X Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is an application under Article 226 of the Constitution praying for a writ in the nature of mandamus commanding the respondents to pay the legitimate reward to the petitioner in pursuance of the announcement made and published in newspapers on 7/8. 11. 64 by the Chairman, Board of direct Taxes in press conference in regard to the inducement to bring cut black money. It was stated in that announcement that if there was voluntary declaration of concealed income, the Government would treat the people leniently and if the assessee cooperates with the Income-tax authorities, the levy of penalty and prosecution might be waived. There was a further announcement that the rate of rewards to those furnishing information about concealed income was being stepped up from 2. 5% to a minimum of 7. 5% of the extra tax realised as a result of the information supplied and in suitable cases this figure could be increased to 10%. This announcement, it appears, was published in all reputed newspapers in Bombay, Calcutta, Delhi, Ambala and other places. The petitioners case is that in pursuance of the said announcement he gave information in respect of evasion of taxes by several firms in the gunny market of Calcutta who are the members of East India Jute and Hessian exchange Ltd. , Calcutta, and requested the Commissioner to whom the information was supplied, to seize various books and papers in respect of the concealed income. The petitioner gave full co-operation with the assistance required of him by the Department and explained the modus operandi of evasion of taxes. Though the authorities of the department did not take prompt action and there was delay caused, as a result of information some firms disclosed their concealed income to the extent of Rs. 1. 88 crores. The petitioner on coming to know of the disclosure wrote to the Director of investigation and other Officers for reward and also contacted the commissioner of Income-tax, West Bengal for the same purpose. The Department made extensive raids on 31. 1. 1967 when again the petitioner gave full co-operation and as a result where of jewelleries worth lacs of rupees and cash worth lakhs of rupees with many forged documents and stamps were seized. The department, however, did not make any arrangement for payment of their promised reward and representations in writing and in person were made by the petitioner from time to time and on May 30, 1969 as also on August 18, 1969 the petitioner was informed that he and his colleague would not be eligible to any remuneration in respect. of several firms including. The petitioner received a sum of Rs. 12,500/-on 18. 11. 69 as an interim payment and made further representations pressing for final settlement of his claim. After continued but ineffective representations the petitioner protested against the refusal of the Department to pay the reward in respect of the firms, specially in regard to the firm of who had disclosed the concealed income of rs. 45 lakhs. But the Department by their letter dated 1. 8. 70 again informed that nothing was payable in respect of the said firm. On 4. 11. 70 the Central board of Direct Taxes informed the petitioner to contact the Commissioner of Income Tax, West Bengal, regarding further reward sanctioned by the Board for information supplied about the jute cases. The petitioner met the commissioner of Income-tax, West Bengal on 10. 11. 70 and on 18. 11. 70 and the commissioner offered the petitioner a further sum of Rs. 12,500/- in full and final settlement of his claim and further threatened that if no receipt was issued by the petitioner in full and final settlement of his claim, the said sum of rs. 12,500/- would not be paid to him. As the marriage of the petitioner's daughter was fixed on 30th December, 1970, the petitioner had no other alternative left but to accept the sum of rs. 12,500/- under coercion, duress and undue influence on 20. 11. 70. The petitioner issued a letter on the same date to Shri B. K. Bagchi, Commissioner of income-tax, West Bengal, I, stating that the said officer had compelled him to sign a clean receipt of final settlement by paying only Rs. 12,500/- which he denied completely (Annexure 'n' to the petition) as being in full settlement of his claim. This letter was followed by another letter on 21. 11. 70 addressed to Mr. H. A. Shah, Member, Central board of Director Taxes complaining that while the petitioner was asked to receive interim payment of Rs. 12,500/-, confidential instruction was issued to the Commissioner of Income-tax to take a clean receipt of final payment by paying the said amount, taking advantage of the acute financial difficulty the petitioner was suffering. The petitioner informed that this amount was not acceptable to him and he asked for justice.

(2.) IT appears that no steps were taken and the respondents-who are the union of India, Chairman, Central board of Direct Taxes, the Commissioner of Income Tax, No. 1, West bengal and one D. N. Malhotra, Income tax-Officer, Head Quarter, Hariyana, himachal Pradesh and Delhi had been refusing the legitimate rewards as per announcement made by the Chairman, board of Direct Taxes on 7/8. 11. 64 and thereby they acted malafide and in violation of fair play, equity and justice and contrary to the commitments made in the announcement as also in violation of the provisions of Article 53 and 299 of the Constitution of India. In the circumstances, the petitioner by the said application prayed for a writ of mandamus directing the respondents to pay the legitimate rewards to the petitioner in terms of the announcement of 8. 11. 64 and also to rescind the order dated 27. 8. 70 whereby the petitioner was informed that no amount was payable on account of the firm of. On this application the present Rule was issued on 24. 8. 71. It may be mentioned here that the paragraph 15 in substitution of the earlier paragraph of the Writ petition about second payment was inserted by amendment application filed on 2. 1. 73.

(3.) THE Rule was opposed by the respondents who filed an affidavit-in-opposition through C. R. Krishnamurthi, Commissioner of Income-tax, west Bengal II having jurisdiction over the relevant cases. It was stated in the affidavit that the application was not maintainable in law, bad for conjoiners of necessary parties and suppression of material facts. It was stated that the question relating to reward in the case of was finalised as early as in 1969 and the petitioner having waited for such a long time was guilty of serious laches and delay which entailed the dismissal of the application. It is further stated that the writ petition involved complicated questions of fact which should be tried in Civil Court. It was also stated that there was no violation of any fundamental right of the petitioner as guaranteed by the constitution nor there was any breach of statutory duty on the part of the respondents and as such, the application was not maintainable. It was further stated that adequacy of rewards ordered to be given by the respondents is not justiciable. Further, the petitioner accepted the sum of Rs. 12,500/- in full and final settlement of his claim and executed a receipt for the said amount and he could not be allowed to re-open the issue by way of writ petition on the ground that the receipt was executed under duress. Further, section 295 of the Income Tax Act, 1961, provides a bar of suit or other proceedings against the Government or officer for anything done in. good faith. The material allegations in the petition were denied except the correspondence which went on between the parties and the version about the search and seizure as given by the petitioner was also denied while the actual position, according to the respondents, was set out in the said affidavit. About allegations made in paragraph 15 it was stated that on receipt of the Board's instructions the petitioner was paid Rs. 12,500/- on his agreeing to receive the said sum in full and final settlement of his claim regarding the jute cases and after receipt of the amount he also gave a clean receipt of final settlement. It may be mentioned here that at the time of hearing the respondents had produced letter dated 20. 11. 70 issued by the petitioner agreeing to accept the said sum in full and final settlement of his claim. The respondents have also produced a carbon copy of a receipt of the said amount in full and final settlement of the petitioners claim and it was stated that the original receipt was with the Accounts Section. It was stated that there is nothing on record to indicate that the petitioner was made to sign the receipt under duress or coercion and the allegations made in respect thereof in the petition were denied. It was further stated that the petitioner having received the said amount should not be allowed to turn back and to claim further amounts to which he is not entitled. It was stated that the system of cash reward to the informer was particularly an administrative measure based on administrative instructions which does not confer any legal enforceable right on the informer and does not impose any legal obligation on the Income-tax Department. The petitioner accordingly is not entitled to any relief under Article 226 of the Constitution.