Prosecution immunity and fair trial disclosure: Section 291 stands, but accused get pre-examination inspection of the witness statement.

Immunity from prosecution under Section 291 of the Income-tax Act is a distinct mechanism from tender of pardon under Section 306 CrPC, so the procedural rights attached to Section 306, including automatic supply of copies, do not apply. Section 291 was also upheld as not violative of Article 14 because the discretion to grant immunity is aimed at securing evidence and is not arbitrary. However, fairness in trial required that the accused be allowed to inspect the statement given by the immunised witness before examination, to enable effective cross-examination and avoid prejudice to the defence.

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Issues: (i) Whether the procedure under Section 306 of the Code of Criminal Procedure, 1973 applies where immunity from prosecution has been granted under Section 291 of the Income-tax Act, 1961. (ii) Whether Section 291 of the Income-tax Act, 1961 is unconstitutional as violative of Article 14 of the Constitution of India. (iii) Whether the accused were entitled to inspection of the statement made by the person granted immunity before he was examined as a prosecution witness.

Issue (i): Whether the procedure under Section 306 of the Code of Criminal Procedure, 1973 applies where immunity from prosecution has been granted under Section 291 of the Income-tax Act, 1961.

Analysis: Section 291 of the Income-tax Act, 1961 and Section 306 of the Code of Criminal Procedure, 1973 operate in different fields. The former empowers the Central Government to grant immunity from prosecution, while the latter concerns tender of pardon by the specified criminal court authorities. The procedural rights attached to Section 306, including supply of copies of the record, are not automatically attracted when immunity is granted under Section 291. The two provisions are also administered by different authorities and are not interchangeable.

Conclusion: The request to apply Section 306 of the Code of Criminal Procedure, 1973 to immunity granted under Section 291 of the Income-tax Act, 1961 was rightly rejected.

Issue (ii): Whether Section 291 of the Income-tax Act, 1961 is unconstitutional as violative of Article 14 of the Constitution of India.

Analysis: The power to grant immunity is not unguided or arbitrary merely because it permits selection of a person whose evidence may assist the prosecution. The provision is designed to secure evidence from a person involved in the offence, and the authority may choose such person in the interests of proof of the case. The Court found no constitutional infirmity in the discretion conferred by the section on the ground of unequal treatment or absence of guidelines.

Conclusion: Section 291 of the Income-tax Act, 1961 was held not to offend Article 14 of the Constitution of India.

Issue (iii): Whether the accused were entitled to inspection of the statement made by the person granted immunity before he was examined as a prosecution witness.

Analysis: Although Section 291 of the Income-tax Act, 1961 does not expressly provide for supply of copies, fairness in trial required that the accused and their counsel be allowed to inspect the statement leading to the grant of immunity before the witness was examined. Such inspection was necessary to enable effective cross-examination and to avoid prejudice to the defence by allowing contradiction of the witness with his earlier statement.

Conclusion: The prosecution was directed to make the statement available for inspection before the witness was examined.

Final Conclusion: The revision succeeded only to the limited extent of securing pre-examination inspection of the relevant statement, while the challenge to the applicability of Section 306 and the constitutional attack on Section 291 failed.

Ratio Decidendi: Immunity from prosecution under Section 291 of the Income-tax Act, 1961 is a distinct statutory mechanism from tender of pardon under Section 306 of the Code of Criminal Procedure, 1973, and the grant of such immunity is not unconstitutional merely because the Government may select one accused whose evidence is useful; however, fairness in trial requires disclosure by inspection of the statement on which the immunity was granted before that witness is examined.

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