner of Income Tax Hyderabad(3) and Commissioner of Income tax Punjab vs Mothu Ram Prem Chand(4) counsel for the appellant has reiterated before us that since the Hindu undivided family had dissolved on June 22, 1956 as accepted by the Income Tax officer vide his order dated March 26, 1962 passed under section 25 A of the Act and the Act did not provide any machinery for imposition of the penalty on the Hindu family after its disruption, the imposition of penalty on March 20, 1958 was had in law and could not be sustained.
Counsel appearing on behalf of the Revenue has, on the other hand, urged that imposition of impugned penalty cannot be challenged as in view of section 25 A(3) of the Act, a Hindu undivided family must be (deemed to have continued in existence till the date of the passing of the order under section 25 A(l) of the Act.
For a proper determination of the question, it is necessary to refer to section 25 a of the Act which at the relevant time stood as under: 25 A. (1) Where, at the time of making an assessment ll under section 23, it is claimed by or on behalf of any member (1) (1957) 27 (2) (3) (4) 508 of a Hindu family hitherto assessed as undivided that a partition has taken place among the members of such family, the Income tax Officer shall make such inquiry thereinto as he may think fit, and if he is satisfied that the joint family property has been partitioned among the various members or groups of members in definite portions, he shall record an order to that effect: Provided that no such order shall be recorded until notices of the inquiry have been served on all the members of the family (2) Where Such an order has been passed, or where any person has succeeded to a business, profession or vocation formerly carried on by a Hindu undivided family, whose joint family property has been partitioned on or after the last day on which it carried on such business.
profession or vocation, The Income tx Officer shall make an assessment of the total income received by or on behalf of the joint family as such, as if no partition(LPN had taken place, and each member or group of members shall in addition to any income tax for which he of may be separately liable and notwithstanding anything contained in sub section (1) of section 14, be liable for a share of the tax on the income so assessed according to the portion of the joint family property allotted to him or it; and the Income tax officer shall make assessments accordingly with provisions of section 23.
Provided that all the members and groups of members whose joint family property has been partitioned shall be liable jointly and severally for the tax assessed on the total income received by or on behalf of the joint family as such.
(3) Where such an order has not been passed in respect of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family.`` lt will be noticed that sub section (3) of the above quoted section embodies a legal fiction according to which a Hindu family which has been previously assessed as 'undivided ' is to be continued to be treated as 'undivided ' till the passing of the order under sub section of the section.
This view strength from two decisions of this Court in Additional Income tax Officer Quddapah A. Thimmayya & Anr(1) and Joint family of Udayan Chinubhai etc vs Commissioner of Income tax Gujarat(2) where it was held that so long(r as No order under section 25 a(I) of the Act is recorded, the jurisdiction of the Income tax officer to continue to assess as undivided despite partition under personal law a Hindu family which has hitherto been asseesed in that status remains unaffected.
It will be profitable in this connection (1) (2) 509 to refer to the following observation made in A. Thimmayya 's case (supra) "The section makes two substantive provisions (i) that a Hindu undivided family Which has been assessed to tax shall he deemed, for The purposes of The Act, to continue to be treated as undivided and therefore liable to be take in that stats unless an order is passed in respect of that family recording, partition of its property as contemplated by sub station (t); and (ii) if at the time of making an assessment it is claimed by or on behalf the members of the family that the property of the joint family has been partitioned; the members or groups of members in definite portions, i.e. a complete partition of the entire estate is made resulting in such physical division of the estate as it is capable of being made.
the Income tax Officer shall hold an inquiry, and if he is satisfied that the partition had taken place the shall record an order to that effect .
The Income tax Officer may assess the income of the Hindu family hither to assessed as undivided notwithstanding partition, is no claim in that behalf has been make to him or is he is not satisfied about the truth of the claim that the joint family property has been partitioned in definite politics if on account of some error or inadvertence he fails Lo dispose of the claim.
In all these cases his jurisdiction to assess the income of the family hitherto assessed as undivided remain unaffected, for the procedure for making assessment of tax is statutory".
In face of the aforesaid decisions of this court, it is Court it is not necessary to burden the record by discussing the decisions cited by counsel for the appellant.
In the present case, there was not a whisper of the application under section 25 A(1) of the Act by the appellant on March 15, 1957 when the penalty proceedings were initiated against it.
Even on March 20, 1958, when the penalty was imposed, there was no order under section 25 A(1 ) of the Act.
It was only on March 26, 1962, that the partition was recognised and order under section 25 A(1) of the Act was passed.
There was thus no bar to the imposition of the impugned penalty.
Accordingly, we find no force in the contention of counsel for the appellant and are of the opinion that the question as was in the rightly by the High Court.

summary/full:
In response to a show cause notice dated March 15, 1957, under section 28(1)(c) of the Income Tax Act, before imposing a penalty for deliberate concealment of its income, the appellant, through its authorised representative, voluntarily agreed to a slum of Rs. 15,000/ being treated as income of Hindu Undivided Family.
The Income Tax officer, by his order dated March 20,1958, added a sum of Rs. 68,550/ to the income of the appellant and imposed on it a penalty of Rs. 26,000/ which on appeal was reduced to Rs. 15,000/ .
Meanwhile, on March 19, 1957, the appellant filed an application under section 25A of the Act for an order recording partition of joint family property in definite portions from June 22, 1956, claiming that date to be the date of partition.
The Income Tax officer, after due enquiries, accepted the disruption of the Hindu Undivided Family as claimed by his order dated March 26, 1962.
This led the appellant to contend that, in view of ' the orders dated March 26, 1962, of the Income Tax officer, the imposition of the penalty by him on March 20, 1958 was bad in law and could not be sustained.
The Tribunal uphold the contentions of the appellant resulting in a reference under section 66(1) of the Act to the High Court of Allahabad (Lucknow Bench), which reversed the decision or the Tribunal.
However, the High Court granted a certificate of fitness for appeal to this Court.
Dismissing the appeals the Court, ^ HELD: Sub section (3) of section 25A of the Income Tax Act embodies a legal fiction according to which a Hindu family which has been previously assessed as "undivided" is to be continued to be treated as "undivided" till the passing of the order under sub section
(1) of section 25A.
So long as no order under section 25(A)(1) 1 of the Act is recorded, the jurisdiction of the Income Tax officer to continue to assess as undivided despite a partition under personal law, a Hindu family which has hitherto been assessed in that status, remain unaffected.
[508G H] Additional Income Tax Officer, Quddapah vs A. Thimmayya vs Commissioner of Income Tax, Gujrat , applied.
Commissioner of Income Tax vs Sanchar Sah Bhim Sah section A. Raju Chattiar & Ors.
vs Collector of Madras & Anr. ; Mahankali Subba Rao Mahankali Nageswara Rao & Anr.
v, Commissioner of income Tax.
Hyderabad and Commissioner of Income Tax, Punjab vs Mothu Ram Prem Chand , not applicable


judgement:
APPELLATE JURISDICTION: Writ Petition No. 49 of 1973.
Under Article 32 of the Constitution and Civil Appeals Nos. 43 and 44 of 1973 Appeals by Special Leave from the Judgment and order dated the 27th October 1972 of the Rajasthan High Court in D. B.
Civil Writ Petition Nos. 398/72 and 1 885/71 respectively.
A. K. Sen, B. Sen and H. K. Puri for the Appellants.
section T. Desai, section M. lain and section K. Jain for the Respondents.
J. We have before us a petition under Article 32 of the Constitution and two appeals by Special leave from the judgment of the High Court of Rajasthan between the same parties.
The three cases before us raise the same question of law.
It is: Do the goods called "Rayon tyre Cord Fabric" sold by the Delhi Cloth & General Mills Co. Ltd. to manufacturers of tyres, who use it for the purpose of impregnating it with rubber, fall under entry 18 of the Schedule of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as 'the Act ' ) ? The schedule mentioned above gives a list of goods on the sale or purchase of which no tax is payable under the Act. "The relevant entry 18, which was omitted in 1973, reads as follows: "18.
All cotton fabrics, rayon or artificial silk fabrics, woollen fabrics, sugar and tobacco, as defined in the Additional Duties cf Excise (Goods of Special Importance) Act, 1957 (Central Act 58 of 1957)".
Section 2(C) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, lays down: "2 (C) the words and expressions 'sugar ', 'tobacco ', 'cotton fabrics ', 'silk fabrics ', 'woollen fabrics ' and rayon or artificial silk fabrics shall have the meanings respectively assigned to them in Items Nos. 1, 4, 19, 20, 21 and 22 of the First Schedule to the Central Excise and Salt Act, 1944".
The Writ Petition of the Delhi Cloth and General Mills Co. Ltd. states that "rayon tyre cord fabric" is "manufactured out of rayon yarn and cord".
It goes on to explain that this fabric is "a textile consisting of rayon threads in the warp and cotton threads in the weft and is manufactured on weaving looms in the same manner as in other ordinary textile".
It is also stated there: "The fabric consists of more than 60% by weight of rayon and is unprocessed.
The weft threads are not used merely for tying the warp threads together for the purpose of convenient transport or storage but form an integral part of the whole fabric".
500 The petitioners state that the manufacturers of tyres to whom the fabric is supplied "impregnate the fabric with rubber and weave it into a fabric in the same way as is being done by the first petitioner".
Thus, the petitioners allege that they manufacture "a textile" and also that it serves as part of raw material for what ultimately also goes into the manufacture of a fabric.
After indicating the manner in which and the substance out of which "rayon tyre cord fabric" is made and its composition, the petition sets out item 22 of the first schedule of the Central Excises and Salt Act, 1941, as the applicable entry covering the goods manufactured by the petitioner.
This item reads as follows: "Rayon or artificial silk fabrics 'means all varieties of fabrics manufactured either wholly or partly from rayon or artificial silk and includes embroidery in the piece, in strips or in the motifs and fabrics impregnated or derivatives or of other artificial plastic materials, but does not included any such fabrics: (i) If it contains 40% or more by weight of wool.
(ii) lf it contains 40% or more by weight of silk.
(iii)If it contains cotton and less than 60% by weight of rayon or artificial silk; or (iv) If it contains no cotton and less than 40% by weight of wool and less than 40% by weight of rayon or artificial silk".
The petitioners assert that, from years 1966 to 1969, the respondent Commercial Tax officer was not subjecting the goods of this description to sales tax and accepted the case of the petitioners that they were exempt from taxation.
The reasoning of the Commercial Tax Officer, in exempting these goods, is also mentioned.
It is then stated that, as some questions were put in the Rajasthan State Legislative Assembly, on or about 20th April, 1971, asking for the reason why this particular type of goods of the petitioners were exempted from Sales tax, the Commissioner of Commercial Tax issued a letter to the Commercial Tax Officer to levy Sales tax on the "rayon cord fabric" manufactured by the petitioner.
Thereafter, notices under the proviso to section 12(1) of the Act were issued for the years 1965 to 1969 with a view to reopening the assessments on the ground that the sales of these goods had wrongly escaped assessment.
but these were dropped due to some preliminary 501 objections.
Fresh notices were then issued and proceedings for subsequent assessment years were also taken.
By orders passed on various dates, the Commercial Tax officer rejected the petitioners ' objections to Sales tax on "rayon tyre cord fabric".
The petitioners have, however, come up to this Court directly against the order and provisional assessment dated 21 st November, 1 972.
It also appears from the writ petition that proceedings fol the assessment year 1972 73 arc still pending before the Commercial Tax officer.
Civil Appeals Nos.
43 of 1973 and 44 of 1973 by special leave are directed against a common judgment of a Division Bench of the High Court of Rajasthan, given on 27.10.1972, dismissal, the appellants ' Writ Petitions against the assessment order dated 26th March, 1971, for the years 1968 69 and 1969 70 made by the Commercial Tax officer.
The view of the Commercial Tax Officer, questioned by the petitioners, was that the goods now sought to be taxed are not the "end product".
The High Court did not go into the merits of the case.
It accepted the preliminary objection of the State of Rajasthan that the petitioner should first resort to alternative remedies provided Under the Act so that the appellate authority under Section 13 of the Act may go into the whole evidence and decide disputed questions of fact.
There is also provision for revision by the Board of Revenue under Section 14 when moved by the assessing authority.
The High Court did not find any error "apparent upon the face of the record" The taxing authorities have the.
jurisdiction to decide the question before them either rightly or wrongly.
In any case, its view was that, until the statutory remedies had not been exhausted, leaving some "error apparent on the face of the record" still to be rectified by the High Court, a case for interference under Article 226 of the Constitution will not arise.
It is urged on behalf of the Delhi Cloth Mills that no disputed question of fact arises.
It is submitted that, on admitted facts, it could be decided whether the "tyre cord fabric" is an exempted "fabric" or not.
We think that this view over looks several matters, indicated below, including the admission on behalf of the Delhi Cloth Mills that, in the case before us, the "tyre cord fabric" manufactured by it is woven by its purchasers "into a fabric in the same way as is being done by the first petitioner".
This certainly means that the tyre cord fabric serves as raw material for another fabric which ultimately emerges by subjecting the goods manufactured by Delhi Cloth Mills to a process of impregnating with rubber.
502 A sample of the tyre cord fabric was actually produced before us.
It is said that the "fabric" is manufactured in the same way as cloth is woven on looms.
It consists of cords which could be said to constitute warps, running length wise, and wefts, running breadth wise.
But, the spaces left between them are so wide, presumably for purposes of impregnation with rubber, that it may not pass for an ordinary "fabric '.
Like one of those mentioned in entry 19 of the first schedule to the , such as "tussors", "corduroy", "gaberdine", "denim` '.
Indeed, if the "lyre cord fabric" is so well established a category of rayon "fabric", it could have found mention specifically in item 22 in the same way as the numerous varieties of cotton fabrics are mentioned in item 19.
In answer to this argument, it could be urged that, for some reason, entry No. 22 does not enumerate rayon and silk fabrics in the same fashion as the cotton fabrics are specified by name in item 19.
It is certainly a question which appertains to the knowledge of technical aspects of textile weaving and production to determine at what stage threads or cords forming warps and wefts really amount to a "fabric".
It is true that the term fabric has a wide meaning.
Its first meaning given in the Oxford English Dictionary is: "A product of skilled workmanship".
The first example of such a product is: "An edifice, a building".
The fourth example of the first meaning is: I "a manufactured material; now only a 'textile fabric ', a woven stuff".
We think that we are necessarily concerned here only with "textiles" as fabrics.
This is clear from entries 19 to 22(D) of the first Schedule of the .
Entry 22AA is "textile fabrics not elsewhere specified".
This residuary entry and the descriptions in preceding entries seem to us to make it abundantly clear that we are dealing here only with "textile fabrics".
The case of the Delhi Cloth Mills also is that the product is a. "textile".
There fore, the essential question to determine is the stage at which the goods under consideration become a 'textile fabric".
The meaning of the term "textile", given in the Oxford Dictionary, is: "A woven fabric; any kind of cloth".
It must acquire a body and a texture.
Presumably it is not just the skeleton of a textile.
Apparently, it is more than that.
But, against pushing this point of view too far it may be urged that in the technical and commercial parlance we are dealing with a "fabric".
It is, therefore, difficult to find fault with the view of the High Court that there is no error apparent on the face of the record and 503 that the taxing authorities should be left to determine whether the "tyre cord fabric" is more correctly capable of being described as a fabric or as merely cord pretending to pass off as ar textile fabric This is really a technical question.
In any case, it is a question on which two views seem possible on apparent facts.
And, neither of the two views can be rejected outright as untenable.
It requires careful consideration of the technical processes of manufacturing, of the composition of the "tyre cord fabric ', and an evaluation of opinion of experts on the subject, to be able to decide the question satisfactorily rt may also require some examination of commercial usage and terminology or the language of the market in goods of this type.
We, therefore, think that the High Court was right in not interfering with the decisions of the taxing authorities at this stage.
We also think that for the same reason we could not interfere under Article 32 with the decision of the Commercial Tax officer.
Indeed, no fundamental right is shown to be affected by a mere determination of the question indicated above.
There is no absence of jurisdiction of the taxing authorities who had the power to decide the question either rightly or wrongly.
It has been urged, on behalf of the Delhi Cloth Mills that the High Court should have interfered as the question whether the tyre cord fabric is the end product or not in the final manufacture of an other fabric was quite irrelevant.
It was submitted that, so far as the Delhi Cloth Mills is concerned, the goods under consideration constitute the "end product" which they sell in the market.
The example given was that of cloth which is the "end product" for the mills which manufacture cloth, but, it becomes the raw material for tailors and for those who make ready made clothes to sell them.
This argument overlooks that it is not so much the point of manufacture at which the Mills sell their own product which determines the nature of goods which are entitled to exemption, but it is the stage reached by this product, in the process of manufacture of fabrication of a "textile", which should decide the question.
As we have already indicated, the context in which the entry occurs shows that it is meant for "textile" fabrics and not for any kind of fabric.
Therefore even if the tyre cord fabric may be the end product for the Delhi Cloth Mills, the crucial question is: Does this product constitute a fabric which is a textile? A textile fabric does not cover everything which could be made into a fabric.
Mere cord does not become a textile fabric just because it requires some skill to make it.
The rather wide dictionary meanings of the term "fabric" do not appear to us to give the exact meaning of the term "fabric" as 504 used in the relevant entries entitled to exemption.
In the entries, it evidently means a fabric which is also a textile.
The question, therefore, to be determined by the Tax authorities themselves is whether the product for which the Delhi Cloth Mill claims exemption Is a textile fabric and not any other kind of fabric.
Having indicated the nature of the enquiry which must by undertaken by the taxing authorities, we find that there is no sufficient reason for overriding and discarding the High Court 's view that, on what appeared to the High Court to be a question Of fact, it should not decide whether the product under consideration constitutes a fabric entitled to exemption.
There was no appeal by the State of Rajasthan.
It does not, therefore, seem propel.
for us to finally decide, on merits, the question argued before us in the appeals by the Delhi Cloth Mills which are before us unless we could have decided the matter in favour of the appellant.
We could have only done that if we were of opinion that the taxing authorities had committed error apparent on the face of the record.
But, as already indicated above, we are not of this opinion.
For all the reasons given above, we think that the Writ Petition as well as the appeals by special leave are liable to be dismissed, and, we hereby dismiss them with one set of costs.
P. B. R. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
Rayon tyre cord fabric which is a textile consisting of rayon threads in the warp and cotton threads in the weft is manufactured on weaving looms in the same manner as any other ordinary textile.
The tyre manufacturers to whom the product is supplied.
impregnate the fabric with rubber and weave it into fabric.
Under Entry 18 of Schedule of the Rajasthan Sales Tax Act, 1954, rayon fabrics were exempt from sales tax.
When the Commercial Tax officer rejected the petitioners ' objections to sales tax being levied on rayon tyre cord fabric, the e petitioners filed a petition under Article 32 of the Constitution alleging breach of Fundamental Rights.
In respect of certain earlier assessment years, however, the view of the Commercial Tax officer was that the goods were not the end product.
when, the matter was taken to the High Court, it held that, until the statutory remedies had been exhausted, no case for interference under article 226 arose.
It did not find any error apparent on the face of the record.
Hence, the appeals by special leave.
E In the write petition as well as in the appeals it was contented that the goods constituted the end product which the petitioners sell in the market and, therefore, were exempt from sales tax.
Dismissing the petition and appeals.
^ HELD: (1)(a) It is difficult to find fault with the view of the, High Court there was no error apparent on the face of the record and that the taxing authorities should be left tb determine whether the tyre cord fabric is more correctly capable of being described as a fabric or as merely cord passing of as a textile fabric.
This is really a technical question.
In any case.
it is a question on which two views may be possible.
[503C] (b) The fact that the tyre cord fabric manufactured by the petitioners is woven by its purchases into a fabric in the same way as is being done by the petitioners means that the tyre cord fabric serves also as raw material for another fabric which ultimately emerges by subjecting the goods to a process of impregnating it with rubber.
The essential question to determine is the stage at which the goods under consideration became textile fabrics if they do become that at all.
[502C; 503A] (2) This Court cannot interfere under article 32 with the decision of the Commercial Tax Officer, because no Fundamental Right is shown to be affected by the mere determination of the question.
There was no absence of jurisdiction of the taxing authorities who had the power to decide the question either rightly or wrongly.
[503E] 34 833 SUP CI/76 498 ARGUMENTS For the petitioners Respondent No. 1 did not produce or get any evidence from the commercial community dealing with rayon tyre yarn and cord and rayon tyre fabric for the purpose of controverting the conclusive evidence produced by the petitioners to the effect that in the commercial community dealing with the said goods these goods were different both from the point of view of manufacture and also from the point of view of ultimate end product and are considered to be different by the commercial community, which heats rayon tyre cord fabric as fabric.
There was no evidence on the contrary to come to the conclusion that the rayon tyre fabric was not fabric.
The High Court wrongly relied on 25 STC 407 which had no application in the present case, ignoring the decision in 22 STC 470 and 28 STC 431.
It was therefore not a case of disputed question of fact, but a case of admitted fact by the commercial community against which there was no evidence before the respondent.
The alternative remedy of appeal is not at all efficacious in the facts and circumstances of the present case inasmuch as the Commissioner and the State Government having already made up their mind to levy tax, no relief could be expected by the appellants from him and the High Court should have interfered under articles 226 and 227.
Further ill this case there was no question of disputed facts.
The sample was admitted.
There was uncontradicted evidence that the product of the petitioners is known as rayon cord fabric by the commercial community and by common parlance.
The case is a misdirection of law on the part of the assessing authority.
For the respondents There was no error of law apparent on the face of the record as contended by the petitioners.
The High, Court rightly rejected the writ petitions on the ground that there were disputed facts and there are alternative remedies and full and adequate machinery under the Act itself.
The assessee mills, when paying excise duty, paid it only as on yarn under entry 18 of the First Schedule to the Central Excise and Salt Act.
The mills did not pay additional duty under the Additional Duties of Excise (Goods of Special Importance) Act 1956 on the ground that the material was not fabric.
When it suited the mills the material wag said to be yarn and in case of sales tax it contended that it was fabric.
This fact itself was a strong indication that this was a disputed question of fact.


judgement:
Civil Appeal 1277 of 1968.
(Appeal by special leave from the order No. 2674 of 1967 of the Ministry of Finance, Government of India) Hardev Singh, Ishwar Chand Jain and R. section Sodhi; for the Appellant.
section N. Prasad and section P. Nayar, for respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal by special leave raises a short question as to what is the correct amount of import duty chargeable on pot motors when imported separately from Rayon Spinning frames: do they fall within Item 72(3) or Item 73(21) of the First Schedule to the Indian Customs Tariff? The facts giving rise to the appeal are few and may be briefly stated as follows: Some time in 1956 a licence for setting up a plant for manufacture of Rayon was granted to one Kesoram Industries & Cotton Mills Ltd. under the Industries Development and Regulation Act, 1951.
Since the machinery and equipment required for setting up the plant were not available in India, Kesoram Industries and Cotton Mills Ltd. applied for an import licence and on the basis of this application, import licence was granted to them for importing "complete continuous filament Rayon plant with spares and accessories" of the CIF value of Rs. 5.50 crores from general currency area excluding South Africa.
491 It appears that Kesoram Industries & Cotton Mills Ltd. imported, on the strength of this import licence, Rayon Spinning frames, excluding pot motors, from Japan, but so far as pot motors were concerned, they authorised the appellants to import from Germany 4000 of these motors for initial installation of the Spinning frames.
Pursuant to the authority so given, the appellants placed orders for 4000 pot motors with manufacturers in Germany and imported the same in seven different consignments under the Import licence of Kesoram Industries & Cotton Mills Ltd. These seven consignments arrived at Calcutta port between September and December 1961.
The appellants claimed before the Customs authorities at the time of assessment of import duty on these seven consignments that pot motors imported by them fall within Item 72(3) of the First Schedule to the Indian Customs Tariff and were chargeable to import duty under that item at the rate of 15 percent of their accepted value.
This claim was accepted by the Customs authorities and these seven consignments were allowed to be cleared on payment of import duty under Item 72(3).
However, within a short time thereafter, the Assistant Collector of Customs issued seven separate notices of demand in respect of these seven consignments claiming that customs duty at the rate of 15 per cent had been short levied, because pot motors were assessable at the rate of 20 per cent and requiring the appellants to pay up the difference within 15 days from the date of demand under section 39 of the .
The appellants sent representations against these notices pointing out that and we are quoting here from the representation dated 8th December, 1961 which is: "These pot motors are vital component part of the Rayon Spinning machines already imported and are not in excess of the quantity required for the first installation of the said plant.
The pot motors are required for 24 Spinning frames having 2 sides each.
On each side of these frames, 66 motors are connected.
Hence total initial requirement of pot motors for running 24 frames is 3168.
In view of general experience with this type of plant approximately 25% additional motors are required for trial runs and commissioning 4000 Nos.
Of not motors should, there fore, be supplied for first installation of the Rayon plant.
These pot motors are of very high speed and are specially designed for use in spinning frames for manufacturing rayon thread.
They run at 7700 RPM and are designed for a rated voltage of 130 V. at 130 cycles per second for use in circuits of less than 10 amps.
As such, these motors can in no circumstances be used for any other purpose excepting as stated above.
The accessories of these motors are specially designed to suit particular size of spinning pots as well as spinning chambers.
The smooth running of these motors is achieved after a great research by using flexible elastic and hollow shaft, special rubber bushings for support as well as specially designed bearings, to take care of severe stresses, 492 which are normally encountered by these motors during operation.
Hence, it is inevitable that any deviation in the design of the above component parts would mean defeating the purpose for which these motors are meant.
In view of the above, these motors cannot be classified other than an integral part of the Rayon Spinning plant.
We, therefore, claimed as assessment of duty under proviso 72(3) at the time of clearing.
" The appellants did not receive any reply from the Assistant Collector in regard to these representations for a period of about three years and hence they thought that their representations had been accepted and the demand for differential duty had been dropped.
This, however, turned out to be a vain hope, for seven communications dated 19th January, 1965 were received by the appellants from the Assistant Collector stating that the demand for differential duty in respect of each of the seven consignments was confirmed and would be enforced in due course if the differential duty was not paid by the appellants.
Each of those seven communications contained an intimation that "an appeal against this decision lies to the Appellate Collector within three months hereof".
The appellants, however, did not prefer an appeal to the Collector and instead tried to persuade the Assistant Collector to change his opinion by pointing out the relevant facts.
It appears that in the meantime the Assistant Collector recovered the aggregate amount of the differential duty from the deposit account of the appellants.
The appellants once again made a representation to the Assistant Collector and requested him to refund the amount of differential duty collected by him but the representation did not meet with any favourable response from the Assistant Collector.
The appellants ultimately filed a representation to the Collector on 15th July, 1965 setting out their case in regard to the assessment of customs duty and pointing out that the original assessment of customs duty made under Item 72(3) was correct and that the differential duty had been wrongly recovered from them.
This representation was treated by the Collector as a revision application against the orders of the Assistant Collector and on this application, the Collector made an order which was conveyed to the appellants by the Assistant Collector by his letter dated 23rd December, 1965.
The Assistant Collector pointed out that the Collector had: " examined the merits of the case in question and it is his consideration that the duty was correctly chargeable because the Spinning Machinery excluding the pot motors were being imported under one contract from Japan and the pot motors were being imported under another contract from Germany.
Separate importation under a separate contract from a separate country would not justify treatment of the two consignments as one article, when the goods are not specified 493 in the Tariff as one article.
Therefore, he does not see any reason to revise the Assistant Collector 's order concerning the demands.
" The appellants thereupon preferred a revision application to the Government of India, but by a short and pithy order dated 23rd September, 1967, the Government of India rejected the revision application stating that they had carefully considered the revision application B but saw no reason to interfere with the order passed by the Collector.
This led to the filing of the present appeal against the order of the Government of India with special leave obtained from this Court.
Though the appellants, initially, when the hearing of the appeal commenced, raised two or three contentions against the validity of the order of the Government of India confirming the demand for differential duty, they ultimately pressed only one contention and that related to the category in which the pot motors imported by the appellants fell.
The Assistant Collector originally assessed these pot motors to customs duty at the rate of 15 per cent of their accepted value under Item 72(3), but later, demanded differential duty from the appellants on the footing that these pot motors were really assessable at the rate of 20 per cent of their accepted value under Item 73(21) D. and this demand was confirmed by the Collector in revision and on further revision, by the Government of India.
The appellant disputed the correctness of these orders and contended that the original assessment made by the Assistant Collector was proper and the demand for differential duty was unjustified, because the correct item under which those pot motors were assessable was Item 72(3), and not Item 73(21).
Item 72(3), as it stood at the material time, was in the following terms: "72(3) Component parts of machinery as defined in Item Nos. 72, 72 ( 1 ) and 72 (2) and not otherwise specified, essential for the working of the machine or apparatus and have been given for that purpose some special shape or quality which would not be essential for their use for any other purpose but excluding small tools like twist drills and reamers, dies and taps, gear cutters and hacksaw blades: provided that articles which do not satisfy this condition shall also be deemed to be component parts of the machine to which they belong if they are essential to its operation and are imported with it in such quantities as may appear to the Collector of Customs to.
be reasonable.", while Item 73(21) comprised "Electric motors, all sorts, and parts thereof.
" The competition was between these two Items and the question is which of them covered pot motors imported by the appellant.
Now, pot motors imported by the appellants were clearly component parts of Rayon Spinning machines and this was not and indeed could not be disputed on behalf of the respondents.
Since Rayon Spinning machines were admittedly textile machinery as defined in Item 72(1), these pot motors were covered by the opening part of 494 Item 72(3), namely, "component parts of machinery as defined in Item Nos.
72 ( 1 ) ".
Moreover, these pot motors were clearly and indubitably essential for the working of the Rayon Spinning machines and, as pointed out by the appellants in their representation dated 8th December, 1961, they were "specially designed for use in spinning frames for manufacturing rayon thread" and for the purpose, they were given special shape and quality which was not only not essential for their use for any other purpose but actually rendered them incapable of being used for any other purpose.
This position, as pointed out by the appellants in their representation dated 8th December, 1961, was not disputed either by the Assistant Collector in his communication dated 19th January, 1965 or by the Collector in his order dated 23rd December, 1965 rejecting the representation of the appellants and the Government of India also did not controvert this position in its order dated 23rd September, 1967.
If the Assistant Collector or the Collector or the Government of India did not accept the facts set out in the representation of the appellants dated 8th December, 1961, we should have expected a clear statement to that effect in the orders of these authorities.
The Assistant Collector maintained sphinx like silence and preferred not to give any reasons for confirming the demand for differential duty.
The Collector was a little less reticent.
He briefly gave a reason for confirming the orders of the Assistant Collector, but that reason had nothing to do with the nature, quality or condition of the pot motors.
What it said was this, namely, that the pot motors were imported under a separate contract from Germany while the Spinning machinery excluding pot motors were imported from Japan and that did not "justify the treatment of two consignments as one article.
" The Government of India also did not articulate its reasons while rejecting the revision application of the appellants, but since it confirmed the order of the Collector, we may presume that the same reason which prevailed with the Collector appealed to the Government of India.
It will, therefore, be seen that at no stage was the factual position in regard to The pot motors, as set out in the representation of the appellants dated 8th December, 1971, disputed by the Assistant Collector of Customs or the Collector or the Government of India.
The pot motors, therefore, clearly fell within the description given in Item 72(3), The respondents, however, leaned heavily on the words "not otherwise specified" in item 72(3) and contended that even if the pot motors were component parts of Rayon Spinning machines, they were not covered by Item 72(3), since they were otherwise specified in item 73(21).
The argument of the respondents was that if any component parts of machinery were specifically dealt with in any other item, they would go out of Item 72(3) and since pot motors were electric motors within Item 73(21), they were not covered by Item 72(3).
This argument is clearly unsustainable.
It seeks to read the words "not otherwise specified" as qualifying "component parts" but that is plainly incorrect as a matter of both grammar and language.
Structurally, the conjunction 'and ' joins the two clauses "as defined in Item Nos. 72, 72(1) and 72(2)" and "not otherwise specified" and since the former qualifies 'machinery ', the latter also must be read as 495 doing the same duty.
What Item 72(3) contemplates are component parts of that machinery which is defined in Item Nos. 72, 72(1) and 72(2) and which is `not otherwise specified.
The words 'not otherwise specified ' do not qualify "component parts": they qualify machinery '.
Otherwise, the conjunction 'and ' would have no meaning.
In fact, the sentence would become ungrammatical if the words "not otherwise specified" were read to govern "component parts".
This construction also receives support from the description of the component parts which follows the words 'not otherwise specified '.
This description starts with the word `namely ', which shows that it is intended to be a complete description of the component parts covered by this item and that would not contextually fit in with "component parts not otherwise specified".
There can be no doubt that on a plain grammatical construction, the words "not otherwise specified" qualify "machinery" and not "component parts" and, there fore, the pot motors imported by the appellants, which satisfied the other requirements of Item 72(3) could not be held to fall outside that Item, because they were otherwise specified in Item 73(21).
Item 72(3) is a specific Item which covers these pot motors as against Item 73(21)which is a general item and hence it must be held that these pot motors were assessable under Item 72(3) and not under Item 73(21).
The original assessment of these pot motors made by the Assistant Collector was, in the circumstances, correct and the subsequent, demand of differential duty made by the Assistant Collector and confirmed by the Collector in revision and by the Government of India on further revision, was unjustified.
The orders made by the Assistant Collector, the Collector and the Government of India confirming the demand for differential duty would, therefore, have to be quashed and set aside and the amount of differential duty recovered from the appellants pursuant to these orders would have to be refunded to the appellants.
Before we part with this appeal, we must express our regret at the manner in which the Assistant Collector, the Collector and the Government of India disposed of the proceedings before them.
It is incontrovertible that the proceedings before the Assistant Collector arising from the notices demanding differential duty were quasi judicial proceedings and so also were the proceedings in revision before the Collector and the Government of India.
Indeed, this was not disputed by the learned counsel appearing on behalf of the respondents.
It is now settled law that where an authority makes an order in exercise of a quasi judicial function it must record its reasons in support of the order it makes.
Every quasi judicial order must be supported by reasons.
That has been laid down by a long line of decisions of this Court ending with N. M. Desai vs The Testeels Ltd. & Anr.
( ') But, unfortunately, the Assistant Collector did not choose to give any reasons in support of the order made by him con firming the demand for differential duty.
This was in plain disregard of the requirement of law.
The Collector in revision did give some sort of reason but it was hardly satisfactory.
He did not deal in his order with the arguments advanced by the appellants in their representa (1) C. A.245 of 1970 decided on 17th December.
496 tion dated 8th December, 1961 which were repeated in the subsequent representation dated 4th June, 1965.
It is not suggested that the Collector should have made an elaborate order discussing the arguments of the appellants in the manner of a court of law.
But the order of the Collector could have been a little more explicit and articulate so as to lend assurance that the case of the appellants has been properly considered by him.
If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative law, they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them.
Then alone administrative authorities and tribunals exercising quasi judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process.
The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law.
The Government of India also failed to give any reasons in support or its order rejecting the revision application.
But we may presume that in rejecting the revision application, it adopted the same reason which prevailed with the Collector.
The reason given by the Collector was, as already pointed out, hardly satisfactory and it would, therefore, have been better if the Government of India had given proper and adequate reasons dealing with the arguments advanced on behalf of the appellants while rejecting the revision application.
We hope and trust that in future the Customs authorities will be more careful in adjudicating upon the proceedings which come before them and pass properly reasoned orders, so that those who are affected by such orders are assured that their case has received proper consideration at the hands of the Customs authorities and the validity of the adjudication made by the Customs authorities can also be satisfactorily tested in a superior tribunal or court.
In fact, it would be desirable that in cases arising under Customs and Excise laws an independent quasi judicial tribunal, like the Income tax Appellate Tribunal or the Foreign Exchange Regulation Appellate Board, is set up which would finally dispose of appeals and revision applications under these laws instead of leaving the determination of such appeals and revision applications to the Government of India.
An independent quasi judicial tribunal would definitely inspire greater confidence in the public mind.
We accordingly allow the appeal, set aside the orders passed by the Assistant Collector, the Collector and the Government of India demanding differential duty from the appellants and direct the Government of India to refund to the appellants the amount of differential duty recovered from the appellants in respect of the seven consignments of 4000 pot motors imported by them.
The respondent will pay the costs of the appeal to the appellant.
P.B.R. Appeal allowed.

summary/full:
Under item 72(3) of the First Schedule to the Indian Customs Tariff, component parts of machinery as defined in item nos.
72, 72(1) and 72(2) aand not otherwise specified are chargeable to customs duty.
Item 73(21) comprises of "electric motors, all sorts, and parts thereof".
On the strength of a licence for importing "complete continuous filament Rayon Plant with spares and accessories" certain spinning frames excluding pot motors were imported from Japan but not motors were imported from Germany by the appellants.
The customs authorities accepted the claim of the appellants that the consignment of pot motors fell within item 72(3) and charged import duty accordingly.
Sometime later, the Assistant Collector of Customs, claiming that customs duty on pot motors was short levied as they fell within item 73(21) called upon the appellants to pay the difference, against which the appellants made a representation to the Assistant Collector.
But the Assistant Collector held against the appellants without giving any reasons.
The appellants thereafter filed a representation to the Collector but he held that since the spinning frames and the pot motors were imported under separate contracts from separate countries the two consignments could not be treated as one article and hence rejected the representation.
The appellants thereupon applied to the Government of India in revision but the revision application was also rejected.
Allowing the appeal to this Court.
^ HELD: (1) (i) Item 72(3) is a specific item covering pot motors as against item 73(21) which is a general item.
Pot motors were, therefore, assessable under the former and not under the latter.
The original assessment of the Assistant Collector was correct and the subsequent demand of differential duty which was confirmed by the Collector and the Government of India was unjustified (ii) Pot motors fell within the description given in item 72(3).
They were specially designed for use in spinning machines for manufacturing rayon thread.
and they were indubitably essential for the working of the rayon spinning machines and were incapable of being used for any other purpose.
They were, therefore, clearly component parts of the rayon spinning machines.
[495 D, 494A] (2 ) The argument of the respondents that if any component parts of machinery were specifically dealt with in any other item, they would go out of item 72(3) and since pot motors were electric motors within item 72(21) they were not covered by item 72(3) was clearly unsustainable.
As a matter of both grammar and language the words "not otherwise specified" cannot be read as qualifying "component parts".
They qualify "machinery".
Otherwise the conjunction "and" would have no meaning.
The sentence would become ungrammatical if the words "not otherwise specified" were read to govern "component parts".
The description of the component parts which follows the words "not otherwise specified" starts with the words "namely" which shows that it is intended to be a complete description of the component parts covered 490 by this item and that would also not actually fit in with component parts "not otherwise specified".
Therefore, pot motors could not be held to fall outside that item because they were otherwise specified in item 73(21).
[494H] (3)(a) Where an authority makes an order in exercise of a quasi judicial function it must record its reasons in support of the order it makes.
Every quasi judicial order must be supported by reasons.
[495G] M. M. Desai vs The Testeels Ltd. & Anr.
CA 245 of 1976, decided on 17th Dec. 1975, referred to.
(b) If courts of law were to be replaced by administrative authorities and tribunals and with the proliferation of administrative law, they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them.
The rule requiring reasons to be given in support of an order is like the principal of audi alteram partem, a basic principle of natural justice which must inform every quasi judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law.
[496B D] In the instant case the Assistant Collector did not give any reasons in support of his order which was in plain disregard of the requirement of law.
The reason given by the Collector was hardly satisfactory.
His order could have been a little more explicit and articulate so as to lend assurance that the case had been properly considered by him.
The Government of India too failed to give any reasons in support of its order rejecting the revision application.
[496 H] [The Court expressed the view that it would be desirable that in cases arising under customs and excise laws an independent quasi judicial tribunal is set up which would finally dispose of the appeals and revision applications under these laws instead of leaving the determination of such appeals to the Government of India.
An independent quasi judicial tribunal would inspire greater confidence in the public mind.] [496F]


judgement:
: Criminal Appeal No 219 of 1975 (Appeal by special leave from the judgment and order dated the 20th October, of the Andhra Pradesh High Court at Hyderabad in Criminal Misc.
Petition No 1890 of 1975) P B Basi Reddy, and AV V Nair for the appellants.
M R K Chaudhary and B K Kanta Rao for respondent No 1 525 P. Ram Reddy, and P Parameshwara Rao, for respondent Nos. 2 and 3 The Judgment of the Court was delivered by SARKARIA, J.
Whether in view of Clause (a) of the First Proviso to s, 22(1) of the Code of Criminal Procedure, 1973, a Magistrate who receives a complaint, disclosing an offence exclusively triable by the Court of Session, is debarred from sending the same to the police for investigation under section 156(3) of the Code, is the short question is that falls to be determined in this appeal by special leave.
The question arises in these circumstances: Respondent 1 herein made a complaint on July 26" 1975 before the Judicial Magistrate, First Class, Dharamavaram against the appellants herein alleging that.
On account of factions existing village Thippapalli the appellants formed themselves into an unlawful assembly, armed with deadly weapon, such as axes, spears and sticks, on the night of June 20" 1975 and entered the houses of several persons belonging to the opposite party, attacked the inmates and forcibly took way jewels, paddy, ground nuts and other valuables of the total value of two lakhs of rupees.
It was further alleged that the miscreants thereafter went to the fields and removed parts of machinery worth over Rs. 40,000/ , installed at the wells of their enemies.
On these facts it was alleged that the accused had committed offences under sections 147, 148, 149, 307, 395, 448, 378 and 342 of the Penal Code.
The offences under sections 307 and 395 are exclusively triable by the Court of Session.
The Magistrate on receiving the complaint forwarded ii to the Police for investigation with this endorsement: "Forwarded under section 156(3), Cr.
Procedure Code to the Inspector of Police, Dharmavaram for investigation and report on or before 5 8 1975.
" The appellants moved the High Court of Andhra Pradesh by petition under section 482 of the Code of Criminal Procedure, 1973 (which corresponds to section 561 A of the old Code) praying that the order passed by the Magistrate be quashed inasmuch as "it was illegal, unjust and gravely prejudicial to the petitioners".
The learned Judge of the High Court.
who heard the petition.
, dismissed it by an order dated October 20, 1975.
Hence this appeal.
Mr. Basi Reddy appearing for the appellants contends that the High Court has afield to appreciate the true effect of the changes brought by the Code of 1973.
According to the Counsel, under the new Code, is a complaint discloses an offence triable exclusively be court of Session, the Magistrate is bound to proceed with that complaint himself before issuing process to the accused.
The point pressed into argument is that clause (a) of the first Proviso to section 202(1), the new Code peremptorily prohibits the Magistrate, to direct investigation of such a complaint by the Police or any other person.
The cases, Gopal Da vs State of Assam(l),.
Jamuna Singh vs Bhadai She (2), referred to by the High Court are sought to be distinguished (1) (1961) A.I.R. 19(;1 section C. 986 (2) [1964] 5 S S.C.R. 37.
526 on the ground that they were decided under the old Code, section 21)2 of which did not provide for any such ban as has been expressly enacted in the 1st Proviso to section 202 of the new Code.
As against this, Mr. Ram Reddy, whose arguments have been adopted by Mr. Chaudahry, submits that the powers conferred on the Magistrate under section 156(3) of the Code are independent of his power to send the case for investigation under.
section 22 of the Code; that the power under section 156 (3) can be invoked at a stage when the Magistrate has not taken cognizance of the case while section 202 comes into operation after the Magistrate starts dealing with the complaint in accordance with the Provisions of Chapter XV.
It is urged that since in the instant case, the Magistrate had sent the complaint for police investigation without taking such cognizance section 202 including the ar enacted therein, was not attracted.
In the alternative, it is submitted that the ban in the 1st Proviso to section 202, becomes operative only when the Magistrate after applying his mind to the allegations in the com plaint and the other material" including the statement of the complainant and his witnesses, if any, recorded under section 200,, is prima facie satisfied that the offence complained of is triable exclusively by the Court of Session.
The point sough to be made out is that a mere allegation in the complaint that the offence committed is one exclusively triable by the Court of Session, does not oust the jurisdiction of the Magistrate to get the case investigated by the police or other person.
The word "appears" according to Counsel, imports a prerequisite or condition precedent, the existence of which must be objectively and judicially established before the prohibition in the 1st Proviso to section 202 becomes operative.
It is added that in the instant case,, the existance of this condition precedent was not, and indeed could not he established.
It appears to us that this appeal can be disposed of on the first ground canvassed by Mr. Ram Reddy.
Before dealing with the contention raised before us, it will be appropriate to notice the relevant provisions of the old and the new Code.
Section 156 of the Code of 1973 reads thus: "156(1).
Any officer in charge of a police station may, without the order of a Magistrate, investigate any cognizable case Which a Court having jurisdiction over the local area within the limits of such station would have power to inquire into or try under the provisions of Chapter XIII.
(2) No proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under this section to investigate, (3) Any Magistrate empowered under section 190 may order such an investigation as above mentioned.
" 527 This provision is substantially the same as section 156 of the Code of A 1898, excepting that in sub section
(1) for the words "Chapter XV relating to the place of inquiry or trial," the words "Chapter XIII" have been substituted.
Sections 200 and 202 of the 1898 Code and the 1973 Code, placed in juxtaposition, read as follows: 1898 Code section 200: A Magistrate taking cognizance of an offence on complaint shall at once examine the complaint and the witnesses present, if any, upon oath and the substance of the examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate: Provided as follows: (a) when the complaint is made in writing, nothing herein contained shall be deemed to require a Magistrate to .
examine the complainant before transferring the case under section 192; (aa) when the complaint is made in writing, nothing herein contained shall be deemed to require the examination of a complainant in any case in which the complaint has been made by a Court or by a public servant acting or purporting to act in the discharge of his official duties: (b) where the Magistrate is a Presidency Magistrate, such examination may be on oath or not as the Magistrate in each case thinks fit, and where the complaint is made in writing need not be reduced to writing.
but the Magistrate may, if he thinks fit, before the matter of the complaint is brought before him, require it to be reduced to writing; (c) when the case has been transferred under section 192 and the Magistrate so transferring it has already examined the complainant, the Magistrate to whom it is so transferred shall not be bound to re examine the complainant.
202 Postponement of issue of Process: (1) Any Magistrate, on receipt of a complaint of an offence of which he is authorised to take cognizance, or 1973 Code section 200: A Magistrate taking cognizance of an offence on complaint shall ex.
mine upon oath the complainant and the witnesses present, if any, and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate.
Provided that, when the complaint is made in writing, the Magistrate need not examine the complainant and the witnesses (a) if a public servant acting or purporting to act in the discharge of his official duties or a Court has made the complaint; or (b) if the Magistrate makes over the case for enquiry or trial to another Magistrate under section 192; Provided further that if the Magistrate makes over the case to another Magistrate under section 192 after examining the complainant and the witnesses, the latter Magistrate need not re examine them.
202 Postponement of Issue of process: (1) Any Magistrate, on receipt of a complaint of an offence which he is authorised to take cognizance or 528 which has been transferred to him under section 192, may, if he thinks fit, for reasons to be recorded in writing, postpone the issue of process for compelling the attendance of the person complained against, and either inquire into the case himself or, if he is a Magistrate other than a Magistrate of the third class, direct an inquiry or investigation to be made by any Magistrate subordinate to him, or by a police officer, or by such other person as he thinks fit for the purpose of ascertaining the truth or falsehood of the complaint; Provided that, save where the complaint has been made by a Court, no such direction shall be made unless the complainant has been examined on oath under the provisions of section 200.
(2) If any inquiry or investigation under this section is made by a person not being a Magistrate or a Police officer.
such person shall exercise all the powers conferred by this Code on an officer in charge of a Police station.
except that he shall not have the power to arrest without warrant.
(2A) Any Magistrate inquiring into a Case under this section may, if he thinks fit, take evidence of witnesses on oath.
(3) This section applies also to the police in the towns of Calcutta and Bombay.
which has been made over to him under sec.
192, may if he thinks fit, postpone the issue of process against the accused and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding: Provided that no such direction for investigation shall be made: (a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session; or (b) where the complaint has not been made by a Court, unless the complaint and the witnesses present (if any) have been examined on oath under Section 200. ` (2) If any inquiry under sub section (1), the Magistrate may, if he thinks fit, take evidence of witnesses on oath : Provided that if it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session, he shall call upon the complainants to produce all his witnesses and examine them on oath.
(3) If an investigation under sub section (I) is made by a person not being a police officer, he shall have for that investigation all the powers conferred by this Code on an officer incharge of a police station except the power to arrest without warrant.
Before proceeding further, we may have a look at section 190 of the new Code.
This section is captioned "Cognizance of offences by Magistrates".
This section so far as it is material for our purpose, n provides: "Subject to the provisions of this Chapter, any Magistrate of the First Class and any Magistrate of the second class specially empowered in this behalf may take cognizance of any offence (a) upon receiving a complaint of facts which constitute such offence; 529 (b) upon a police report of such facts; (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.
(2) . . . . . It is well settled that when a Magistrate receives a complaint, he is not bound to take cognizance if the facts alleged in the complaint, disclose the commission of an offence.
This is clear from the use of the words "may take cognizance" which in the context in which they occur cannot be equated with must take cognizance".
The word "may" gives a discretion to the Magistrate in the matter.
If on a reading of the complaint he finds that the allegations therein disclose a cognizable offence and the forwarding of the complaint to the police for investigation under section 156(3) will be conducive to justice and save the valuable time of the Magistrate from being wasted in enquiring into a matter which was primarily the duty of the police to investigate, he will be justified in adopting that course as an alternative to taking cognizance of the offence, himself.
This raises the incidental question: What is meant by "taking cognizance of an offence` ' by a Magistrate within the contemplation of section 190? This expression has not been defined in the Code.
But from the scheme of the Code, the content and marginal heading of section 190 and the caption of Chapter XIV under which sections 190 to 199 occur, it is clear that a case can be said to be instituted in a Court only when the Court takes cognizance of the offence alleged therein.
The was in which such cognizance can be taken are set out in clauses (a), (b) and (c) of Section 190(1).
Whether the Magistrate has or has not taken cognizance of the offence will depend on the circumstances of the particular case including the mode in which the case is sought to be instituted and the nature of the preliminary action, if any, taken by the Magistrate.
Broadly speaking, when on receiving a complaint, the Magistrate applies his mind for the purposes of proceeding under section 200 and the succeeding sections in Chapter XV of the Code of 1973, he is said to have taken cognizance of the offence within the meaning of section 190(l)(a).
If, instead of proceeding under Chapter XV, he has in the judicial exercise of his discretion, taken action of some other kind, such as issuing a search warrant for the purpose of investigation, or ordering investigation by the police under section 156(3), he cannot be said to have taken cognizance of any offence.
This position of law has been explained in several cases by this Court.
the latest being Nirmaljit Singh Hoon vs The State of West Bengal and anr(1).
The position under the Code of 1898 with regard to the powers of a Magistrate having jurisdiction, to send a complaint disclosing a cognizable offence whether or not triable exclusively by the Court of (1) ; 36 833SCI/76 530 Session to the Police for investigation under section 156(3)" remains unchanged under the Code of 1973.
The distinction between a police investigation ordered under section 156(3) and the one directed under section 202, has also been maintained under the new Code; but a rider has been clamped by the 1st Proviso to section 202(1) that if it appears to the Magistrate that an offence triable exclusively by the Court of Session has been committed, he shall not make any direction for in vestigation.
Section 156(3) occurs in Chapter XII, under the caption: "Information to the Police and their powers to investigate"; while section 202 is in Chapter XV which bears the heading "Of complaints to Magistrates".
The power It order police investigation under section 156(3) is different from the power to direct investigation conferred by section 202(1).
The two operate in distinct spheres at different stages.
The first is exercisable at the pre cognizance stage, the second at the post cognizance stage when the Magistrate is in seisin of the case. 'That is to say in the case of a complaint regarding the commission of a cognizable offence, the power under section 156(3) can be invoked by the Magistrate before he takes cognizance of the offence under section 190(1)(a).
But if he once takes such cognizance and embarks upon the procedure embodied in Chapter XV, he is not competent to switch back to the pre cognizance stage and avail of section 156(3).
It may be noted further that an order made under sub section (3) of section 156, is in the nature of a peremptory reminder or intimation to the police to exercise their plenary powers of investigation under section 156(1).
Such an investigation embraces the entire continuous process which begins with the collection of evidence under section 156 and ends with a report or chargesheet under section 173.
On the other hand section 202 comes in at a stage when some evidence has been collected by the Magistrate in proceedings under Chapter XV, but the same is deemed insufficient to take a decision as to the next step in the prescribed procedure.
In such a situation, the Magistrate is empowered under section 202 to direct within the limits circumscribed by that section, an investigation "for the purpose of deciding whether or not here is sufficient ground for proceeding ".
Thus the object of an investigation under section 202 is not to initiate a fresh case on police report but to assist the Magistrate in completing proceedings already instituted upon a complaint before him.
In the instant case the Magistrate did not apply his mind to the complaint for deciding whether or not there is sufficient ground for proceeding; but only for ordering an investigation under section 156(3).
He did not bring into motion the machinery of Chapter XV.
He did not examine the complaint or his witnesses under section 200, Cr.
P.C., which is the first step in the procedure prescribed under that Chapter.
The question of taking the next step of that procedure envisaged in section 202 did not arise.
Instead of taking cognizance of the offence he has.
, in the exercise of his discretion, sent the complaint for investigation by police under section 156.
531 This being the position, section 202(1), 1st Proviso was not attracted.
A Indeed, it is not necessary for the decision of this case to express any final opinion on the ambit and scope of the 1st Proviso to section 202(1) of the Code of 1973.
Suffice it to say, the stage at which section 202 could become operative was never reached in this case.
We have therefore in keeping with the well established practice of the Court, decided only that much which was essential for the disposal of this appeal, and no more.
For the foregoing reasons, we answer the question posed" in the negative, and dismiss this appeal.
M.R. Appeal dismissed.

summary/full:
On receiving a complaint against the appellants, for allegedly Committing offences under sections 147, 148, 307, 395, 448, 378 and 342, I.P.C., the Judicial Magistrate, F.C. Dharmavaram., forwarded it to the police under section 156(3) Cr.
P.C. for investigation The appellants filed an application in the High Court under section , against the Magistrate 's order, hut the same was dismissed.
it was contended before this Court that the complaint included offences triable exclusively by the Sessions Court, and under section 202(1) Proviso l(a), 1973, the Magistrate was prohibited from directing the police to investigate it, that he was bound to proceed with it himself before issuing process to the accused.
The appeal was, inter alia, contested on the ground that .
the powers conferred on the Magistrate under section 156(3) of the Code are independent of his power to send the case for investigation under section 2021 af the Code.
Section 156(3) can be invoked before the Magistrate takes congnizace of the case but section 202 comes into operation only after he start; dealing with the com Plaint in accordance with the provisions of Chapter XV.
Dismissing the appeal of the Court, ^ HELD: (1) The power to order police investigation under , 156(3) different from the power to direct investigation conferred by section '202(1). 'The.` two operate in distinct spheres at different stages.
The first is exercisable at the re cognizance stage, the second at the post cognizance stage when the Magistrate is in seisin of the case.
An investigation under section 202 is "for the purpose or deciding whether or not there is sufficient ground for proceeding".
its not to initiate a fresh case on police report, but to assist the Magistrate in completing proceedings already instituted upon a complaint before him.
The stage at which section 202 could become operative was never reached in this case.
[530 H; 531B] (2) When on receiving a complaint, the Magistrate applies his mind for the purposes of proceeding under section 200 and the succeeding sections in chapter XV of the Code of 1973 he is said to have taken cognizance of the offence within the meaning of section 190(l)(a).
If instead of ' proceeding under Chapter XV.
he has in the exercise of his discretion, taken action of some other kind, he cannot be said to have taken cognizance of any offence.
[526D G] Nirmaljit Singh Hoon .
The State West Bengal ond Anr.
[1973] 3 section ,53, referred to.


judgement:
Civil Appeal Nos.
1122 and 1123 of 1970 Appeals by special leave from the Judgment and order dated the 13th February 1970 of the Allahabad High Court in S.A. Nos. 267 and 268 of 1962.
520 section C. Manchanda, section K. Bagga, (Mrs.) Sureshta Bagga and (Mrs) Yash Bagga; for the Appellant.
R. N. Sharma and C. P. Lal; for Respondent.
The Judgement of the Court was delivered by CHANDRACHUD, J.
These appeals by special leave arise out of the judgment rendered by the High Court of Allahabad on February 13, 1970 in Second Appeals 267 and 268 of 1962.
Mahant Vishwa Nath Bharthi, the sarbrahkar of the temple of Shankarji Maharaj, Khowja, gave lands belonging to the temple, ad measuring about 44 acres, on Theka to one Sukai.
The Thekanama was executed on June 5, 1942 to be effective from July 1, 1942.
The lease was to enure for a period of 10 years and was due to expire on June 30, 1952.
The Thekanama contained an express term that the Thekadar will not sub let the leasehold property and that on the expiry of the period of lease he shall hand over the possession of the property to the lessor.
In spite of this term against sub letting, on July 27, 1942 the Lessee executed a power of attorney in favour of his nephews Haqiqullah and Ghani, apparently authorising them to cultivate the lands on his be half.
On the expiry of the period of lease the Mahant instituted a suit for ejectment of the lessee which was decreed on November 25, 1 952.
The Mahant then filed an application for executing the decree but an objection was raised thereto by the respondents, Sanaullah and Fakhrul Hasan who are respectively the brother and cousin of Haqiqullah.
They filed two separate applications objecting to the execution of the decree on the ground that they had been cultivating the lands for several years and that they were entitled to continue in possession as Sirdars.
On June 2, 1954 the objection raised by the respondents was allowed by the executing court which passed an order that the possession of the lands which on March 13, 1953 was given to the decree holder in execution of the decree should be re delivered to the respondents.
Accordingly, the respondents were put back in possession in July, 1954.
The lessor then instituted two separate suits under order XXI, Rule 103 of the Civil Procedure Code, the suit filed against Fakhrul Hasan being No. 17 of 1954 and the one against Sanaullah being No. of 1954.
His case was that the lands were given on lease to Sukai on condition that he shall not sublet them, that a decree for possession was accordingly passed against Sukai on the expiry of the lease and that the respondents had got their names entered fraudulently in the revenue record as the cultivators of the lands.
Respondents took up various inconsistent pleas in answer to the suits.
They contended that they were in possession of the lands with the consent of the original lessor.
that they had become hereditary 521 tenants and that they must be deemed to have become Adhivasis of the lands.
The learned Munsiff who tried the suits framed six issues, issue No. 2 being whether the respondents were Sirdars of the lands as alleged in paragraphs 17 and 18 of their written statements.
This issue was referred to the revenue court for decision.
The lessor having died during the pendency of those suits, the appellant was substituted in his placed as the Mahant of the Math.
The revenue court found in favour of the respondents and accepting that finding the trial court dismissed the suits.
In appeal, the District Court took the view that there was no justification for referring the particular issue to the revenue court and that the trial court ought to have decided all the issues for itself.
The District Court accordingly remanded the suit with a direction that the Munsiff should decide the suit afresh uninfluenced by the finding given by the revenue court.
The trial court then assessed the evidence, held the respondents and dismissed both the suits by its judgment dated November 17, 1961 The District Court reversed the findings of the trial court in appeal and held that the appellant, being the Bhumidar of the lands, was entitled to recover possession thereof from the respondents.
The appeals were accordingly allowed by the District Court by its judgment dated April 18, 1962.
The respondents filed Second Appeals Nos. 267 and 268 of 1962 against the decrees passed by the District Court.
The High Court having allowed those appeals the Mahant of the Math has filed these appeals by special leave.
The decision of these appeals involves a very narrow question as regards the power of the High Court in second appeal.
Section 10 of the Code of Civil Procedure provides to the extent that the appeal can lie to the High Court from a decree passed ill appeal by any court subordinate to it if the decision is contrary to law or to some usage having the force of law.
The only question for decision before the High Court was whether the respondents were entitled to the protection of section 20(b)(ii) of the U.P. Zamindari Abolition and Land Reforms Act, 1 of 1951.
That section provides, in so far as material, that every person who was recorded as an occupant of any land in the Khasra or Khatauni of 1356 Fasli but who was not in possession in the year 1359 Fasli shall be called an 'Adhivasi ' of the land and shall be entitled to retain possession thereof.
The names of the respondents were entered as occupants in the revenue record of 1356 Fasli but after considering the entire evidence, the District Court rejected those entries on the ground that they were fraudulent.
Thus, the only question before the High Court was whether the entries on which the respondents relied were genuine or fraudulent.
That is a question of fact and the High Court had no jurisdiction to set aside in second appeal the finding recorded on that question by the district Court.
522 The High Court assumed erroneously that the District Court had not given any finding on the question of fraud and on that assumption, it accepted mechanically the entries in the revenue record showing that the respondents were in possession of the lands as occupants.
The learned District Judge, by his judgment dated April 18, 1962 had gone in great details into the question whether the particular entries showing that the respondents were occupants of the land were genuine or fraudulent.
Those entries are Exs.
A 5 to A 12.
As pointed out by the learned Judge, the original lessee Sukai had migrated to Bombay after handing over the charge of the lands to his nephews who got the names of the respondents entered in the revenue record "surreptitiously".
The learned Judge points out that Fakhrul Hasan, who alone was examined on behalf of the respondents, was just a lad of 10 at the time when he is alleged to have entered into adverse possession of the lands.
Neither Sukai, who was the original lessee, nor Haqiqullah and Ghani who were said to : be cultivating the lands under a power of attorney executed by Sukai, were examined by the respondents.
The other respondent Sanaullah was not living in the village at all and is said to have been doing business in second hand spares in Bombay.
Haqiqullah was summoned by the appellant for producing the power of attorney dated July 27, 1942 and taking advantage of that opportunity the respondents cross examined him.
Haqiqullah, being a close relation of the respondents was only too willing to oblige them by giving pre conceived answers in the so called cross examination.
But the learned trial Judge overlooked that Haqiqullah was only summoned to produce a document and by reason of section 139 of the Evidence Act he could not become a witness in the case and could not therefore have been cross examined on the merits of the case.
But, even her considering the evidence of Haqiqullah the learned District Judge recorded a finding that "The entries were all fictitious".
He then proceeded to examine the documentary evidence in the case and held: "After a careful consideration of the pros and cons of the whole case I am of opinion that the Thekedar Sukai had I cultivated the sir and Khudkashi of the temple land which was given to him on Theka through his brother and his cousin, namely Haqiqullah and Ghani and these two per sons in order to create permanent rights in the Theka property, had fraudulently got the names of their boys entered , in the revenue records right from the inception.
I am also of the opinion that these by of the house hold never cultivated the land and they acquired no right, title or interest in the Theka land".
We find it quite difficult to understand how the High Court could hold that the District Court had not recorded any "clear finding" that the entries in the revenue record for the year 1356 Fasli were fraudulent.
Evidently, the attention of the High Court was not drawn to at least half a dozen reasons given by the District Court for holding that the entries were "fictitious" and were made "surreptitiously" and "fraudulently".
523 We could have even appreciated if, under section 103 of the Code of Civil Procedure, the High Court were to determine the issue whether the entries were fraudulent, if it though, wrongly though, that the District Court had not recorded a clear finding on that issue.
But the High Court did not discuss the evidence at all and chose instead to place a blind and easy reliance on the entries which are utterly uninspiring.
B It is true that the entries in the revenue record ought, generally, to be accepted at their face value and courts should not embark upon an appellate inquiry in to their correctness.
But the presumption of correctness can apply only to genuine, not forged or fraudulent, entries.
The distinction may be fine but it is real.
The distinction is that one cannot challenge the correctness of what the entry is the revenue record states but the entry is open to the attack that it was Made fraudulently or surreptitiously.
Fraud and forgery rob a document of all its legal effect and cannot found a claim to possessory title.
In Amba Prasad vs Abdul Noor Khan and ors.(1), it was held by this Court that section 20 of the U.P. Act 1 of 1.951 does not require proof of actual possession and that its purpose is to eliminate inquiries into disputed possession by acceptance of the entries in the Khasra or Khatauni of 1356 Fasli.
While commenting on this decision, this Court observed in Sonawati and ors.
vs Sri Ram and Anr.(2) that "the Civil Court in adjudging a claim of a person to the rights of an adhivasi is not called upon to make an enquiry whether the claimant was actually in possession of the land or held the right as an occupant: cases of fraud apart, the entry in the record alone is relevant".
We have supplied the emphasis in order to show that the normal presumption of correctness attaching to entries in the revenue record, which by law constitute evidence of a legal title, is displaced by proof of fraud.
For these reasons we allow these appeals, set aside the judgment li.
Of the High Court and restore that of the District Court.
The suits filed by the appellant shall stand decreed.
Respondents shall pay to the appellant the costs of these appeals in one set.
P.H.PAppeals allowed.
(1) ; (2) [1968] 1 S.C.R. 617, 620.

summary/full:
Entries in record of rights Presumptive value of Presumption if applies to forged or fraudulent entries Effect of fraud or forgery on a document.
Mahant Bharati of temple of Shankarji Maharaj gave lands belonging to the temple on Theka to one Sukai for a period of 10 years.
The Mahant obtained a decree for eviction against Sukai but it could not be executed because of the objections raised by the respondents on the ground that they have been cultivating the lands for several years and they were entitled to continue in possession as Sirdars in spite of the decree against Sukai.
The lessor, therefore, instituted two separate suits under order 21 Rule 103, C.P.C. Respondents contended inter alia, that they had become hereditary tenants and they must be deemed to have become Adhivasis of the land.
The trial court dismissed the suit.
The district court reversed the finding of the trial court in appeal and held that the appellant being the Bhumidar of the lands was entitled to recover possession thereof from the respondents.
The district Judge held that the entries in the record of rights showing the occupation of the respondents were fraudulent.
The High Court in second appeal upset the decree of the district court.
Allowing the appeal, ^ HELD: (1) The only question before the High Court was whether the entries on which the respondents relied were genuine or fraudulent.
This is as question of fact and the High Court had no jurisdiction to set aside the finding on that question in second appeal.
The High Court erroneously assumed that the district Court had not given any finding on the question of fraud.
The district Court had given at least half a dozen reasons for holding that the entries were fictitious and were made surreptitiously and fraudulently.
[521H; 522A H] (2) If the High Court thought that the district court had not recorded a clear finding on that issue and if the High Court were to determine under section 103 C.P.C. the issue under whether the entries were fraudulent or not it was necessary for it to discuss the evidence.
But, the High Court instead placed blind and easy reliance on the entries which are utterly uninspiring.
[523A B] (3) Entries in the revenue record ought generally to be accepted at their lace value and courts should not embark upon an appellate enquiry into the correctness.
But the presumption of correctness can apply only to genuine, not formed or fraudulent entries.
The distinction may be fine but it is real.
Fraud and forgery rob a document of all its legal effect and cannot found a claim lo possessory title.
[523B C]