LexBIDI SUPPLY CO. versus THE UNION OF INDIA AND OTHERS.
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S.C.R. SUPREME COURT REPORTS BID! SUPPLY CO. v. THE UNION OF INDIA AND OTHERS. 267 [S. R. DAS, C.J., VIVIAN BOSE, BHAGWATI, JAGAN- NADHADAS and B. P. SINHA, JJ.] Constitution of India, Art. 14-Ifl,dian Income Tax Act, 1922 (XI oJ 1922), ss.5(7-A), 64(5)(b) as amended lYy Indian Income Tax (Amendment) Act, 1940 (Act XL of 1940)-Whether ultra. vires the Constitution-Transfer, Order of-B'll Central Board of Revenue under s. 5( 7-A)-Transferring assusment proceeding of petitioner from Calcutta to Ranchi-Without notice to petitioner and without giving it opportunity to make representation against such decision-Consti- tutionality of-Assessee, rights of-Under s. 64 of the Act. The petitioner-a. registered firm-has its head-office in Calcutta. where its books of account a.re kept a.nd ma.inta.ined a.nd where it he.s its banking account, the members of the firm being citizens of India. Since its inception the firm has a.11 a.long been assessed to income-tax by the Inoome-Ta.x Officer, District III, Ca.lcutta.. The assessments for the yea.rs 1948-49 a.nd 1949-50 were ma.de by the Income Tax Officer, District III, Calcutta.. Notices under s. 22(2) of the Income Ta.x Act were issued to the petitioner by the Income- Tax Officer, District ill, Calcutta. to submit returns for the yea.rs 1950-51, 1951-52, 1952-53, 1953-54a.nd1954-55. The Income Ta.x Officer, District ill, Calcutta. ma.de assessment for the yea.r 1950-51 on 18-12-1954 being sa.tisfied tha.t the principa.l place of business of the petitioner wa.s in Ca.Icutta.. On the 25th Ja.nua.ry 1955 the petitioner received a. letter from the Income-Ta.x Officer, District ill, Calcutta. that in }>Ursua.nee to orders de.tad 13th December 1954 under s. 5(7-A) of the Income- Ta.x Act its assessment records were tra.nsferred from that office to the Income Ta.x Officer, Specie.I Circle, Ranchi with whom the peti- tioner wa.s to correspond in future rega.rding its a.ssessment v.roceed • ings. The order sta.ted tha.t the Central Boa.rd of Revenue 'hereby transfers the case of'' the petitioner. The petitionBr ha.d no previ· ous notice of the intention of the Income·Ta.x a.uthorities to tra.ns!er the a.ssessment proceedings from Ca.lcutta. to Ba.nchi nor ha.d it a.n opportunity to ma.ke a.ny representa.tion a.gs.inst su<lh decision. When • ca.lied upon to submit its return for the assessment year 1955·56 the petitioner by a.n a.pplica.tion under Art. 32 of the Co~stitution con· tended that sub-section (7-A) of s. 5 of the India.n Inoom-Ta.x Act, 1922 a.nd the order of tra.nsfer ma.de thereunder were unconstitu· tiona.l in that they infringed the funds.mental rights guaranteed to the petitioner under Arts. U, 19(I)(g) and 31 of the Constitution. S. 64 of the Indian Income·Ta.x Act makes provisions for detiermin- ing the place of assessment. Sub-section (1) of that section provides 1956 March 20 268 SUPREME COURT REPORTS [1956) 1956 that where _a.n assessee carried on a business, profession or vocation at any place he shall be assessed by the Income-Tax Officer of that Bidi Suj>Jly Co. area in which that place is situate or where the business, profession, . v · . or vocation is carried on at more than one place by the Income· Tax The Umon °1 Ind•a Officer of the area in which the principal place of business, profes· and othe1's sion or vocation is situate. In all other cases, according to sub· section (2), an assessee shall be assessed by the Income-Tax Officer of the area in which he resides. If any question arises as to the place of assessment such question shall be decided, after giving the assessee an opportunity to/represent his views, by the Commissioner or Commissioners concerned or in case of disagreement between them by the Board·of Revenue. The section is imperative in terms and gives a valuable right to the assessee. By amending the Indian Income-Tax Act 1922 by the Indian Income-Tax (Amendment) Act, 1940 (Act XL of 1940) by adding to clause (b) of sub-section (5}ofs. 64 the words "in consequence of any transfer made under sub-section (7· A) of s. 5" and by adding sub· section (7-A) to s. 5 the benefit conferred by the provisions of sub· section (1) and sub-section (2) of s. 64 is taken away and is to be deemed not to have existed at any time as regards the assessee with regard to whom a transfer is made under sub-section (7·A) of s. 5. Held that as under s. 22(2) of the Act, the notice and the return are t
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