BASHESHAR NATH Vs. MODEL KNITTING INDUSTRIES LIMITED

JUDGEMENT

(1.) THE following Judgments of the court were delivered by

(2.) THIS appeal by special leave filed by one Shri Besheshar Nath hereinafter referred to as `,the assessee ` calls in question the validity of a settlement made under s. 8A of the Taxation on Income (Investigation Commission) Act, 1947 (30 of 1947), hereinafter referred to as ` the Investigation Act `. THIS Act, which came into force on 1/05/1947, by a notification issued by the central government under s. (1) (3) thereof, has had a short but chequered career, as will appear from the facts hereinafter stated.

(3.) IN the meantime the INcome Tax Officer had sent a certificate requesting the Collector of Delhi for the recovery of the balance due by the assessee under the settlement. IN execution of that certificate some of the properties belonging to the assessee situate in Dharamsalla and Hissar were attached. On 27/12/1957, the assessee made an application to the INcome Tax Commissioner. After pointing out that between 5/07/1954, and 27/12/1957, the petitioner had paid in all Rs. 1,28,000.00 towards the-' discharge of his liability under the settlement and referring to the decisions of this court in suraj Mall Mohta's case (1) and Muthiah's case (2) the assessee submitted that the settlement under a. 8A of the INvestigation Act had no force and did not bind the petitioner and that the settlement had been made under the pressure of the situation and in view of the coercive machinery of the INvestigation Act and that from either point of view the settlement was not binding. His contention was that when s. 5(1) of the INvestigation Act had been held unconstitutional the settlement under s. 8A could not be enforced, for the foundation of the proceedings under s. 8A was the reference under s. 5(1) and the foundation having crumbled down the superstructure must fall with it. Under the circumstances the assessee submitted that the attached properties be released and the amount already recovered under the settlement be refunded. On 29/01/1958, the INcome Tax Commissioner sent the following communication to the assessee:- No. L-228(l)/54-55/17590 Office of the Commissioner of INcome Tax, Delhi and Rajasthan, New Delhi. Dated, New Delhi the 29/01/1958. Shri Besheshar Nath, 9, Barakhanaba Road, New Delhi. Dear Sir, Sub :-Taxation on INcome (INvestigation Commission) Act, 1917 Order u/s 8A(2) Your petition dated 27/12/1957. With reference to your petition dated 27/12/1957, regarding the settlement arrived at under section 8A(2) of the Taxation on INcome (INvestigation Commission) Act, 1947, I am to inform you that the settlement is valid and binding on you. 2. You are, therefore, requested to make good arrears of instalments which you have not paid recently by 5/02/1958, and also to continue making the payments in accordance with the instalments scheme agreed to, failing which the recovery proceedings will be vigorously pursued through the usual recovery channels. Your's faithfully, Sd./S. K. Gupta, Commissioner of INcome-tax, Delhi & Rajasthan, New Delhi. Being aggrieved by the above decision the assessee thereupon moved this court and obtained special leave to appeal against that order. The appeal has now come up for final disposal before us.