M.C. Agarwal, J. - (1.) THIS is a petition under Article 226 of the Constitution of India preferred by the Kanpur Income Tax Bar Association through its Secretary Naveen Bhargava and Mukesh Srivastava a Chartered Accountant. The petitioners claimed to be legal practitioner in taxation laws and they challenge a clarification contained in paragraph 3 of a letter dated 25.11.1997 issued by Sri A. K. Batabyal, Member (Investigation) Central Board of Direct Taxes. The following reliefs have been claimed in this writ petition : "(i) issue a writ, direction or order in the nature of certiorari calling for the record of letter/communication dated 25.11.1997 (Annexure-2) and the record of the decision of Government of India, if any, and to quash the same. (ii) issue of writ, direction or order in the nature of mandamus directing the respondents, not to give effect to the 3rd paragraph of the aforesaid communication/letter dated 25.11.1997 (Annexure-2). (iii) issue a writ, direction or order in the nature of mandamus restraining the Commissioner of Income Tax. Kanpur {Respondent No. 3) from reopening or reviewing the certificates which have already been granted under the provisions of the Scheme, (iv) issue a writ, order or direction in the nature of mandamus directing the respondent No. 3 to grant certificates in respect of declarations which have already been submitted to him without taking into account the contents of para 3 of the impugned communication dated 25.11.1997 (Annexure-2), (v) issue a writ, direction or order, in the nature of mandamus directing the respondents to accept the declarations made as clarified by means of D.O. dated 3.10.1997. (vi) issue a writ, direction or order in the nature of mandamus extending the last date of submitting the declaration, viz., 31.12.1997 in the event the relief is not granted by this Hon'ble Court on such date and in such time that no time is left to the clients of members of petitioner No. 1 and of petitioner No. 2 to make the declarations under the Scheme which they have been inhibited from doing because of the impugned communication dated 25.11.1997 (Annexure-2). When the writ petition came up for admission, a preliminary objection was raised about maintainability of this writ petition for the aforesaid reliefs at the instance of the practitioners. We, therefore, heard the learned counsel for the parties on this preliminary question about locus standi of the petitioners.
(2.) DISTURBED by the unabated generation and flow of black money and with a view to bring that money in the mainstream of the economy and raise revenue for the Government, the Government of India introduced a Voluntary Disclosure of Income Scheme (V.D.I.S.) by enacting Sections 62 to 78 in the Finance Act. 1997. Under the Scheme, any person could make a declaration of his income for any year and pay tax at the rate of 35 per cent if it is a company or a firm, and at the rate of 30 per cent if he is a person other than a company or a firm. The declaration has to be made in the prescribed form and the income declared may represent either cash or an asset in any form whatsoever. For explaining the provisions of the Scheme and for clearing doubts raised, the Government issued some circulars. A specific provision has been made in the Scheme in Section 73 that the value of the jewellery or bullion declared under the Scheme shall be taken to be its market value as on the 1st day of April, 1987, where the disclosure is made in respect of an assessment year earlier than assessment year 1987-88 and for the purposes of this Scheme, 'jewellery' shall have the same meaning assigned to it in Explanation 1 to clause (viii) of subsection (1) of Section 5 of the Wealth-tax Act. By a circular dated 3rd October. 1997, it was clarified that disclosure of silver utensils and other articles which are not covered by the definition of jewellery like gold/silver coins, watches can also be made as the law does not prohibit their declaration and that the declaration can be made at the value at which they were acquired. The circular further stated that in all such cases the assessee should be asked to file an affidavit indicating the period of acquisition of those articles and also the number/weight of these articles and on receipt of this affidavit, declaration should be accepted and certificate should be issued as per law. The impugned letter dated 25.11.1997, copy of which is Annexure-2 to the writ petition makes a change in the aforesaid clarifications and the impugned Para 3 of this letter stated as under: "3. The matter has been reconsidered by the Government. It is now decided that in all such cases of unusual declaration of silver articles, utensils, gold or silver coins, watches, etc., It should be treated as if they have been acquired in the current year unless the declarant is able to produce credible and satisfactory evidence about the year of acquisition. A simple affidavit would not suffice. Where such evidence is not produced, the value as on 1.4.1997 would be treated as value for declaring income under V.D.I.S.-1997. In cases where certificates have already been issued, the Commissioners concerned should call the declarants and ask them to produce credible and satisfactory evidence of the year of acquisition, failing which the Commissioner should take steps to review the certificates." It is stated in the writ petition that the change made through the impugned letter dated 25.11.1997 is illegal being against the earlier clarification contained in the letter dated 3rd October, 1997, inasmuch as it places extra burden on the declarant to produce credible and satisfactory evidence about the year of acquisition in place of simple affidavit that was required earlier and inasmuch as in the absence of such evidence it provides that the value of this type of assets would be taken as on 1.4.1997. It is further claimed that the direction that even in respect of persons who have made the declarations before the issue of letter dated 25.11.1997, they should be required to produce credible and satisfactory evidence and the certificates issued earlier should also be reviewed, as illegal. Regarding the justification for the present petitioner to file this writ petition which patently is not for their personal benefit but is intended to serve the persons who have made disclosure of undisclosed income under the Scheme or who intend to make the declarations till the currency of the Scheme, it is stated that the Central Board of Direct Taxes had sent messages to the Tax Practitioners all over the country asking them to help disclosure of Income under the Scheme and sought their co-operation in making the Scheme a success. In this connection, a copy of the letter addressed by the aforesaid Sri A. K. Batabyal to the tax practitioners has been annexed as Annexure-7 to the writ petition. It is stated that it was envisaged under the Scheme that the disclosures would be made through the tax practitioners in general. It is averred that the Scheme grants certain immunity to the declarant and on the payment of tax prescribed under the Scheme, the Commissioner of Income Tax has to issue a certificate to the declarant. The declarations are to be treated as confidential and provisions have been made in the Scheme that no Court or any other authority is entitled to require any public servant or the declarant to produce before it any such declaration or part thereof or to give any evidence before it in respect thereof. Under Section 76 of the Scheme the Central Government is entitled to make any order not inconsistent with the provisions of the Scheme as may be necessary to remove any difficulty in the implementation thereof. It is claimed that many clients of the members of the petitioner No. 1 and of the petitioner No. 2 have made declarations under Section 64 (1) of the Scheme and in view of the confidentiality and secrecy which is contemplated under the provisions of the Scheme, the members of the petitioner No. 1 and the petitioner No. 2 are enjoined not to disclose the names of those clients, in Para 29 of the writ petition, it is stated that the grievance of such clients, which has necessitated the filing of this writ petition is stated in the following paragraphs. The petitions then states that the income disclosed under the Scheme represented gold and silver utensils, gold and silver coins, watches and other articles which were not covered by the definition of 'jewellery'. The value thereof was disclosed to be the same as was the quantum of the voluntarily disclosed income of the assessment year for which the income was disclosed and the declarant made payment of income-tax at the rate provided therein and submitted proof of payment thereof as required under the Scheme. In some of the cases the Commissioner of Income-tax granted certificates to all the clients who had made declarations upto 18.11.1997. It is averred that the Scheme does not contemplate any enquiry about the disclosed income or the assets or about the assessment year for which the income was disclosed. Reference is made to the clarification dated 3.10.1997, copy of which is Annexure 6 to the writ petition which provided that only an affidavit indicating the period of acquisition may be filed. It is claimed that still a very large number of clients of the petitioners intend to make disclosures under the Scheme and they want also to disclose not only the income in the year of assessment to which it relates but also the assets which are represented by that income. Such assets, according to the information given to the petitioners are in the form of gold and silver utensils/coins, watches and other assets which are not covered by the definition of the expression 'jewellery'. It is claimed that great difficulty has arisen amongst the aforesaid clients of the members of the petitioner No. 1 and the petitioner No: 2 because of the communication dated 25.11.1997, which places additional burden on the declarant and has instructed the Commissioner even to review cases in which certificates, have already been issued. It is claimed that the names of the persons who have already made their declarations as well as the names of persons who are intending to make declaration cannot be disclosed because of the obligation of confidentiality and secrecy. According to the petitioners the additional condition prescribed through the letter dated 25.11.1997 are contrary to and ultra vires the Scheme and are wholly arbitrary. It is claimed that since the Government itself requested the tax practitioners to help in the implementation of the Scheme, the petitioners are directly interested in the cause of their clients and are entitled to espouse their cause and are under an obligation to do the same (see Para 44 of the writ petition). It is claimed that the petitioners are practising on taxation side and their profession is directly connected with proper and valid enforcement of the taxation laws.
(3.) A perusal of the aforesaid averments made in the writ petition, it is clear that it is a case where the petitioners have no direct personal interest in the matter and they are according to their own showing espousing the cause of their clients. Therefore, the question arose whether the petitioners have the locus standi to do so. Learned counsel for the petitioners Sri S.P. Gupta, Senior Advocate, with his usual rhetoric, contended that this writ petition has been filed in public interest and the purpose is to see that the Scheme as contained in the provisions of the Finance Act, 1997, is property implemented and serves its purpose fully of bringing into the mainstream the hidden undisclosed income and at the same time raise proper revenue for the State which is to be spent for the benefit of the Nation. The writ petition, therefore, is intended to serve a large public interest and, therefore, the petitioners who are practising on the taxation side are deeply concerned and involved in the proper implementation of the Scheme. He placed reliance on S.P. Gupta and others v. President of India and others, AIR 1982 SC 149, which according to him is the Bible of the law about Public Interest Litigation and about the question of locus standi That was a case in which Sri S.P. Gupta (who coincidently is also the counsel for the present petitioners) and some others challenged, inter alia, a circular letter issued by the then Law Minister to the Chief Ministers requesting them to : "(a) obtain from all the Additional Judges working in the High Court of your State their consent to be appointed as permanent Judges in any other High Court in the country. They could, in addition, be requested to name three High Courts, in order of preference, to which they would prefer to be appointed as permanent Judges ; and (b) obtain from persons who have already been or may in the future be proposed by you for initial appointment their consent to be appointed to any other High Court in the country along with a similar preference for three High Courts." ;