BIDI SUPPLY CO. versus THE UNION OF INDIA AND OTHERS.

BOSE J.-I agree with my Lord the Chief Justice that this petition should be allowed but for different reasons. In my opinion, sections 5(7-A) and 64(5)(b) of the Indian Income-tax Act are themselves ultra vires article 14 of the Constitution and not merely the order of the Central Board of Revenue.

p. 278, margin D

The only question is whether these sections contravene article 14. Despite the constant endeavour of Judges to define the limits of this law, I am unable to deduce any clear cut principle from the oftrepeated formula of classification. As I have said in another case, even the learned Judges who propound that theory and endeavour to work it out are driven to concede that classification in itself is not enough for the simple reason that anything can be classified and every discriminatory action must of necessity fall into some category of classification, for classification is nothing more than dividing off one group of things from another; and unless some difference or distinction is made in a given case no question under article 14 can arise. It is just a question of framing a set of rules.

p. 278, margin D

It is elementary that no two things are exactly alike and it is equally obvious many things have features that are common. Once the lines of demarcation are fixed, the resultant grouping is capable of objective determination but the fixing of the lines is necessarily arbitrary and to say that governments and legislatures may classify is to invest them with a naked and arbitrary power to discriminate as they please. Faced with the inexorable logic of this position, the learned Judges who apply this test are forced to hedge it round with conditions which, to my mind, add nothing to the clarity of the law. I will pass over the limitations with which the classification test is now judicially surrounded, namely that it must be "reasonable'', it must not be "discriminatory" or "arbitrary'', it must not b~ "hostile"; there must be no "substantial discrimination" and so forth, and will proceed at once to a rule that is supposed to set the matter at rest. The rule is taken from the American decisions and was stated thus in The State of West Bengal v. Anwar Ali Sarl:ar(i);

pp. 278–279, margin D

"In order to pass the test, two conditions must be fulfilled, namely (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that that differentia must have a rational relation to the object sought to be achieved by the Act". Mukherjea, J. (as he then was) said at page 321 ibid that

p. 279

"the classification should never be arbitrary, artificial or evasive. It must rest always upon real and substantial distinction bearing a reasonable and just relation. to the thing in respect to which the classification is made; and classification made without any reasonable basis should be regarded as invalid". In another case, Ram Prasad Narayan Saki and Another v. The State of Bihar and Others( the same learned Judge said at page 1139-

p. 279

"but such selection or differentiation must not be arbitrary and should rest upon a rational basis, having regard to the object which the legislature has in view".

p. 279

Ivor Jennings puts it another way:

p. 280

"Among equals the law shall be equal and shall be equally administered and that like shall be treated l'k ,, e .

p. 280

With the utmost respect all this seems to me to break dow·n on a precise analysis, for even among equals a large discretion is left to judges in the matter of punishment, and to the police and to the State whether to prosecute or not and to a host of officials whether to grant or withhold a permit or a licence. In the end, having talked learnedly round and around the article we are no wiser than when we started and in the end come back to its simple phrasing-

p. 280

"The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India''.

p. 280

The truth is that it is impossible to be precise, for we are dealing with intangibles and though the results are clear it is impossible to pin the thought down to any precise analysis. Article 14 sets out, to my mind, an attitude of mind, a way of life; rather than a precise rule of law. It embodies a general awareness in the consciousness of the people at large of something that ,exists and which is very real but which cannot be pinned down to any precise analysis of fact save to say in a given case that it falls this side of the line or that, and because of that decisions on the same point will vary as conditions vary, one conclusion in one part of the country and another somewhere else; one decision today and another tomorrow when the basis· of society has altered and the structure of current social thinking is different. It is not the law that alters but the changing conditions of the times and article 14 narrows down to a question of fact which must be determined by the highest Judges in the land as each case arises. (See on this point Lord Sumner's line of reasoning in Bowman's case(')). Always there is in these cases a clash of conflicting claims and it is the core of the judicial process to arrive at an accommodation between them. Anybody can decide a question if only a single principle is in issue. The heart of the difficulty is that there is hardly any question that comes before the Courts that does not entail more than one so-called principle. As Judge Leonard Hand of the United States Court of Appeals said of the American Constitution-

pp. 280–281

"The words a judge must construe are empty vessels into which he can pour anything he will".

p. 281

These rules are useful guides in some cases but they do not, in my opinion, go to the root of the matter; nor am I alone in so thinking though my approach is more direct and fundamental than is usual. Patanjali Sastri, C.J. said in The State of West Bengal v. Anwar Ali Sarlcar(1) that the reported decisions

p. 281

"underline the futility of wordy formulation of so-called 'tests' in solving problems presented by concrete cases".

p. 281

I endeavoured to point out in my judgment in Anwar Ali Sarlcar's case(1) at page 361 that one can conceive of classifications that conform to all these rules and yet which are bad: classifications made in the utmost good faith; classifications that are scientific and rational, that will have direct and reasonable relation to the object sought to be achieved and yet which are bad because despite all that the object itself cannot be allowed on the ground that it offends article 14. In such a case, the object itself must be struck down and not the mere classification which, after all, is only a means of attaining the end desired; and that, in my judgment, is precisely the point here. It is the very point that Fazl Ali J. made in Anwar Ali Sarkar's case(1) at pages 309-310:

p. 281

. "It was suggested that the reply to this query is that the Act itself being general and applicable to all persons and to all offences, cannot be said to discriminate in favour of or against any particular case or classes of persons or cases, and if any charge of discrimination can be levelled at all, it can be levelled only against the act of the executive authority if the Act is misused. This kind of argument however does not appear to me to solve the difficulty. The result of accepting it would be that even where discrimination is quite evident one cannot challenge the Act simply because it is couched in general terms; and one canndt also challenge the act of the executive authority whose duty it is t·o administer th~ Act, becallSe that authority will say:-! am not to blame as I am acting under the Act. It is clear that if the argument were to be accepted, article I 4 could be easily defeated. I think the fallacy of the' argument lies in overlooking the fact that the 'insidious piscrimination complained of is incorporated in the Act itself', it being so drafted that whenever any discrimination is made such discrimination would be ultimately traceable to it".

pp. 281–282

Nor, in the past, has this Court hesitated to strike down the Act or Order itself when it confers unrestricted power as here .. That was what. happened in the Coal Control Case('); the Order itself was struck down and not the executive action taken by virtue of the unrestricted powers conferred l:iy that law. See page 813 where it was said-

p. 282

"The Order commits to the unrestrained will of a single individual the power to grant, withhold or cancel licences in any way he chooses. and there is nothing in the Order which would ensure a proper execution of the power or operate as a check upon iiijustice that might result from improper execution of the same". So also in the State of Madras v. V. G. Row("). It is true that these were cases under article 19 and not 14 of the Constitution but the principle is the same. I need not multiply instances.

p. 282

What is the position here? Here.is an Act that fixes a certain venue for assessment in section 64. That is the normal law of the land for these purposes. The language in sub-sections (I) and (2) is mandatory: "he shaU be assessed". If there is doubt or dispute about the correct venue, it can only be decided after hearing the party concerned. Then come the provisions for transfer.

p. 282

Now it is, I think, necessary that there should be powers of transfer and the mere conferral of such powers would not offend article 14. But, put at its lowest, it is anomalous that when similar powers are conferred on the High Courts and even on this Court under, for example, the Code of Criminal Procedure, they should be hedged round with limitations, whereas, when it comes to a Commissioner of Income-tax or the Central Board of Revenue, no limitations whatever are placed upon them. Section 526 of the Criminal Procedure Code confers only limited powers of transfer on the High Court and article 136 empowers this Court to intervene should those powers be exceeded by the High Court and should this Cou~t in its discretion feel that that has led, or is likely to lead, to hardship and injustice or to a miscarriage of justice; and in the case of this Court a right to transfer is conferred under section 527 only when that is "expedient in the interests of justice". Section 24 of the Civil Procedure Code is wider but that was a law made before the Constitution and, in any case, suc.h an order would be open to review by this Court and in a suitable case, should the High Court act arbitrarily or along non-judicial lines, such as directing a transfer without recording reasons and without hearing the parties concerned when it is possible to afford them a hearing, the matter would be set right here. There is a big difference between investing a judicial authority with such powers and other non-judicial bodies because judges must act in accordance with a recognised procedure and obey the laws of natural justice unless there is express indication to the contrary in the .statute.

pp. 282–283

What is the position here? There is no hearing, no reasons are recorded: just peremptory orders transferring the case from one place to another without any warning; and the power given by the Act is to transfer from one end of India to the other; nor is that power unused. We have before us in this Court a case pending in which a transfer has been ordered from Calcutta in West Bengal to Ambala in the Punjab.

p. 283

After all, for whose benefit was the Constitution enacted? What was the point of making all this pother about fundamental rights? I am clear that the Constitution is not fc~ the exclusive benefit of governments and States; it is not only for lawyers and politicians and officials and those highly placed. It also exists for the common man, for the poor and· the humble, for those who have businesses at stake, for the "butcher, the baker and the candlestick maker". It lays down for this land "a rule of law" as understood in the free democracies of the world. It constitutes India into a Sovereign Democratic Republic and guarantees in every page rights and freedom to the individual side by side and consistent with the overriding power of the State to act for the common good of all.

pp. 283–284

I make no apology for turning to older democracies and drawing inspiration from them, for though our law is an amalgam drawn from many sources, its firmest foundations are rooted in the freedoms of other lands where men are free in the democratic sense of the term. England has no fundamental rights as such and its Parliament is supreme but the liberty of the subject is guarded there as jealously as the supremacy of Parliament.

p. 284

The heart and core of a democracy lies in the judicial process, and that means independent and fearless judges fre~ from executive control brought up in judicial traditions and trained to judicial ways of working and thinking. The main bulwarks of liberty and freedom lie there and it is clear to me that uncontrolled powers of discrimination in matters that seriously affect the lives and properties of people cannot be left to executive or quasi executive bodies even if they exercise quasi judicial functions because they are then invested with.an authority that even Parliament does not possess. Under the Constitution, Acts of Parliament are subject to judicial review particularly when they are said to infringe fundamen ta! rights, therefore, if under the Constitution Parliament itself has not uncontrolled freedom of action, it is evident that it cannot invest lesser authorities with that power. If the legislature itself had done here what the Cent~al Board of Revenue has done and had passed an Act in the bald terms of the o.rder m~de here transferring. the . case. of ~his petitioner, pwked out from others m a hke s1tuat10n, from one State to another, or from one end of India to the other, without specifying any object and without giving any reason, it would, in my judgment, have been bad. I am unable to see how the position is bettered because the Central Board of Revenue has done this a~d not Parliament.

pp. 284–285

I quote Mukherjea J. (as he then was) in a case which is not in point here but in a passage whose language seems apt to the present position. The quot:ttion is from Ram Prasad Narayan Sahi v. The State of Bihar(1):

p. 285

"It is impossible to conceive of a worse form of discrimination than the one which differentiates a particular individual from all his fellow subjects and visits him with a disability which is not imposed upon anybody else and against which even the right of complaint is taken away" and again,

p. 285

"It is true that the presumption is in favour of the constitutionality of a legislative enactment and it has to be presumed that a Legislature understands and correctly appreciates the needs of its own people. But when on the face of a statute there is no classification at all, and no attempt has been made to select any individual or group with reference to any differentiating attribute peculiar to that individual or group and not possessed by others, this presumption is of little or no assistance".

p. 285

In the case of Liversidge v. Sir John Anderson( the learned Law Lords were at great pains to see whether the British Parliament had in fact left the matter under consideration there to the subjective satisfaction of a Secretary of State. 'fhere was no doubt that the British Parliament could do so because it is supreme and its action is not fettered by a written constitution; but the encroachment on the liberty of the subject was so great that the House of Lords was reluctant to reach the conclusion which it ultimately did by a majority, that that had in fact been done; and one of the learned Law Lords, Lord Atkin, read a powerful dissenting opinion. ne of his criticisms at page 226 was that the order of detention was made

pp. 285–286

"by an executive minister and not by any kind of judicial officer; it is not made after any inquiry as to facts to which the subject is part~ it cannot be reversed on any appeal.. .......... It is an absolute power which, so far as I know, has never been given before to the executive". In my opinion, that is the very point here. In England the power can be conferred but, because it so vitally affects the liberty of the subject, the judges there fight against any interpretation that would lead to that conclusion and in the end reach it only when compelled to do so for overwhelming reasons. In India the fundamental freedoms conferred by the Constitution are guarded with equally · jealous care and it seems to me that the whole point of having this Chapter on Fundamental Rights is to ensure that the .very things that the English judges fight against in their courts will not happen here.

p. 286

Io England the task of the judges is to see whether their Parliament has conferred those wide powers; in India our task is to see whether the Constitution has done so. In England the conferral of those powers is never conceded unless Parliament uses clear, express and unambiguous words. In our EJonstitution I find an absence of any such clarity; on the contrary, the whole trend of the Constitution points the other way. .

p. 286

If an executive authority or a quasi judicial body, or even Parliament itself, were to be given the right to determine these matters to their subjective satisfaction, there would be no point in these fundamental rights, for the courts would then be powerless to interfere and determine whether those rights have been infringed. The whole point of the chapter is to place a limitation on the powers of all these bodies, including Parliament, save in its constituent capacity. Therefore, no power resting on the subjective satisfaction of any of these bodies can ever be conferred; the satisfaction must always be objective in the sense in which Lord Atkin explained so that its exercise is open to judicial review.

pp. 286–287

In my opinion, the power of transfer can .only be conferred if it is hedged round with reasonable restrictions, the absence or existence of which can in the last instance be determined by the courts; and the exercise of the power must be in conformity with the rules of natural justice, that is to say, the parties affected must be heard when that is reasonably possible, and the reasons for the order must be reduced, however briefly, to writing so that men may know that the powers conferred on these quasi judicial bodies are being justly and properly exercised.

p. 287

In a democracy functioning under the Rule of Law it is not enough to do justice or to do the right thing; justice must be seen to be done and a satisfaction and sense of security engendered in the minds of the people at large in place of a vague uneasiness that Star Chambers are arising in this land. We have received a rich heritage from a very variegated past. But it is a treasure which can only be kept at the cost of ceaseless and watchful guarding. There is no room for complacency, for in the absence of constant vigilance we run the risk of, losing it. "It can happen here."

p. 287

I would hold for these reasons, and in particular for the reason given: by Fazl Ali J. in the passage from one of his judgments quoted above, that section 5(7-A) is ultra vires article 14 of the Constitution and so is ,section 64(5)(b) in so far as it makes an order under section 5(7-A) as it now exists, inviolate.

p. 287

I would allow the petition.

p. 287