BASHESHAR NATH versus THE COMMISSIONER OF INCOME-TAX, DELHI & RAJASTHAN & ANOTHER.

Citation: [1959] SUPP. 1 S.C.R. 528 · Decided: 19-11-1958 · Supreme Court of India · Bench: SUDHI RANJAN DAS · Disposal: Appeal(s) allowed

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Judgment (excerpt)

November 19. 
528 
SUPREME COURT REPORTS [1959] Supp. 
BASHESHAR NATH 
ti. 
THE COMMISSIONER OF INCOME-TAX, 
DELHI & RAJ ASTHAN & ANOTHER. 
(S. R. DAS, c. J., N. H. BHAGWATI, s. K. DAS, 
J. L. KAPUR a.nd K. SUBBA RAO, JJ.) 
Income-tax-Evasion of taxation-Case referred tq Investigatio11 
Commission-Comme11cement of the Constitution-Settlement of case 
-·-Constitutional, validity of-Waiver of fundamental right, if permis-
sible-Taxation of Income (Investigation Commission) Act, I947 
(.JO of' I947l. s. BA-Constitution of India, Art. I4, Part III. 
The two questions for determination in this appeal were, (r) 
whether a settlement under s. SA of the Taxation of Income (In-
vestigation Commission) Act, 1947 (30 of 1947) made after the 
commencement of the Constitution was constitutionally valid and 
(2) whether the waiver of a fundamental right was permissible 
under the Constitution. The appellant's case was on July 22, 
194S, referred by the Central Government under s. 5(r) of the 
Act to the Investigation Commission for investigation and report. 
The Commission directed the authorised official under s. 6 of the 
Act to examine the appellant's accounts. He submitted his final 
report by the end of 1953· The Commission considered the report 
heard the assessee and came to the conclusion that Rs. 4,47,915 
had escaped assessment. Thereupon the appellant on May 20, 
r954, applied to the Commission for a settlement of his case 
under s. SA of the Act, agreeing to pay Rs. 3,50,000 by way of "' 
tax and penalty at the concessional rate. The Commission re-
ported to the Central Government approving of the settlement, 
the Central Government accepted it and it was recorded by the 
Commission. The Central Government directed the recovery of 
the said amount under s. SA(2) of the Act. The appellant was 
permitted to make payments by monthly instalments of Rs. 5,000 
and the total amount thus paid up to September S, 1957, aggre-
gated to Rs. I,2S,ooo. In the meantime the Income Tax Officer 
issued a certificate and certain properties of the appellant were 
attached. Relying on the decisions of this Court in Suraj Mall 
Mohta and Co. v. A. V. Visvanatha Sastri, [1955] 1 S.C.R. 448 and 
M. Ct. Muthiah v. The Commissioner of Income-tax, Madras, [1955] 
2 S.C.R. 1247, the appellant applied to the Commissioner of 
Income-tax challenging the validity of the settlement made under 
s. SA of the Act on the ground that s. 5(r) of the Act on which 
it was founded had been declared void by this Court, and claimed 
that his properties might be released from attachment and the 
amount paid under the settlement might be refunded to him. On 
January 29, 195S, the Commissioner of Income Tax sent a reply 
to the appellant maintaining that the settlement was valid and 
(1) S.C.R. 
SUPREME COURT REPORTS 
529 
that the appellant was bound thereunder to pay up the arrears 
z95a 
of instalments and requesting him to continue to pay in future. 
Against this decision of the Commissioner of Income Tax the Bashesha, Natlt 
appellant came up to the Supreme Court by special leave. It was 
v. 
contended on behalf of the respondent that the Act laid down The Commissioner 
two distinct and separate procedures, one for investigation and of Income-ta,,, 
the other for settlement and it was the former alone and not the Delhi & Rajaslhan 
latter that was affected by the decisions of this Court and that 
& Another 
the appellant by voluntarily entering into the settlement had 
waived his fundamental right founded on Art. 14 of the Constitu-
tion. 
Held (Per Curiam), that both the contentions must fail. 
It was not correct to say that the Taxation of Income (In-
vestigation Commi&sion) Act, 1947, laid down two different 
procedures, one for investigation and assessment under s. 8(2) of 
the Act and another for settlement under s. SA of the Act and 
assessment in terms of such settlement and that while the deci-
sion of this Court in M. Ct. Muthiah v. The Commissioner of Income-
tax, Madras, declaring s. 5(1) of the Act to be discriminatory and 
therefore void, affected only the former procedure and not the 
latter. The Act laid down but one procedure and in entertaining 
a proposal for settlement as in the investigation itself the Com-
mission exercised the same jurisdiction, and powers and followed 
the one and the same procedllre as laid down by ss. 5, 6 and 7 of 
the Act. Since the settlement in the instant case was no excep-
tion to that rule, it was covered by th

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