NAYUDU J. - (1.) THESE civil rules have been heard together as they involve a common question of constitutional law, namely, whether section 37(2) of the Indian Income-tax Act è(Act XI of 1922), infringes the fundamental rights guaranteed by the Constitution of India in articles 14 and 19 (r)(f) and (g) thereof. Before this question is taken up for consideration, it would be useful and necessary that the facts alleged in the petitions are briefly set out. In Civil Rule 195 of 1962, the petitioner is one Senairam Doongarmall Agency (Private) Ltd., a company incorporated under the Companies Act and having its registered office at Tinsukia, in the Lakhimpur district, of the State of Assam. Shri K.E.Johnson, the Commissioner of Income-tax, Assam, Tripura and Manipur, is impleaded as the first respondent, apparently in his personal capacity. The second respondent is the Commissioner of Income-tax, Assam, Tripura and Manipur, having his office at Shillong, the headquarters of the State of Assam. The third respondent is the Inspecting Assistant Commissioner of Income- tax, Assam, holding his office at Shillong. The fourth respondent is the Additional Income-tax Officer, Dibrugarh, in the State of Assam. The fifth and sixth respondents were the employees of the petitioner-company, whose services had been dispensed with by the petitioner. The seventh respondent is the Income-tax Officer, Dibrugarh, in the State of Assam. The eight and the ninth respondents are the Income-tax Officers of Digboi and Tinsukia, respectively, in the State of Assam. The tenth respondent is the Additional Superintendent of Police at Dibrugarh, and the eleventh respondent is the Union of India, through the Secretary, Ministry of Finance (Revenue Division), Government of India.
(2.) THE petitioner company was carrying on extensive business as wholesale dealers of various foodgrains, mustard oil and other commodities having its sales depot as well as its own railway siding at the Siding Bazaar, Tinsukia. THE petitioner-company was being regularly assessed with income-tax from year to year, by the Income-tax Officer, Dibrugarh, the fourth respondent, and had been duly and regularly paying its taxes in accordance with the orders of assessment passed in respect of its said business from time to time. THEre was never any default, failure or neglect on the part of the petitioner to produce any of the books, documents and papers necessary for completing the assessment proceedings, and the petitioner gave no occasion for the income-tax authorities at any time to have any complaint regarding the conduct of the petitioner and particularly in the production of the books, documents, etc., in the course of and required for the assessment proceedings from time to time. THE petitioner fully co-operated with the income-tax authorities in arriving at a proper and correct assessment of the income of the petitioners business and had been regularly paying the taxes according to assessment, as evidenced by the income-tax clearance certificate dated August 7, 1961, in respect of the petitioners business for the assessment year 1959-60. In respect of the year 1960-61, the petitioner had duly filed the income-tax return and on or about the 8th January, 1962, the fourth respondent took up the petitioners assessment and completed the hearing after èthe petitioner had produced all the relevant books, papers and documents for the inspection and scrutiny by the fourth respondent. After such scrutiny, the fourth respondent returned the books to the petitioners representative having been satisfied with the same. No assessment order, however, had been passed in respect of the petitioner for the said assessment year 1960-61. The respondents Nos.5 and 6 were the ex-employees of the petitioner and whose services had been dispensed with for alleged dishonesty and misconduct, in respect whereof a criminal proceeding had also been launched against the sixth respondent by the petitioner, in which a number of books were seized by the police and which were taken possession of by one Maheswary as Jimmadar. The sixth respondent was dismissed from the service of the petitioner with effect from January 8, 1962. As the books so seized contained valuable evidence in support of the criminal charge against the sixth respondent, the sixth respondent sought the aid of the fifth respondent to remove the said books. To this end and to humiliate the petitioner and its directors, the fifth respondent who was closely connected with the third respondent, the Inspecting Assistant Commissioner of Income-tax, as a friend and as a relative, influenced the said respondent to cause harsh and coercive measures to be taken against the petitioner by way of search and seizure, acting under section 37(2) of the Act, and, as a result of this, harsh and coercive measures were taken against the petitioner by the sudden search of the petitioners premises and the residences of its directors on the 11th March, 1962, by the respondents Nos. 4,7 to 9, the Income-tax Officers, and respondent No.10, the Additional Superintendent of Police, Dibrugarh, accompanied by about one hundred policemen armed with rifles and guns, under four warrants of authorisation purported to have been issued by the Commissioner if Income-tax under section 37(2) of the Act, and they started raiding simultaneously the various premises and/or offices at Tinsukia belonging either to the petitioner or to one or the other of its directors or to the companies with which the petitioner company was associated, as well as one or the other of the directors of those companies not so associated. This search continued from about 10 a.m. on March 11, 1962, till 11 p.m. on the same day. During the search, the various places searched were ransacked and diverse documents, papers and books, original contracts, hundis, title deeds, etc., were seized therefrom, some of which were listed and some destroyed. The search was also conducted in a highly objectionable manner by searching the apartments occupied by the ladies of the household of the directors of the petitioner- company, thus conducting an indiscriminate search and seizure of various properties belonging to the petitioner and others. This high-handed and illegal search and seizure resulted in a complete paralysing of the business and trade of the petitioner and ruined its business reputation, thus causing serious loss to the èpetitioner. The petitioner accordingly claims that the search of the premises of the petitioner and the seizure of the various books and documents on March 11, 1962, as well as the warrants of authorisation dated March 7, 1962, issued by the Commissioner of Income-tax, the first respondent, were illegal, inoperative, null and void, devoid of jurisdiction, ultra vires of the Act and the Rules, and mala fide, and accordingly prayed for the issue of appropriate writs.
(3.) IN Civil Rule No. 196 of 1962, the petitioner is one Gobardhandas Maheswary carrying on business under the name and style of Jagadamba Stores at Tinsukia. The gist of the complaint is the illegal search of the petitioners premises and the seizure of the petitioners books, which search is claimed on the same grounds as in the earlier Civil Rule to be unconstitutional, illegal and ultra vires. The petitioner further claimed that he was neither an assessee liable to any income-tax nor had he any connection with the business of the petitioner in Civil Rule No. 195 of 1962. In Civil Rule No. 197 of 1962, the contention of the petitioner is that the petitioner-company is an assessee in Calcutta who had paid the entire tax due from it and that as a third party and as one who had nothing to do with the assessment proceedings relating to the petitioner in Civil Rule No. 195 of 1962, or its business, the petitioner claims that the search of its premises and seizure of the books, documents, etc., was high-handed, illegal, unconstitutional, ultra vires and mala fide.;