1996-VIL-03-CAL-DT
Equivalent Citation: [1996] 222 ITR 632, 140 CTR 150
CALCUTTA HIGH COURT
Date: 13.03.1996
GAJENDRA KUMAR BANTHIA
Vs
UNION OF INDIA
BENCH
Judge(s) : SATYABRATA SINHA., SATYANARAYAN CHAKRABORTY
JUDGMENT
SATYABRATA SINHA J. -- This petition has been filed for issuance of a writ of habeas corpus directing the respondents to release Jitendra Kumar Banthia, the father of the petitioner (hereinafter referred to as "the detenu"), who is said to have been detained in civil prison by respondent No. 2 in purported exercise of his jurisdiction under section 222 of the Income-tax Act, 1961, read with the relevant rules contained in the Second Schedule appended thereto.
The detenu has been carrying on the business of jute and distributorship in cinematographic films. Allegedly because of losses suffered by the detenu, he could not pay his income-tax dues to the extent of a sum of Rs. 75 lakhs and odd. It is not disputed that the detenu who was being assessed under the provisions of the said Act, even did not file his income-tax returns after 1986 allegedly on the ground that he did not have taxable income. On February 23, the detenu was arrested and on that date itself he was sent to Alipore Central Jail by respondent No. 2 purportedly in the exercise of his powers under the provision of rule 76 of the Second Schedule to the Income-tax Act. The petitioner has contended that the detenu is not a defaulter or deemed defaulter. He has no means to pay the tax liabilities. In any event, the mandatory procedures relating to arrest and detention of a defaulter had not been complied with before directing his detention.
An affidavit-in-opposition which has been affirmed by one, Dilip Kumar Chowdhury who is the Tax Recovery Officer has been filed wherein it is stated that all the requirements for passing the order of arrest and detention of the father of the petitioner have been complied with. The respondents have also produced before us the records of the matter.
It is not disputed that before a person can be arrested and detained, the requirements of the law as laid down in section 222 of the Income-tax Act as also the provisions contained in the Second Schedule are required to be complied with.
Section 222 of the said Act provides for drawing up of proceedings by the Tax Recovery Officer when an assessee is in default or is deemed to be in default in making the payments of tax. In terms of the provisions of the said Act and the Second Schedule appended thereto for the purpose of recovering the dues from such assessee, an action specified in the certificate by one or more of the modes mentioned therein in accordance with rules laid down in the Second Schedule can be taken recourse to which includes arrest of the assessee and his detention in prison.
It is neither in doubt nor in dispute that respondent No. 2 has the requisite competence and jurisdiction to issue such a certificate.
Rule 1(a) defines "certificate", inter alia, to mean the certificate drawn up for the Tax Recovery Officer under section 222 in respect of any assessee referred to therein.
Rule 1(b) of the Second Schedule defines "defaulter" to mean the assessee mentioned in the certificate.
Rule 2 of the Second Schedule provides for service of notice upon the defaulter requiring him to pay the amounts specified therein within 15 days from the date of service of the said notice and intimating that in default steps would be taken to realise the amount under the Schedule. Such a notice had been issued to the petitioner describing him as M. D. Banthia Jute Corporation, 8/A, Alipore Road, Calcutta-27, but upon a perusal thereof it would appear that the place where he has to deposit the amount in question was not stated. Other unnecessary words in paragraph 2 of the said notice, the words which are not applicable to him were also not scored out. Furthermore, the said notice dated October 3, 1994, issued in Form I. T. C. P. I shows that one certificate case had been initiated against the detenu for the recovery of an amount of Rs. 42,98,000 but the details thereof have not been stated on the reverse thereof. It is clear that the said notice does not satisfy the requirements of law.
The said notice was purported to have been served by one, A. K. P. Sinha, Inspector of Income-tax, and from the report submitted by him it appears that he had visited the residence of Sri J. K. Banthia and made an attempt to serve the same on October 3, 1994, between 11 a.m. and 11.30 a.m. and again on October 4, 1994, between 11.15 a.m. and 11.45 a.m. but he failed to serve the same. He, thereafter, purported to serve the notice by affixation on October 6, 1994, between 11.30 a.m. and 12 p.m. in the presence of one, Sri Ranjan Bose. The signature of the witness appears in the said notice and the same appears to have been accepted as valid by respondent No. 2. However, in support of the said service no affidavit was filed.
Rule 73(1) of the Second Schedule provides that no order for the arrest and detention in civil prison of a defaulter shall be made unless the Tax Recovery Officer has issued and served a notice upon the defaulter calling upon him to appear before him on the date specified in the notice and to show cause as to why he should not be committed to the civil prison, and unless the Tax Recovery Officer, for reasons recorded in writing is satisfied.
Rule 73(1) provides for a notice upon the defaulter calling upon him to appear before him to show cause as to why he should not be committed to the civil prison, unless for reasons to be recorded he is, inter alia, satisfied that the defaulter, has, or has had since the drawing up of the certificate by the Tax Recovery Officer, the means to pay the arrears or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same.
Rule 73(2) provides that notwithstanding anything contained in sub-rule (i), a warrant for the arrest of the defaulter may be issued by the Tax Recovery Officer if the Tax Recovery Officer is satisfied, by affidavit or otherwise, that with the object or effect of delaying the execution of the certificate, the defaulter is likely to abscond or leave the local limits of the jurisdiction of the Tax Recovery Officer.
Sub-rule (3) of rule 73 empowers the Tax Recovery Officer to issue warrant for the arrest of the defaulter if appearance is not made in obedience to such a notice. Sub-rule (4) of rule 73 contemplates bringing of the arrested person as soon as practicable and in any event within 24 hours of his arrest. However, in terms of the proviso the defaulter may be released in the event the amount entered in the warrant of arrest as due and the cost of the arrest to the officer arresting him, is paid.
Rule 74 of the said rules provides for an opportunity to show cause by the defaulter as to why he should not be committed to civil prison. Rule 75 provides for custody pending hearing or the Tax Recovery Officer, who, however, may also release the arrested person on his furnishing security to his satisfaction for his appearance when required. An order of detention can be passed under rule 76 in terms whereof the Tax Recovery Officer upon conclusion of the enquiry/order for the detention of the defaulter in the civil prison and that in that event cause him to be arrested if he is not already under arrest. The proviso appended to the said rule empowers the Tax Recovery Officer to give the defaulter an opportunity of satisfying the arrear before making the order of detention for a specified period not exceeding 15 days or release him on his furnishing security to his satisfaction for his appearance at the expiration of the specified period if the arrears are not so satisfied.
Rule 77(1) provides for the period of detention and the proviso appended thereto specifies that the persons so detained shall be released if the amount mentioned in the warrant of detention is paid by the officer-in-charge of the civil prison or on the request of the Tax Recovery Officer on any ground other than the grounds mentioned in rules 78 and 79.
Rule 78 empowers the Tax Recovery Officer to release a defaulter upon being satisfied that he has disclosed the whole of his property and has placed it at the disposal of the Tax Recovery Officer and that he has not committed any act of bad faith.
Rule 86 of the said rules provides for an appeal against any original order not being an order which is conclusive, passed by the Tax Recovery Officer under the Schedule to the Chief Commissioner or Commissioner within 30 days from the date of the order appealed against. Sub-rule (3) of rule 86 empowers the appellate authority to stay the execution of the certificate.
From the records, it appears that a notice dated February 6, 1996, under rule 73 was served on him by respondent No. 2 which has been received by J. K. Banthia. In the said notice Certificate Cases Nos. 1777 to 1794 and 1042 to 1045 have been mentioned. In the said notice dated February 6, 1996, also, J. K. Banthia was described as managing director of Banthia Jute Suppliers Ltd. having the same address. In terms of the prescribed form the status of the person and the certificate numbers are required to be mentioned. But, in the instant case, the status of the defaulter had not been mentioned. The date of the certificate has also not been stated.
From the requisition dated February 19, 1996, it appears that a total sum of Rs. 75,15,000 had been assessed as against the petitioner by way of tax, interest and penalty under section 220(2) of the Act for the periods 1985-86 to 1988-89.
A certificate dated September 22, 1996, was also issued by the Assistant Commissioner of Income-tax to the Tax Recovery Officer to the effect that no rectification petition or any other petition is pending before the Income-tax Appellate Tribunal as per the office record.
From the order dated February 23, 1986, it transpires that Jitendra Kumar Banthia was brought before the said authority after being arrested at 7.30 a.m. to 8.30 a.m. and he was given an opportunity to file show cause as to why he should not be committed to the civil prison and in reply thereto he merely stated that he would not pay arrear income-tax demand even if he would be committed to the civil prison.
Respondent No. 2 in his said order stated that on enquiry it was revealed that Sri Banthia has means to pay the arrears income-tax demand but he refused and neglected to pay the arrears income-tax demand and he had not taken the opportunity to satisfy the arrear income-tax demand. He upon conclusion of the enquiry was of the opinion that Jitendra Banthia was not co-operative relating to the payment of the income-tax demand as he failed to satisfy the arrear demand.
Mr. S. K. Kapoor, learned counsel appearing on behalf of the petitioner, has, inter alia, raised three contentions in support of his application. Learned counsel submits that from a perusal of the records it would appear that the provisions of the Second Schedule have not at all been complied with. The notice under rule 2 of the Second Schedule according to Mr. Kapoor being illegal, the entire proceedings must be held to be vitiated in law. It was submitted that even no proper notice was served upon the father of the petitioner. According to learned counsel, the service of notice is a sine qua non for initiating proceedings under rule 73. Learned counsel contends that from the notices as referred to hereinbefore it would appear that the father of the petitioner has been described as managing director of Banthia Jute Suppliers Pvt. Ltd. and in that view of the matter, the notice must be held to be vague and illegal. In support of his aforementioned contention reliance has been placed by learned counsel on Sewlal Daga v. CIT [1965] 55 ITR 406 (Cal) ; Bhagwan Devi Saraogi v. ITO [1979] 118 ITR 906 (Cal) ; Laxmi Narain Anand Prakash v. CST, AIR 1980 All 198 [FB] ; Shyam Sundar Bajaj v. ITO [1973] 89 ITR 317 (Cal) and Rama Devi Agarwalla v. CIT [1979] 117 ITR 256 (Cal).
Mr. Kapoor would urge that admittedly the entire proceeding was completed on one day and the order dated February 23, 1996, would show that no opportunity to show cause had been given to the detenu as to why he should not be committed to the civil prison. Such a proceeding according to learned counsel could not be completed on any day and in any event, no reason has been assigned in support of the finding that the detenu has the means to pay the arrears of income-tax demands, the entire proceeding is vitiated in law.
Learned counsel states that the said order has been passed in a mechanical manner. Our attention has been drawn to the fact that from the records it would appear that as late as on February 13, 1996, the Commissioner of Income-tax, West Bengal-VI, addressed a letter to the Commissioner of Income-tax with a copy of the Tax Recovery Officer to the following effect :
"The Tax Recovery Officer is again directed to complete his enquiries. If, on enquiry, it is found that the assessee is not having any realisable assets, the Tax Recovery Officer should issue the irrecoverability certificate. In this connection, I call upon the concerned respondents to supply a xerox copy of the said writing to the petitioner and produce the original thereof before this court at the time of hearing of the petition."
Mr. Mukul Prakash Banerjee, learned counsel appearing on behalf of the respondent, firstly, submitted that clauses (a) and (b) of rule 73(1) should be read as disjunctive and not conjunctive. Learned counsel submits that the description of the detenu as managing director of Banthia Jute Supplier Company is only for the purpose of service of notice and not for the purpose of describing him as a principal officer of the said limited company as would be evident from the fact that such notices were attempted to be served at his residential address and not in the office of the company. Furthermore, contends learned counsel, in terms of section 292B no defect in the notice would vitiate the proceedings. Learned counsel contends that as there exists a provision for appeal this court should not exercise its jurisdiction and in support of the aforementioned contention reliance has been placed on K. T. Thomas v. CIT [1988] 173 ITR 283 (Ker) which has been affirmed by a Division Bench in K. T. Thomas v. CIT [1990] 185 ITR 292. Learned counsel also in this connection has relied upon a decision in Antonitto v. TRO [1988] 171 ITR 461 (Ker). Learned counsel submits that this court cannot go into the merits of the matter. Reliance in this connection has been placed on Bonomally Gupta, In re : [1917] ILR 44 Cal 723 at page 736.
It was submitted that the writ court shall not appreciate evidence nor shall it go into the correctness or otherwise of the procedure. Learned counsel submits that the proceedings for recovery of tax are not violative of articles 21 and 22 of the Constitution of India and in support of his aforementioned contention reliance has been placed on Homi Rustomji Pardivala v. Sub-Inspector Baig, AIR 1944 Lahore 196 ; Purshottam Govindji Halai v. Shree B. M. Desai, Additional Collector of Bombay [1955] 28 ITR 891 ; 2 SCR 887 ; AIR 1956 SC 20 and Collector of Malabar v. Erimmal Ebrahim Hajee [1957] 32 ITR 124 ; 2 SCR 970 ; AIR 1957 SC 688.
The question which arises for consideration in this application is as to whether a case for issuance of a writ of habeas corpus has been made out.
In Wade and Philips' Constitutional and Administrative Law, Ninth edition, at page 442, it is stated that there are ten aspects of the law relating to individual liberty ; first, the grounds on which an individual may be deprived of his physical liberty ; second, the remedies which an individual has if he wishes to contest the legality of such a deprivation. Imprisonment for civil debt is stated to be one of the grounds of personal freedom.
There cannot be any doubt that amongst others habeas corpus is one of the available remedies in case of infringement of freedom by reason whereof a person detained without legal jurisdiction, may secure proper release. It is a writ of right not of course. It is, inter alia, applicable when a Tribunal has no jurisdiction to detain the petitioner. It is available where errors are jurisdictional. It is also available where the error appears on the face of the record.
In Homi Rustomji Pardivala v. Sub-Inspector, Baig, AIR 1944 Lahore 196, Harries C. J. (speaking for a Special Bench) was considering a case as to whether a proceeding under the Contempt of Courts Act can be drawn up if a lawyer is arrested by the parties while he was proceeding to defend him for filing an application to the High Court under section 491 of the Criminal Procedure Code for the release of a detenu and appearing on his behalf.
In the facts of the case it was, inter alia, held there was no evidence that the lawyer was arrested in order to prevent him from filing an application in the High Court under section 491 of the Code of Criminal Procedure. On the facts of the case, it was held that as the detenu had already been released thus no order for his release could be passed.
In Purshottam Govindji Halai v. Shree B. M. Desai, Additional Collector of Bombay [1955] 28 ITR 891 ; 2 SCR 887, the Supreme Court, inter alia, held that the provisions of section 46(2) of the Indian Income-tax Act, 1922, which provided for recovery of tax did not offend articles 13(1), 14 and 21 of the Constitution of India. In the said case a rule was issued calling upon the respondents to show cause why a writ in the nature of habeas corpus should not be issued. The learned judges, inter alia, held that such a provision does not offend article 21 of the Constitution of India inasmuch as the assessee has been arrested and is being detained in jail in execution of a warrant of arrest under section 13 of the Bombay City Land Revenue Act, 1876, for the recovery of the demand certified under section 46(2) of the Income-tax Act.
It was held that article 21 of the Constitution of India has no application. As regards the contention that the said provision violates article 14 of the Constitution of India in so far as different provisions have been made in different State Acts for recovery of tax dues, it was held that the classification is valid. S. R. Das, Acting C. J. (as he then was) also held that the petitioner had no case on the facts. Chandrasekhara Aiyar J. lamented while initiating recovery of tax under the Income-tax Act there should be separate procedure. The learned judge, therefore, suggested that for the enforcement of the levy of a Central tax there should be uniformity of procedure and identity of consequences from non-payment. With that end in view Parliament amended the Act and laid down a uniform procedure.
In Collector of Malabar v. Erimmal Ebrahim Hajee [1957] 32 ITR 124 ; 2 SCR 970, the Supreme Court followed Purshottam Govindji's case [1955] 28 ITR 891 (SC) and held that section 46(2) of the Indian Income-tax Act is a valid piece of legislation. It was further held that an arrest for a civil debt in the process of or in the mode prescribed by law for recovery of arrears of land revenue does not come within the protection of article 22.
The aforementioned decisions are authorities for the proposition that a petition for issuance of a writ of habeas corpus is maintainable in the matter of detention to pay a civil debt, if a proper case is made out therefor.
There cannot be any doubt that a writ court shall not appreciate the evidence and may in proper cases refuse to exercise its jurisdiction if there exists an alternative remedy. The court also upon consideration of the facts of the matter may come to the conclusion as to whether there were any mala fides on the part of the detaining authority or not.
In K. T. Thomas v. CIT [1988] 173 ITR 283 (Ker), T. L. Viswanatha Iyer J., on the facts of the said case held that the petitioner therein dishonestly transferred his right in a property and did not disclose the same to the Income-tax Department. In that view of the matter it was held that the order of detention was valid. The said decision was upheld by K. S. Paripoornan J. (as his Lordship then was) and K. Sreedharan J. in K. T. Thomas v. CIT [1990] 185 ITR 292 (Ker), holding that the order for the arrest and the detention of the petitioner and the sale of his property was justified in the facts of that case.
In Antonitto v. TRO [1988] 171 ITR 461 (Ker), it was, inter alia, observed that an enquiry may be conducted and completed on the same day. Their Lordships further held : "The order under Schedule II, rule 76, of the Income-tax Act was passed on March, 16, 1985. The petitioner was released even earlier on February 28, 1985. He undertook to appear after 15 days. The order passed under Schedule II, rule 76, is an appealable one. Under Schedule II, rule 86(1)(c), the said order, exhibit P-5, should have been appealed against instead of being assailed in this court, in proceedings under article 226 of the Constitution. The learned single judge took the said view. It is not possible for us to say that the said view is either perverse or illegal. If the petitioner failed to advance any valid or proper reason for not filing the statutory appeal that is available to him against exhibit P-5 order, that itself was sufficient to deny jurisdiction under article 226 of the Constitution of India. The writ appeal is without merit".
In Kuldeep Singh v. TRO [1989] 176 ITR 204, a Division Bench of the Allahabad High Court did not interfere on the ground that there exists a remedy by way of appeal under rule 86(3) of the Rules as an appeal had already been filed. In that case, a writ of habeas corpus was not prayed for. Similar observations have been made in Shamsul Islam v. Govt. of Tripura, AIR 1956 Tripura 1 and Smt. Sita Devi Thapa v. Commandant, 6th Battalion Assam Rifles, AIR 1963 Tripura 31. Existence of an alternative remedy is a self-imposed restriction. A matter which has been heard on the merits may not be dismissed on the ground of availability of alternative remedy, if it found that the order passed is wholly without jurisdiction. Moreover those decisions were rendered under section 491 of the Criminal Procedure Code. The jurisdiction of this court is wider.
In the matter of Bonomally Gupta, In re [1917] ILR 44 Cal 723, a Special Bench of this court, inter alia, observed that a writ of habeas corpus is not granted to persons convicted in execution under legal process, including persons in execution of a legal sentence after conviction on indictment in the usual course.
There is no dispute as regards the aforementioned proposition of law. A person who has undergone a criminal trial, if convicted, must have recourse to the provision of the appeal which is provided for under the Code of Criminal Procedure. In such a case, an application for issuance of a writ of habeas corpus will not be maintainable. The said proposition of law has no application in this case.
The decision in Col. Dr. B. Ramachandra Rao v. State of Orissa, AIR 1971 SC 2197 and the decision of the Tripura High Court in Smt. Sita Devi Thapa v. Commandant, 6th Battalion Assam Rifles, AIR 1963 Tripura 31 are to the same effect.
In Col. Dr. B. Ramachandra Rao v. State of Orissa, AIR 1971 SC 2197, the apex court, inter alia, observed that a writ of habeas corpus is not granted where a person is confined in jail custody by a competent court except unless the order prima facie is without jurisdiction or wholly illegal. It is, therefore, clear that an order which is prima facie without jurisdiction or wholly illegal can come within the purview of the power of judicial review of this court, inter alia, for the purpose of issuance of the writ of or in the nature of habeas corpus. However, it is not possible to agree with Mr. Kapoor that only because the enquiry was completed in a day, the same was illegal.
The question which, however, arises for consideration is as to whether the respondents have followed the procedure or not or in other words whether an error was committed within jurisdiction. As indicated hereinbefore, the notice issued under rule 2 of the Second Schedule dated October 3, 1994, does not contain the place and the office where the amount was to be deposited. It is now well-known that the recovery proceeding must conform to the requirements of law.
It is also not clear as to in what capacity the said notices were served on the defaulter. As noticed hereinbefore, many illegalities have been committed in the issuance and service of notices. There cannot be any doubt that the provision of rules 73 to 76 are mandatory in nature. The said rules have been made in order to provide a procedural safeguard to an assessee. Personal freedom or liberty of a person is required to be zealously safeguarded. In our considered opinion, the procedures laid down under the Second Schedule should be followed. Any deviation or departure therefrom would vitiate the order of detention.
In terms of section 282 of the Income-tax Act a notice has to be served in the manner as is laid down in the Code of Civil Procedure which provides that service of summons shall be made by delivering or tendering a copy thereof signed by the judge or such officer as he appoints in this behalf, and sealed with the seal of the court. Therefore, delivering or tendering the same is the sine qua non for such service. It is not necessary to consider different provisions of Order V of the Code of Civil Procedure except Order V, rule 19.
Order V, rule 19 provides that where a summons is returned under rule 17, the court shall, if the return under that rule has not been verified by the affidavit of the serving officer, and may, if it has been so verified, examine the serving officer on oath, or cause him to be so examined by another court, touching his proceedings, and may make such further inquiry in the matter as it thinks fit ; and shall either declare that the summons has been duly served or order such service as it thinks fit.
In the instant case evidently the requirements under Order V, rule 19, have not been complied with. Thus, there is no service of summons under rule 2 of the Second Schedule. No statement has also been made in terms of rule 17 of Order V of the Civil Procedure Code, that there was no adult member or any agent to accept the service of summons.
In Rama Devi Agarwalla v. CIT [1979] 117 ITR 256, a Division Bench of this court while considering a matter of service of notice for reassessment under section 148 of the Income-tax Act, inter alia, held that notice cannot be regarded as a mere procedural requirement and if the notice issued by the Income-tax Officer under section 34 is invalid for any reason, the entire proceeding taken by the Income-tax Officer would become void for want of jurisdiction. If such a notice is ambiguous or defective or otherwise invalid, the same cannot be cured by taking into account and/ or looking into other documents whereby such defects can be rectified and/or omissions filled in.
D. K. Sen J. (as the learned Chief Justice then was) in support of his aforementioned proposition relied upon the case of Sewlal Daga v. CIT [1965] 55 ITR 406 (Cal) and Shyam Sundar Bajaj v. ITO [1973] 89 ITR 317 (Cal) and other decisions and held that where the notice is vague, the same was invalid.
In CIT v. Kurban Hussain Ibrahimji Mithiborwala [1971] 82 ITR 821, the apex court held that if the notice was invalid, the Income-tax Officer had no jurisdiction to revise the assessment.
In those cases notices were sought to be served upon a karta of the family or the association of persons or partnership firm.
In Bhagwan Devi Saraogi v. ITO [1979] 118 ITR 906 (Cal), A. N. Sen J. (as his Lordship then was) was dealing with a case where the notice had been addressed to B. D. Saraogi and others and the learned judge following the decisions of Sewlal Daga's case [1965] 55 ITR 406 (Cal) ; Shyam Sundar Bajaj's case [1973] 89 ITR 317 (Cal) and Smt. Rama Devi's case [1979] 117 ITR 256 (Cal) observed :
"It is also not stated in what capacity Smt. B. D. Saraogi and others were being served with the notice. It is not stated whether Smt. B. D. Saraogi and others were being served as an association of persons or otherwise and it is also not stated whether Smt. B. D. Saraogi was being served as principal officer of the said association of persons or whether she was being served only as a member thereof or in any other capacity....
The notice does not at all indicate that the notice was being addressed to an association of persons."
In Laxmi Narain Anand Prakash v. CST [1980] 46 STC 71 ; AIR 1980 All 198, a Full Bench of the Allahabad High Court held that service of a notice for the purpose of initiating proceedings under section 21 is not a mere procedural requirement but if not issued or the notice issued if shown to be invalid or no notice has been served on the dealer the proceedings and the consequential order under section 21 will be illegal and void irrespective of the fact that the dealer gets knowledge of the proceedings under section 21. In the aforementioned decision, the decision of this court in Bhagwan Devi Saraogi v. ITO [1979] 118 ITR 906 (Cal) was followed.
The aforementioned decisions are, therefore, authorities for the proposition that illegal or invalid notices cannot be cured. Section 292B of the said Act does not cover a case of non-service or when the notice is not in substance and effect in conformity with or according to the intent and purport of the Act.
Recently in Mahmed Akhtar Husein v. State a Gujarat [1992] 198 ITR 229 (Guj), S. B. Majmudar J., speaking for the Division Bench (as his Lordship then was), upon taking into consideration, the decision in Collector of Malabar's case [1957] 32 ITR 124 (SC), large number of decisions considered the statutory background of section 222 and relevant rules of the Second Schedule and, inter alia, held :
"So far as this point is concerned, a conjoint reading of rule 76(1) and rule 73(1) clearly indicates that no final order of detention in civil prison may be passed by the Tax Recovery Officer against any defaulter unless the Tax Recovery Officer, for reasons to be recorded in writing, is satisfied that either the defaulter, with the object or effect of obstructing the execution of the certificate has, after drawing up of the certificate by the Tax Recovery Officer, dishonestly transferred, concealed or removed any part of his property or the Tax Recovery Officer is satisfied that the defaulter has, or has had since the drawing up of the certificate by the Tax Recovery Officer, the means to pay the arrears or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same. These are the conditions precedent on which relevant satisfaction has to exist on the part of the Tax Recovery Officer before he can pass the final order of detention of the defaulter in civil prison. The final order is to be passed under rule 76(1) after hearing the defaulter as per rule 74."
We respectfully agree with the said observations.
It is well-known that the provisions of the recovery laws must be strictly construed. In Gujraj Sahai v. Secretary of State for India in Council, [1889] ILR 17 Cal 414, the Judicial Committee of the Privy Council stated the law thus :
"The Act (The Public Demands Recovery Act) is an extremely stringent one : the policy of it we do not of course discuss. But we suppose it to be that, as a matter of executive convenience, demands of a public nature, the justice of which has been enquired into and certified by officials of high rank and unquestionable integrity, may properly enjoy, for the enforcement of them, the very exceptional privileges accorded to them by this Act ; but subject to whatever safeguards are provided by the Act by the procedure laid down in it."
And, again, at page 431, it was observed :
"We think it absolutely incumbent on the courts, when considering the validity of sales under this Act, to rigidly require an exact compliance with the formalities prescribed by the Legislature : to do so at least as rigidly as the courts at home have, for instance, in copyright cases and in many others, insisted on exact obedience to prescribed formalities."
The aforementioned observation has been followed by a Division Bench of the Patna High Court in Hari Prasad Agarwalla v. State of Bihar, AIR 1976 Pat 217. The same view has been taken in Nirendra Kumar Bose v. District Magistrate, AIR 1978 Patna 241.
There cannot be any doubt whatsoever that an order under rule 76 of the Rules cannot be passed unless both or either of the conditions laid down in rule 73(1)(a) or (b) are satisfied.
Reliance placed by Mr. Banerjee upon rule 73(2) in the instant case is of no consequence inasmuch as the said provision deals with an absolutely different situation. In the instant case the records reveal that the order dated February 23, 1990, suffers from various infirmities. Respondent No. 2 in his order states that upon enquiry it has been revealed that the defaulter has means to pay but in support thereof no reason has been assigned. He has not stated as to on what basis he had come to the aforementioned conclusion. Only because allegedly the defaulter had refused or neglected to pay the arrear income-tax demand that does not by itself reveal that he had means to pay.
If he had not the means to pay, the question of his failing to satisfy the debt does not arise. The said order does not also reveal as to how and in what manner the show-cause as to why he should not be detained in civil prison was served.
Assignment of reason apart from being the statutory requirement is also a part of the principles of natural justice. See S. N. Mukherjee v. Union of India, AIR 1990 SC 1984. In that decision at paragraph 37, it has also been stated that there should be some evidence of probative value.
In view of the aforementioned reason, we are of the opinion, that there had been several procedural illegalities in passing the orders of detention passed against the detenu. It is not understood as to why so many certificate cases were initiated. There is nothing to show that all the said cases were amalgamated. In the notice under rule 2, the numbers of the said certificate cases had not been mentioned.
The question which, however, arises is as to whether a writ of habeas corpus should be issued. This court in exercise of its jurisdiction under article 226 of the Constitution of India may not only issue a writ but can also issue any direction or order. It is also well known that the court can mould the relief. The scope of habeas corpus has been widened. It is also extended to mere error on the face of the record even though made within jurisdiction. See R. v. Governor of Brixton Prison, ex parte Armah reported in [1968] AC 192 (HL).
In Sundarlal Jain v. Union of India [1996] 1 CHN 33, this court has held that a writ court can entertain a writ of or in the nature of mandamus in relation to an order of detention both punitive and preventive.
Wade in his Administrative Law, 6th edition, page 621, states the law thus :
"Although it has been said that in habeas corpus proceedings the court will review the detention order only to see that it was made within jurisdiction, the decision of the House of Lords in Armah's case [1968] AC 192 indicates that the scope of review on habeas corpus is as wide as that on certiorari ; and that, therefore, it extends to mere error on the face of the record, even though made within jurisdiction. Respectable antecedents can be found for this proposition. At one time the prisoner would have had to obtain certiorari to quash the detention order at the same time as habeas corpus to secure his release, in order to succeed on this ground. But to insist upon a separate certiorari was pointless formalism, since the habeas corpus brought the whole question of the validity of the detention before the court. It, therefore, became the practice to receive the depositions of evidence as if there had been a certiorari and to treat them as part of the record, in the same way as used to be done in reviewing magistrates' decisions before 1848. If error of law then appeared, habeas corpus would be granted and the detention order would in effect be quashed, just as it might have been quashed on certiorari.
Since the revival of the error on the face in 1950, the above reasoning appears to have been used for the release of the prisoner only in Armah's case [1968] AC 192 (HL), which is primarily one of no evidence and is discussed below. But the majority of the House of Lords clearly regarded the deficiency of evidence as amounting to error of law which the court could review because it appeared on the record, Lord Reid said :
"If the depositions are part of the record, as they appear to be, then there would be error of law on the face of the record if the depositions were insufficient in law to support the committal.
Since the court's powers ought to be at their widest for the protection of personal liberty, it seems necessarily right that review by habeas corpus should be as ample as review by certiorari. A prisoner who is entitled to have his detention order quashed is clearly entitled to his release.
There is as yet no sign of the doctrine of error on the face being eliminated by the doctrine that all error of law is ultra vires, but that possibility remains open here as elsewhere."
Similar view has been expressed in Administrative Law by P. P. Craig, pages 494-495.
In the matter of Omritolall Dey [1875] ILR 1 Cal 78, a writ of habeas corpus was issued in a case where the petitioner was detained in execution of a decree passed by the Small Causes Court.
The Supreme Court of India had also an occasion to consider the provision of section 51 of the Code of Civil Procedure in Jolly George Varghese v. Bank of Cochin, AIR 1980 SC 470, wherein it was held that the simple default to discharge the decree is not enough ; there must be some element of bad faith beyond mere indifference to pay.
The power of judicial review to issue a writ of habeas corpus has been discussed in detail in Appendix-II, in S. A. De Smith's Judicial Review of Administrative Action. Therein the learned author has clearly stated that in a case where there exists an error apparent on the face of the record, a writ of habeas corpus may be maintainable. As regards scope of review of habeas corpus, it is stated :
"Insuperable difficulties would frustrate any attempt to present a coherent and concise account of the scope of judicial review in habeas corpus proceedings, for the case law is riddled with contradictions. However, the following points are to be noted :
(1) . . . .
(2) In general, where imprisonment has been ordered by a court or other judicial Tribunal, habeas corpus will issue if the decision is void for want of jurisdiction but not merely voidable for error.
(3) Although this distinction has been broadly adhered to in respect of superior courts, it has often been disregarded in respect of inferior Tribunals, and habeas corpus has been awarded where a conviction or order has been made without evidence although the defect was not necessarily jurisdictional. . . .
(6) The general distinction between want of jurisdiction and mere error is of little significance in applications for habeas corpus to secure release from restraint imposed by persons and bodies other than judicial Tribunals. 'With the exception of detentions under war-time regulations, the courts are ready to examine the full legality of detentions ordered by administrative bodies'. Not only errors of law and defects of form but also erroneous findings of material facts (which may be controverted by affidavit) may be grounds for the award of habeas corpus. Since habeas corpus is a collateral form of attack, the onus of proving that the factual conditions precedent to a lawful detention existed rests on the administrative body. However, in a number of recent immigration cases, it has been stated that the applicant has the burden of proving that he is not an illegal entrant. Some, at least, of these cases can be explained as saying no more than that once an apparently good justification has been given for the detention, the applicant has the evidential burden of proof to dislodge the prima facie validity of the commitment order."
It is true that it is one thing to say that an order is wholly without jurisdiction but it is another thing to say that the order contains an error apparent on the face of the records although passed within jurisdiction.
S. A. de Smith in his Judicial Review of Administrative Action, Fourth edition, page 136, inter alia, stated that taking into consideration an irrelevant fact or refusing to take into consideration a relevant fact would also come within the purview of error apparent on the face of the records.
The power of judicial review, which is limited, for issuance of the said writ can be exercised in the same manner which can be exercised for issuance of other writs, directions or orders by the High Court in exercise of its jurisdiction under article 226 of the Constitution of India.
It has to be borne in mind that a statutory functionary has to act within the four corners of the statute or not at all. In a matter of recovery of tax, the Tax Recovery Officer is required to scrupulously follow the procedure laid down under law. A person can be detained and sent to civil prison for non-payment of the dues only upon complying with the conditions precedent therefor. A procedural impropriety is also one of the grounds for which power of judicial review can be exercised.
In fact, in S. A. de Smith's Constitutional and Administrative Law, Second edition, at pages 564 to 566, the learned author has, inter alia, held that the public authorities and officials must act intra vires. They can only do what the law permits them to do ; they cannot do what the law forbids them to do. The learned author states at page 566 that if the impact of the administrative act on private-rights is important, an ostensibly small deviation from the statutory requirements may be held to render the act invalid. The same principle would apply to a judicial or quasi-judicial proceeding, subject of course to the well-known limitation applicable thereto.
Moreover, in view of the decision in Anisminic Ltd. v. Foreign Compensation Commission [1969] 2 AC 147 at page 223 ; 1 All ER 208 (HL), the appeal court has clearly held that when a person having jurisdiction acts in violation of the provisions of law, he acts without jurisdiction. Reference in this connection may also be made to A. R. Antulay v. R. S. Nayak, AIR 1988 SC 1531 at page 1559.
A citizen of India is entitled to the safeguards provided for under the Act both substantive and procedural. Procedural fairness is also one of the important facets of the principles of natural justice. An act which is done in violation of the mandatory procedures laid down under an Act would thus be held to be without jurisdiction and in that view of the matter, in our considered view, this court in exercise of its power of judicial, review can issue a writ of habeas corpus.
For the reasons aforementioned this application is allowed and the respondents are directed to set the detenu at liberty forthwith. However, it does not mean that the detenu who admittedly is a defaulter should be allowed to go scot-free as has been held by the Division Bench of the Gujarat High Court in Mahmed Akhtar's case [1992] 198 ITR 229. In our opinion, the court in the peculiar facts and circumstances of this case is also entitled to grant certain directions upon the detenu so as to enable the Tax Recovery Officer to recover the arrears of tax from the detenu, albeit upon following the procedure established by law.
It will be thus open to respondent No. 2 to serve a fresh notice in terms of rule 2 of the Second Schedule which the detenu must accept. The detenu must also appear before the Tax Recovery Officer on each and every date fixed therefor except for very cogent reasons. He shall file show cause as when called upon to do so by the Tax Recovery Officer without delay and not later than one week from the date of service of such notice. The detenu is further hereby directed to disclose all his assets before the Tax Recovery Officer which would be subject to verification by respondent No. 2. In the event, it is found that the detenu has taken recourse to suppressio veri and suggestio falsi or other acts of bad faith, the Tax Recovery Officer may take appropriate action against him in accordance with law including bringing this matter to the notice of this court, so that if necessary, the court can proceed under the Contempt of Courts Act for violating this court's order.
The Tax Recovery Officer shall also be entitled to proceed as against the detenu in accordance with law and pass an appropriate order as he may deem fit and take recourse to any of the modes to recover the arrears of the taxes as is permissible in law including taking recourse to detention of the detenu in custody in terms of the rules laid down under the Second Schedule. The detenu shall not leave the jurisdiction of respondent No. 2 without his prior permission. This application is allowed with the aforementioned observations and, directions. Let a writ of habeas corpus issue. Let a plain copy of the operative portion of the order be handed over to Mr. P. Gupta, advocate on record for the detenu as also Mr. L. K. Chatterjee, the learned advocate, appearing on behalf of the respondent, countersigned by the Deputy Registrar (Court) on usual undertakings. In the facts and circumstances of this case, there will be no order as to costs.
S. N. CHAKRABORTY J. -- I agree.
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