ERIMMAL EBRAHIM HAJEE Vs. COLLECTOR OF MALABAR

JUDGEMENT

(1.) PETITIONER Ebrahim Hajee, admittedly an old man of about seventy, has applied by way of a writ of habeas corpus for his release from the central Jail, Cannanore, to which he was committed on 1st June, 1954, on a warrant of arrest issued by the Collector of Malabar under Section 48 of the madras Revenue recovery Act in respect of an income-tax arrear of Rs. 61, 668. The warrant under which the petitioner was arrested by the Tahsildar is in accordance with Section 48 and recites that the Collector had reason to believe that Ebrahim Hajee is wilfully withholding payment of these arrears and charges and has been guilty of fraudulent conduct to evade payment of them. Ebrahim hajee was given no hearing or any opportunity to show cause against the issue of the warrant. Nor does Section 48 of the Revenue Recovery Act provide for any procedure by which a defaulter imprisoned under that section can make any representation or file any appeal.

(2.) IN the affidavit filed on behalf of the Collector, who has been made the first respondent, details are set out of the history of the assessment of income-tax on petitioner who had a grocery business in Cannanore. According to a counter-affidavit by the Commissioner of INcome-tax, he was assessee in 1943-44 to a tax of Rs. 66, 227, in 1945-46 to Rs. 10, 752, 1946-47 rs. 5, 583, in 1947-48 Rs. 15, 002 and 1948-49 Rs. 4, 341. He is alleged to have disposed of substantial property and to have diverted assets from his cannanore business to an identical business in the name of his sons V. P. Abdul azeez and Bros. , which was started in Tellichery in 1948. We are not of course concerned in the disposal of this petition with the correctness of the assessment which we must regard as final. There is no order placed before us by the Collector setting out the material on which he was satisfied that petitioner was wilfully withholding payment and was guilty of fraudulent conduct. We may presume for the purpose of this petition that certain material was placed before the Collector by the INcome-tax authorities which led the collector into this belief. Before considering the application of Articles 14, 21 and 22 (2) of the Constitution, which Mr. Nambiar contends are contravened by Section 48 of the Madras Revenue recovery Act which is made applicable as a mode of tax recovery of income-tax by Section 46 (2) of the INdian INcome-tax act, it is both interesting, relevant and necessary to trace the history of debt recovery by attachment of the body and imprisonment of the debtor from 1864. Section 46 (2) of the INdian INcome-tax Act applies the very convenient machinery of land revenue arrear recovery to the recovery of income-tax and reads as follows : "the INcome-tax Officer may forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee, and the Collector, on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue : Provided that without prejudice to any other powers of the Collector in this behalf, he shall for the purpose of recovering the said amount have. . . . . . the powers which under the Code of Civil Procedure, 1908 (V of 1908), a civil court has. . . . . for the purpose of the recovery of an amount due under a decree".

(3.) IF this section is carefully examined, it in fact embodies the ingredients of what is in substance a criminal offence involving willful evasion of tax payment and fraudulent conduct, which are mattes for enquiry in a court of law with facilities afforded to the person accused to defend himself. We have been referred to several constitution decision, both in indian and American law, none of them directly in point. The learned Advocate-General and Mr. Nambiar for the petitioner have not been in a position to place before us the exact statutory position in the United States of America as regards executive power, if any, to commit to prison on grounds such as those under section 48 of the Revenue Recovery Act. It would, however, appear that in america there was also the same process of evolution though there it was far more rapid in the domain of imprisonment for debts, as in England. In a decision to which we have been referred, John Den v. Hoboken Land and improvement Co. , of the year 1855, proceedings were taken in the District Court against a Collector who collected rents and did not pay. He was sentenced to imprisonment and it was held that distress against the body was due process of law within the scope of Amendment V of the American Constitution which lays down that no one shall be deprived of life, liberty or property except under due process of law. We are unable to see how that decision referred to by the learned Advocate-General can in any way support the legality of the warrant issued by the Collector under Section 48 of the Revenue Recovery Act. In United state of America v. James M. Ragen and two Others three persons were tried with a jury by a District Court for wilfully attempting to evade or defeat income-tax. It would appear from this decision that this was an offence punishable with a fine up to $ 10, 000 or five years imprisonment. The Circuit court of Appeals reversed the judgment and conviction which were restored by the Supreme Court. It would appear from this decision that the grounds on which the Collector in this case before us committed the petitioner to prison without any hearing to undergo a sentence of two years or until he paid the tax due from him have in the United States of America been made a criminal offence triable by the ordinary courts of the land. We have not been referred to a single American decision by the learned Advocate-General in which executive order has deprived a citizen of his liberty, by committing him to prison on a warrant for wilful default of payment of taxes or fraudulent evasion. Mr. Nambiar's contention that this category of cases have been made punishable in the United States of America by trial in the ordinary ways through the courts with every opportunity given to the defaulter to defend himself and to show cause, appears to be correct. I have no hesitation in finding that Section 46 (2) of the Indian Income-tax Act is ultra vires in so far as it empowers a collector to proved under Section 48 of the Revenue Recovery Act, which clearly offends Article 22 (1) and (2) of the Constitution.