RAJENDRA MILLS LIMITED Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THESE four petitions are directed to challenge the validity of a notice issued to the respective petitioners under section 34(1A) of the Indian Income-tax Act. This section was introduced by the Amending Act XXXIII of 1954, and one of the points raised in these petitions is as regards the constitutional validity of this amending provision.

(2.) WE shall state a few preliminary facts before dealing with the contentions urged by the learned counsel for the petitioners. Rajendra Mills Ltd., Salem, are the petitioners in W.P. No. 307 of 1955, the Meenakshi Mills Ltd., at Madurai are the petitioners in W. P. No. 308 of 1955 while W. P. No. 309 of 1955 is by the Saroja Mills Ltd., Coimbatore, and these three mills are managed by Sri Karumuttu Thiagarajan Chettiar, who has a controlling interest in each of these three companies; and Sri Thyagarajan Chettiar as an individual is the petitioner in W.P. No. 310 of 1955. For the assessment years 1940-41 to 1946-47 the several petitioners were assessed to income-tax and they have been making payments towards the taxes as assessed, and appeals filed in regard to some of these assessments are pending before various Tribunals. While so, on or about the 4th of August, 1948, "the authorised official" under the Taxation on Income (Investigation Commission) Act, 1947, issued notices to the several petitioners, informing them that their cases had been referred to the Income-tax Investigation Commission under section 5(1) of the Act. Thereupon Messrs. Meenakshi Mills Ltd., the petitioners in W. P. No. 308 of 1955, filed an application before the Supreme Court under article 32 of the Constitution for quashing the proceedings before the Commission. The Supreme Court accepted the petition and holding that section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947, was ultra vires the Constitution directed a writ of prohibition, by its judgment on 12th October, 1954, to issue against the Commission proceeding further with the case. Meanwhile, as a result of the decision of the Supreme Court rendered on 28th May, 1954, in Surajmal Mohta v. Viswanatha Sastri the Indian Income-tax Act was amended by Ordinance VIII of 1954 published on 17th July, 1954, introducing a new sub-section (1A) into section 34 of the Act. This Ordinance was repealed and its operative provisions re-enacted by Parliament by Act XXXIII of 1954, which received the assent of the President on the 25th September, 1954; and it is the validity of the new sub-section 34(1A) that is impugned in these petitions.

(3.) PROVIDED further that no such notice shall be issued after the 31st day of March, 1956."