PURSHOTTAMDAS GOVINDJI HALAI Vs. B.M. DESAI

JUDGEMENT

(1.) The aasessee is the father of the petitioner and he was assessed to income -tax in the sum of Rs. 40,178 -4 -0. He failed to pay the amount, and on April 10, 1951, a certificate was issued by the Income -tax Officer certifying under Section 46(0) of the Indian Income -tax Act that this amount was due by the assessee, and the certificate was sent to the Collector who is respondent No. 1. On February 1, 1954, the Collector sent a notice of demand to the assessee. The assessee failed to pay the amount and thereupon the Collector issued a warrant of attachment on March 24, 1954. Proclamation of sale was issued on February 25, 1955, and on March 30, 1955, the Collector sold the properties of the assessee which had been attached, which were the tenancy rights and the goodwill in the firm of Indestro Sales and Service Company, of which the assessee was the sole proprietor. The sale did not realise the full amount which the assessee was liable to pay. On June 7, 1955, the Collector issued a notice upon the assessee to show cause why he should not be arrested. On June 17, 1955, the assessee showed cause, and not being satisfied with the cause that was shown by the assessee, the Collector on June 30, 1955, issued a warrant of arrest, and on July 1, 1955, the assessee was arrested and committed to civil jail. The petitioner as his son came to this Court for a writ of habeas corpus and a rule was issued by the Court, and the rule has now come up before us for final hearing.

(2.) INTERESTING and ingenious arguments were advanced by Mr. Shah to satisfy us that Section 46(2) under which action has been taken is unconstitutional and the action taken by the Collector cannot be justified. Section 46(2) provides that 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; and there is a proviso to this sub -section to this effect: 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, a Civil Court has for the purpose of the recovery of an amount due under a decree. It will be noticed that this is a procedural section and it lays down the procedure for recovering amounts of arrears due from an assessee. It does not impose any liability upon the assessee5 nor does it determine any liability. The liability to pay tax has been otherwise determined by the machinery provided in the Indian Income -tax Act. Section 46(2) only comes into operation after the liability has been finally determined and the assessee has no answer to the payment of arrears of income -tax, and the machinery which is provided is that these arrears may be recovered by the Collector from the assessee as if they were arrears of land revenue. They are to be recovered not by the Income -tax Authorities but by the Collector, but the Collector's jurisdiction to recover these arrears only arises on his receiving a certificate from the Income -tax Officer that a certain amount is due from the assessee, and the proviso gives the same powers to the Collector as a Court has under the Code of Civil Procedure to recover the amount of arrears.

(3.) BUT what is pointed out by Mr. Shah is that when you look at the Acts of other States for the recovery of revenue, you find different periods of imprisonment laid down for failure to pay land revenue. It is pointed out that under the Madras Revenue Recovery Act the maximum period provided is two years by Section 48, that under the Uttar Pradesh Land Revenue Act under Section 148 fifteen days is provided, that under the Punjab Land Revenue Act, 1887, under Section 69 one month is provided, and under the Central Provinces Land Revenue Act, under Section 130 the maximum sentence is three months, and what is particularly pointed out is that under the Assam Land Revenue Regulation No. 1 of 1886 the coercive machinery for recovering tax does not include the committing of the defaulter to civil imprisonment. On a comparison of these various 'laws the submission that is made is this that we are dealing with a Central Act, the Indian Income -tax Act, and that Act deals with defaulters who have failed to pay income -tax. They constitute one class and with regard to this very class there is a discrimination depending upon whether they are in Bombay, Madras, Uttar Pradesh, Punjab, Central Provinces, or Assam, as to what is the liability they would incur if they fail to pay income -tax. Mr. Shah says that a defaulter in Assam, though no rational distinction can possibly be made between him and his counterpart in Bombay, escapes scot free although he does not pay the tax, whereas in Bombay he may be committed to jail, as indeed the assessee in this base has been, and remain in jail for a period of six months. Therefore it is strenuously urged before us that such a provision clearly offends against Article 14 of the Constitution.