Sanvan Singh v. The State of Pu'lfa:b

Purshottam Govindji Halai v. Shri B. M. Desai, Additional Collector of Bombay, ( 1955) 2 S.C.R. 887, followed. Section 46(2) of the Indian Income Tax Act gives authority to the Collector to recover arrears of tax if it were an arrear of land revenue. Section 48 of the Madras Revenue Recovery Act read with s. 5 make it clear that the arrest of the defaulter is one of the modes by which · the arrears of land revenue can be recovered, to be resorted to if the said arrears cannot be liquidated by the sale of the defaulter's property. Such an arrest is not for any offence committed or a punishment for defau!ting in any payment. the defaulter Section 48 of the Madras Revenue Recovery Act does not require the Collector to give the defaulter an opportunity to be heard before arresting him. But the Collector must have reason to believe that is wilfully withholding payment or has .been guilty of fraudulent conduct in order to' evade payment.

Such belief must be based upon some material. which a Court may look into in appropriate cases. to find out if the conditions laid down in the section have been fulfilled. The Collector has also the power to release the defaulter if the amount due is paid. CRIMINAL APPELLATE JURISDICTION : Criminal ---<.· Appeal No. 145-A of 1954. 1957 Tht Collector of Malabar v. Erimal Ebrahim Hajee Imam J. ':l72 SUPREME COURT REPORTS [1957] Appeal under Article 132 ( 1) of the Constitution of India from the Judgement and Order dated July 23, 1954, of the Madras High Court in Criminal Miscella neous Petition No. 922 of 1954. Porus A. Mehta and R. H. Dhebar, for the appellants. B. Packer and B. K. B. Naidu, for the respondent. 1957. April 11. The Judgment of the Court was delivered by IMAM J .-The appellant obtained a certificate from the case the Constitution under Art. 132(1), in the .Madras High Court involved a substantial question of pretation of consequence of which the present appeal is before us. law as to the the effect filed a petition The respondent had the High Court under s.

491 of the Code of Criminal Procedure the nature of habeas corpus praying that directions in may be issued for his production before he dealt with according to law and for his release from imprison1nent. that Court income-tax The respondent had been arrested on June 1, 1954 issued on March 10, 1954 in pursuance of a warrant the Collector of Malabar under s. 48 of the Madras Revenue Recovery Act (Madras Act II of 1864) (here inafter referred to as the Act). The circumstances, as stated in the affidavits filed bv the Collector and the Income Tax Officer of Kozikh~de in the High Court, which led to the respondent's arrest, were, that he had been assessed various assessment years and the total amount of tax remaining outstand figures, was Rs. 70,000. ing against Some amount was the Collector issued by the Income Tax pursuance of a certificate Officer under s. 46(2) of Indian Income Tax Act and by the Income Tax Officer himself under s.

46(5)A the amount so realised the arrears of income-tax were about Rs. 61,668 and odd for Income Tax Officer had made 1948-49. Meanwhile the enquiries into the affairs of the respondent and had that he had sold certain properties of his discovered between November 18, 1947 and March, 25, 1948 to the assessment years 1943-44, 1945-46 the said Act. After deducting recovered by him, 1957 The Collector of Malabar v. Erimal EbiuJri,11 Hajce Imam}. S.C.R. SUPREME COURT REPORTS 973 tune of about Rs. 23,100. Demand notice had been served upon him on November 6, 1947 and series of transactions of sale started on November 18, 1947. Out of the said sum of Rs. 23,100, the respond ent paid arrears of tax to the extent of Rs. 10,500 only. Enquiries also revealed that although respondent had closed his business at Cannanore in August, 1947, he had set up a firm in 1948 at Tellichery carrying on an identical business in the name of V.P. Abdul Azeez four minor & · Bros. consisting of his one major and sons.

The respondent had alleged that the capital of this firm was mainly supplied from the sale of jewels belonging to his wife, that is, Abdul Azeez's mother. He denied that the above-mentioned firm belonged In the assessment proceedings before the him. Income the firm V.P. Abdul Azeez & Tax Officer concerning Bros., the source of these jewels was gone into, but it was found that the same had not been proved and was held that the business of V.P. Abdul Azeez & Bros. facts were respondent. All belonged Income Tax the Collector by communicated Officer who made for himself respondent was and had reason wilfully withholding payment of arrears of tax and had been guilty of fraudulent conduct in evading payment of tax. As a certificate had already been issued to him by the Income Tax Officer under s. 46(2) of the Indian Income Tax Act, the Collector proceeded under s. 48. issue a warrant of arrest against in consequence of which he was arrested respondent and lodged in Central Jail, Cannanore. independent enquiries the Act to to believe In the High Court, the petition under s.

491, Crimi nal Procedure Code, was heard by Mack and Krishna· swamy Nayudu JJ. which was allowed and respondent be set at liberty as his ordered arrest was illegal. Mack J. thought that s. 48 of the Act was ultra vires it offended Art. 22. He did not the Constitution as that s. 48 offended deal at length with the argument Art. 21 as he was of the opinion that if that section was ultra vires, then respondent had not been arrested in accordance with procedure established by 1957 TM Collector of Malabar v. Erim:1l Ebrahim Hajte Imam]. 974 SUPREME COURT REPORTS [1957] law and his arrest and imprisonment had seen unlawful. On the other hand, if s. 48 was intra vii-es the Consti tution, then the respondent had been lawfully deprived further of the opinion of his personal liberty. He was that s. 46(2) of the Indian Income Tax Act was ultra vires as it offended Art. 14 of the Constitution. the opinion Krishnaswami Nayudu J. was of Indian Income Tax Act read with s.

48 s. 46(2) of the of the Act offended Art. 14 of the Constitution. He was of the opinion the Act offended that s. 48 of Art. 21 of the Constitution to the extent that it afforded no opportunity to the arrested person to appear before the Collector by himself or through a legal practitioner of his choice and to urge before him any defence open to him and that it did not provide for the production of the arrested person within 24 hours before a magis trate as required by Art. 22(2). Relying upon decision of this Court in A. K. Copa/an v. The State of Madras ( 1 that the contention that the provisions of Art. 21 had been infringed did in so far as not require serious consideration because there was a law on the statute book on which Collector had acted that would be sufficient to support the legality of the action taken by the Collector. ), he was of the opinion it was contended the Act nor s. 46(2) of On behalf of the appellant, neither s.

48 of Indian Income Tax Act was in violation of Arts. 14, 19, 21 and 22 of the Constitution. Section 46(2) of the Indian legislation and Income Tax Act was a valid piece of under its provisions the Collector was authorised recover the arrears of income revenue on Income Tax Officer. receipt of a certificate On behalf of Indian Income Tax these sections of the Act and the Act <li<l offend Arts. 14, 19, 21 and 22 of the Consti It was further contended that on a proper tution. Indian Income Tax interpretation of s. 46(2) of the Collector on receipt of Act the authority given to Income Tax, Officer was to the certificate from Income tax, but there recover the amount of arrears of the Collector to arrest was no authority it was contended the respondent thereunder from the tax as (') (1950) S. C.R. 88. 1957 The Co/ltctor of Malabar Erimal Ebrahim Hajee Imam J. S.C.R. SUPREME COURT REPORTS 975 indicate the Act would section could the defaulting assessee.

Even if the. said be interpreted to give the power of arrest, arrest could only be made under s. 48 of the Act. A proper reading that the defaulter of s. 48 of should be given an opportunity to be heard in his defence, previous to a warrant of arrest being issued against him, as the same could only issue if the Collector to believe that the defaulter was wilfully had reason withholding tax or had been guilty of the arrears of fraudulent conduct in order to evade payment. Such :a belief could not be entertained by the Collector without first giving the defaulter an opportunity to be issued heard. The warrant of arrest respondent without hearing him in his defence was the respondent was illegal.. the arrest of invali<l and further drew The learned Advocate for tl)e respondent there was no fact that in s. 48 our attention the defaulter if he paid up provision for the the :irrears of revenue. What we have outset, is, whether either s.

48 of the Act or s. 46(2)" of Income Tax Act or both offend Arts. 14, the Indian 19. 21 and 22 of the Constitution. The decisions of this Court in Gopalan's case, in The State of Punjab v. Ajaib Singh . ( 1 ) and in Purshottam Govindji Halai v. Shree B. R. Desai, Additional Collector of Bombay ( 2 ) are to be borne in mind in deciding this question. this · appeal, at to consider release of against to the right "to move territory of It was heid by the majority of the . learned Judges freely in Gopalan's case throughout India" referred to in Art. 19 (l) ( d) of the Constitution was but one of the many attributes included the concept of the lawfully liberty" and when a person. is "personal deprived of his personal liberty without offending Art. 21, he cannot rights ~ranteed by sub-els. (a) to (e) and (g) of Art. 19(1), those rights can only be exercised by a freeman. In that sense, therefore, Art. 19 (1) (d) has to be read as controlled by the provisions of Art; 21, and view that Art.

19 guarantees the substantive right and Art. 21 prescribes a procedural protection is incorrect. exercise any of claim to {I) [1953] S. C. R. 254 (2) .[ 1955 j 2 S. C.R. 887 1957 T /,,, Col!tttor of Ma/abat v. Erirrta/ Ebrahim Imam]. 976 SUPREME COURT REPORTS [1957] for all lawfully under Art. 31, the right The decision in Gopalan's case has been followed in this Court in a series of cases and that decision must now be taken as having settled once personal rights guaranteed by sub-els. (a) to (e) and (g) of Art. 19( 1) are in a way dependent on the provisions of Art. 21 just as the right guaranteed by sub-cl. (f) of Art. 19 ( 1) is subject to Art. 31. If the property itself to hold or is taken it and Art. 19 (i) (f) cannot dispose of it perishes with be invoked. Likewise, if life or personal taken away lawfully under Art. 21 no questior. of the exercise of fundamental rights under Art. 19 (1) (a) to (e) and (g) can be raised.

Under Arr. 21 "Procedure law" means procedure enacted by a established by the Union the State, law made by In the Legislatures of the States. Parliament or appeal before us, therefore, is the principal question, whether respondent was deprived of his personal in accordance with a procedure established by liberty law, i.e. a valid law. If the then he has that situation, he cannot complain of the infraction rights mentioned in Art. 19 of any of the fundamental (1) (a) to (e) or (g). lawfully deprived of his personal liberty and, to say, is valid liberty In Ajaib Singh's case, a person wa~ taken custody by the police a.'1d sent to the Ollicer-in-<:harge nearest camp under s. 4 of the Abducted (Recovery and Restoration) Act (Act LXV of Persons 1949) and it was submitted that the said Act contra vened the provisions, inter alia, of Art. 22 of the Consti to be tution. None of these submissions were It was held, so far as Art.. 22 is concerned, vaild. that the taking into custody was not arrest and deten tion within the meaning of Art.

22. Krishnaswami Nayudu . J. in his to distinguish the decision. With respect learned Judge the principle emerging out of the decision in Ajaib Sitigh's case appears to us enough. The decision did not attempt to lay down in a precise and meticulous fundamental manner rights or the protection of Art. 22. What was come within scope and ambit of to enumerate exhaustively judgment, attempted to be clear the cases to the S.C.R. SUPREME COURT REPORTS '177 taking that person commission by laid down was into custody without. clearly the physical restraint put upon an abducted person in the process of recovering allegation or accusation of any actuai or suspected or apprehended person of any offence of a criminal or quasi-criminal nature or of any act prejudicial to the State or the public interest. can not be regarded as an arrest or detention within the meaning of Art. 22. the present case, the arrest was not in connection with any alle~ation or accusation of any actual or suspected or apprehended commission of any offence of a criminal or quasi-criminal nature. for a civil debt in the process It was really an arrest or the mode prescribed by law for recovery of arrears of land revenue.

In 1957 The Coll eclor of Malabar v. Erimal Ebrahitrt Hajee Imam]. issued for there was no violation of Art. 21 of In Purshottam Govind;i Halai's case, the Bombay Land Revenue Act 1876 this Court Constitution where a person had been arrested under s. 13 of recovery pursuance of a warrant of arrest of the demand certifien under s. 46(2) or the Indian Income Tax Act, which did not offend Art. 14 of the Constitution, inasmuch as such arrest was under a procedure established hy law, is to say, s. 13 of established by constituted a procedure the said Act law. Mr. Pocker. however. attempted to distinguish the case. because this Court was dealing with s. B of the Bombay Act. The grounds stated that case for declaring that s. 46(2) of Indian Income Tax Act was not ultra vires the Constitution, as it did not offend Art. 14, are equally applicable the present case and we can find no true principle upon which we can distinguish that case from the present one.

In . our opinion. having the previous decisions of this Court referred to above, neither s. 48 of the Act nor s. 46(2) of .the Indian Income Tax Act violates Arts. 14, 19, ::!l and 22 of the Constitution. regard· to to consider We now proceed interpretation to be put by Mr. Pocker on s. 46(2) of the sought Indian Income Tax Act and s. 48 of the Act. He contended that s. 46(2) of the Indian Income Tax Act merely authorised the Collector to recover the amount 1957 .. T ii< Co/Lui"' ef . Malabar Erimal Ebrahim Hajee Imam] 978 SUPREME COURT REPORTS (1957] recovered. It reads, to arrest in arrear, the manner respondent. He .We are unable to accept of .. arrears of Income Tax, but it did not give him any submitted authority that the act of arrest was not a mode of recovery of it· was a ·punishment for failure the arrears of tax, but interpretation. to pay. The authority given to ·the Collector by this section is to recover the arrears of tax as if it were an arrear of the Act clearly states land revenue. · The preamble of the collection of the public that the laws relating should be consolidated and simplified and s.

5 revenue the arrears of provides in which "Whenever revenue may it shall be lawful for the revenue may be Collector, or other officer empowered by the Collector in that behalf, to proceed to recover the arrear, together the sale of the with interest and costs of process, by defaulter's movable and immovable property, or by execution against the person of the defaulter in manner hereinafter provided. " This section clearly sets out the mode of recovery of arrears of revenue, that is the movable or immovable say, either hy the sale of property of the defaulter, or by execution against his person in the manner provided by the Act. Section 48 revenue cannot be provides the sale of the property of the defaulter liquidated by then the Collector, if he has reason to believe that the defaulter arrears or has been guiltv of fraudulent conduct in lawfully cause the order to evade payment of tax, can arrest and imprisonment of the defaulter.

This section read with is one of the modes, by which arrest of recovered, to be resorted the arrears of revenue can be to if the said arrears cannot be liquidated by the sale of the defaulter's property. There is not a suggestion the arrest is by way of in the entire section that the Collector punishment for mere default. Before the defaulter, not merely must can proceed that the arrears cannot be the condition be satisfied the property of the defaulter liquidated bv but the Collector shall have reason to believe that defaulter is wilfullv withholding payment, or has been to evade guilty of s. 5. makes the defaulter is wilfully withholding that when arrears of it abundantly clear payment of the sale of fraudulent to arrest conduct 1957 T/18 Collector of Malabar v. Erimal Ebrahi11t Haju Imam J. S.C.R. SUPREME .·COURT REPORTS 979 reasori is wilful, or its severest form, the defaulter has in order the supposition payment.

When dues in the shape of money· are to be realised by the pro<:ees of law . and not by voluntary payment, the element of ·· coercion in varying degrees must necessarily be found · at all stages in the morle of coercive element, recovery of the money due. The the act of arrest ·in perhaps in order to make the defaulter pay his dues. When to believe that withholding of Collector has payment guilty of fraudulent conduct to evade pay ment, obviously, is on defaulter can make the payment, but is wilfully with~ holding it, or is In the Act there are seve:al sections (e.g. ss. 16, 18 and language, ·punish 21) which prescribe. in unambiguous It is clear, ment to be inflicted for certain acts done. intends therefore, that where impose a punishment or to create an offence, it employs a· language entirely different to that to be found in s. 48. We are of the opinion. therefore,· that where an arrest is made under s.

48 after complying with ·. its . pro visions, the arrest is not for any offence committed or a · payment .. · The defaulting in any punishment mode of arrest is .. no more · than a mode for recovery of the amount due. evading payment. fraudulently the Act · There is nothing in s, 48 of the Act which .· requires the Collector · to give the defaulter an opportunity be heard before arresting him .. • It is . true Collector musthave reason to believe that the defaulter is wilfully withholding_ payment or has been guilty of fraudulent · conduct in order to evade payment. The Collector, therefore. must have some material upon which he · bases his bdief~a belief whieh must be rational - belief...:_and material in appropriate cases the conditions the section have been · fulfilled or not.: Ftotn the affidavits filed in the High . Court by .the Collector and the Income Tax Officer it is quite clear that there wa.~ material upon which that the respondent was Collector could base his belief the arrears. of · wilfully .withh(>lding payment ·· of · arid had been gtiilty of fraudulent conduct in order to a . court may In . order laid down- to find out 1957 T h1 Coiled or of Malabar v.

Erimal Ebrahim Hqju Imam J. 980 SUPREME COURT REPORTS [1957] evade payment. The Collector was, in arresting the respondent. therefore, justified It was helcl the Collector the arrears, but it is is not an alternative the proviso the Collector but only As pointed out by Mr. Pocker, s. 48 of the Act d~ the defaulter if not in terms provide for the release of he pays up to be remembered that in addition to the powers under s. 48 of the Act, the Collector has. under the proviso to s. 46(2) of the Indian Income Tax Act, similar powers to that which a Civil Court has for recovery of an amount due under in Purshottam Go11indji Halai's a decree. remedy confers additional the better and more powers on effective application of recovery authorized by sub-sec. (2) of s. 46 of the Indian Income Tax Act. Under s. 58 of the Civil Procedure Code a judgment debtor if the Ci vi! Court must release paid. Accordingly, the Collector has amount due is the power to release the defaulter if the amount due the submission of is no substance paid and the learned Advocate.