Reasonable classification and prior hearing sustained the revisional power; threshold writ interference was refused on disputed facts.

Section 33B of the Income-tax Act, 1922 was upheld as intra vires and not violative of Article 14 because it required only tentative scrutiny, a mandatory hearing before any revisional order, and provided an appealable remedy. The provision was applied to a defined class of cases involving orders prejudicial to revenue, and that classification was held to have a rational nexus with protecting lawful revenue. The notices issued under section 33B were also not quashed at the threshold, as the challenge turned on disputed facts requiring inquiry and no patent lack of jurisdiction was shown; writ interference was therefore premature.

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Issues: (i) whether section 33B of the Income-tax Act, 1922 was ultra vires or violative of article 14 of the Constitution of India; (ii) whether the notices issued under section 33B were liable to be quashed at the threshold as premature or without jurisdiction.

Issue (i): whether section 33B of the Income-tax Act, 1922 was ultra vires or violative of article 14 of the Constitution of India.

Analysis: The statutory power under section 33B was distinguished from a wholly arbitrary ex parte transfer power. The provision contemplated only a tentative scrutiny of the record, followed by a mandatory opportunity of being heard before any revisional order could be made. The order passed under that section was also made appealable. The Court further held that the section operated upon a well-defined class, namely cases where orders were considered prejudicial to the interests of the revenue, and that this classification had a rational relation to the object of protecting lawful revenue. The existence of section 34 did not render section 33B unnecessary or invalid, since the two provisions were not identical in scope.

Conclusion: section 33B was held to be intra vires and not hit by article 14.

Issue (ii): whether the notices issued under section 33B were liable to be quashed at the threshold as premature or without jurisdiction.

Analysis: The Court held that the Commissioner had only initiated proceedings on the basis of material appearing from the record, while the factual basis of the proposed action was disputed and required inquiry. The legality of the proposed cancellation of registration and reopening of assessment could not be finally decided without examination of facts. Since the petitioners had an available statutory course and the notices did not disclose any patent lack of jurisdiction, interference under article 226 at that stage was unwarranted.

Conclusion: the notices were not quashed and the applications were held to be premature.

Final Conclusion: the writ applications failed, the rule was discharged, and the interim orders were vacated without costs.

Ratio Decidendi: a revisional provision that requires a hearing before adverse action, operates on a defined class linked to protection of revenue, and is appealable is not invalid under article 14; a writ court will not quash show-cause notices where the challenge depends on disputed facts and the matter is still at the threshold.

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