1981 (11) TMI 57
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....s that the President had no power under art. 123 of the Constitution to issue the Ordinance and the Ordinance is, therefore, ultra vires and void. We shall first deal with the latter ground since it can be disposed of briefly, but before we do so, it would be convenient to refer to the relevant provisions of the Act. It is not necessary to make any specific reference to the provisions of the Ordinance since the provisions of the Act are substantially a reproduction of the provisions of the Ordinance. On 12th January, 1981, both Houses of Parliament not being in session, the President issued the Ordinance in exercise of the power conferred upon him under art. 123 of the Constitution. The Ordinance was later replaced by the Act which received the assent of the President on 27th March, 1981, but which was brought into force with retrospective effect from 12th January, 1981, being the date of promulgation of the Ordinance. The Act is a brief piece of legislation with only a few sections but the ascertainment of their true meaning and legal effect has given rise to considerable controversy between the parties and, hence, it is necessary to examine the provisions of the Act in some det....
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....or the purposes of this sub-section 'civil liability' does not include liability by way of tax under any law for the time being in force. 4. Without prejudice to the generality of the provisions of section 3, the subscription to, or acquisition of, Special Bearer Bonds by any person shall not be taken into account for the purpose of any proceedings under the Income-tax Act, 1961 (hereinafter referred to as the Income-tax Act '), the Wealth-tax Act 1957 (hereinafter referred to as the Wealth-tax Act'), or the Gift-tax Act, 1958 (hereinafter referred to as the Gift-tax Act ') and, in particular, no person who has subscribed to, or has otherwise acquired, the said Bonds shall be entitled (a) to claim any set-off or relief in any assessment, reassessment, appeal, reference or other proceeding under the Income-tax Act or to reopen any assessment or reassessment made under that Act on the ground that he has subscribed to or has otherwise acquired the said Bonds ; (b) to claim, in relation to any period before the date of maturity of the said Bonds, that any asset which is includible in his net wealth for any assessment year under the Wealth-tax Act has been converted into the said Bo....
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....ce of the President under art. 123 and the other was that the subject-matter of the Ordinance was in the nature of a Money Bill which could be introduced only in the House of the People and passed according to the procedure provided in arts. 109 and 110 and the President had, therefore, no power under art. 123 to issue the Ordinance bypassing the special procedure provided in arts. 109 and I 10 for the passing of a Money Bill. There is, as we shall presently point out, no force in either of these two contentions, but we may point out straightaway that both these contentions are academic, since the Act has been brought into force with effect from the date of promulgation of the Ordinance and sub-s. (2) of s. 9 provides that anything done or any action taken under the Ordinance shall be deemed to have been done or taken under the corresponding provisions of the Act and the validity of anything done or any action taken under the Ordinance is, therefore, required to be judged not with reference to the Ordinance under which it was done or taken, but with reference to the Act which was, by reason of its retrospective enactment, in force right from the date of promulgation of the Ordinanc....
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....or which provision is made in this Act and are not inconsistent therewith, be deemed to have been made under this Act as if this Act had been in force on the date on which such rules were made and shall continue in force unless and until they are superseded by any rules made under this Act.' The effect of this section is that the rules which were made or purported to have been made under the 1948 Act in respect of matters for which rules could be made under the 1957 Act would be deemed to have been made under the 1957 Act as if that Act had been in force on the date on which such rules were made and would continue in force. The Act of 1957 in a way is deemed to have been in force when the modification rules were framed in 1956. The 1956 rules would be deemed to be framed under the 1957 Act and, therefore, their validity and continuity depends on the provisions of the 1957 Act and not of the 1948 Act. In this connection, we may refer to the case reported as Abdul Majid v. P. R. Nayak, AIR 1951 Bom 440. In that case, s. 58 of Act XXXI of 1950 repealed Ordinance No. XXVII of 1949 and provided as follows: `The repeal by this Act of the Administration of Evacuee Property Ordinance....
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....cept when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require. (2) An ordinance promulgated under this article shall have the same force and effect as an Act of Parliament, but every such Ordinance (a) shall be laid before both Houses of Parliament and shall cease to operate at the expiration of six weeks from the reassembly of Parliament, or, if before the expiration of that period resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions; and (b) may be withdrawn at any time by the President ....... (3) If and so far as an Ordinance under this article makes any provision which Parliament would not under this Constitution be competent to enact, it shall be void." It will be noticed that under this article legislative power is conferred on the President exercisable when both Houses of Parliament are not in session. It is possible that when neither House of Parliament is in session, a situation may arise which needs to be dealt with immediately and....
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....tituent Assembly-that the legislative power conferred on the President under this article is not a parallel power of legislation. It is a power exercisable only when both Houses of Parliament are not in session and it has been conferred ex necessitate in order to enable the executive to meet an emergent situation. Moreover, the law made by the President by issuing an Ordinance is of strictly limited duration. It ceases to operate at the expiration of six weeks from the reassembly of Parliament or if before the expiration of this period, resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions. This also affords the clearest indication that the President is invested with this legislative power only in order to enable the executive to tide over an emergent situation which may arise whilst the Houses of Parliament are not in session. Furthermore, this power to promulgate an Ordinance conferred on the President is co-extensive with the power of Parliament to make laws and the President cannot issue an Ordinance which Parliament cannot enact into a law. It will, therefore, be seen that legislative power has been conferred on the executiv....
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.... Parliament to make laws, it is difficult to see how any limitation can be read into this legislative power of the President so as to make it ineffective to alter or amend tax laws. If Parliament can by enacting legislation alter or amend tax laws, equally can the President do so by issuing an Ordinance under art. 123. There have been, in fact, numerous instances where the President has issued an Ordinance replacing with retrospective effect a tax law declared void by the High Court or this court. Even offences have been created by Ordinance issued by the President under art. 123 and such offences committed during the life of the Ordinance have been held to be punishable despite the expiry of the Ordinance. Vide: State of Punjab v. Mohar Singh [1955] 1 SCR 893; AIR 1955 SC 84. It may also be noted that cl. (2) of art. 123 provides in terms clear and explicit that an Ordinance promulgated under that article shall have the same force and effect as an Act of Parliament. That there is no qualitative difference between an Ordinance issued by the President and an Act passed by Parliament is also emphasized by cl. (2) of art. 367 which provides that any reference in the Constitution to Ac....
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....ia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them. In short, while art. 14 forbids class discrimination by conferring privileges or imposing liabilities upon persons arbitrarily selected out of a large number of other persons similarly situated in relation to the privileges sought to be conferred or the liabilities proposed to be imposed, it does not forbid classification for the purpose of legislation, provided such classification is not arbitrary in the sense above mentioned. It is clear that art. 14 does not forbid reasonable classification of persons, objects and transactions by the Legislature for the purpose of attaining specific ends. What is necessary in order to pass the test of permissible classification under art. 14 is that the classification must not be " arbitrary, artificial or evasive " but must be based on some real and substantial distinction bearing a just and reasonable relation to the object sought to be achieved by the Legislature. The question to which we must, therefore, address ourselves is whether the classification made by the Act in the present case....
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....lature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events-self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. " The court must always remember that " legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry " that exact wisdom and nice adaption of remedy are not always possible and that " judgment is largely a prophecy based on meagre and uninterpreted experience ". Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and, therefore, it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequitie....
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....years grown in size and dimension and even on a conservative estimate, the amount of black money in circulation runs into some thousand crores. The menance of black money has now reached such staggering proportions that it is causing havoc to the economy of the country and poses a serious challenge to the fulfilment of our objectives of distributive justice and the setting up of an egalitarian society. There are several causes responsible for the generation of black money and they have been analysed in the Report of the Wanchoo Committee. Some of the principal causes may be summarised as follows : (1) high rates of taxation under the direct tax laws ; they breed tax evasion and generate black money; (2) economy of shortages and consequent controls and licences leading to corruption for issuing licences and permits and turning blind eye to the violation of controls; (3) donations of black money encouraged by political parties to meet election expenses and for augmenting party funds and also for personal purposes; (4) corrupt business practices such as payments of secret commission, bribes; on money, pugree, etc., which need keeping on hand money in black; (5) ineffective administrat....
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....g the economy of the country is not a new or recent problem. It has been there almost since the second world war and it has been continuously engaging the attention of the Government. The Government has adopted various measures in the past with a view to curbing the generation of black money and bringing it out in the open so that it may become available for strengthening the economy. For instance, the Government introduced several changes in the administrative set up of the tax department from time to time with a view to strengthening the administrative machinery for checking tax evasion. The Government also amended s. 37 of the Indian I.T. Act, 1922, with a view to conferring power on the tax authorities to carry out searches and seizures and this power was elaborated and made more effectual when the I.T. Act, 1961, came to be enacted. Quite apart from these legal and administrative measures taken for the purpose of curbing evasion of tax, certain steps were also taken to tackle the black money built up out of past evasions. In 1946, just at the close of the second world war, high denomination notes were demonetised so as to bring within the net of taxation black money earned dur....
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....act that the adoption of these stringent legal and administrative measures as also the introduction of these different voluntary disclosure schemes did not have any appreciable effect and despite all these efforts made by the Government, the problem of black money continues unabated and has assumed serious dimensions. It, may be possible to say and that was the criticism of Mr. R. K. Garg-that the enforcement machinery of the tax department is not as effective as it should be and no serious effort has been made to eliminate the other causes of generation of black money, but whatever may be the failures of the political and administrative machinery and we are not here concerned to inquire into that question nor are we competent to express any opinion upon it the fact remains that there is considerable amount of black money in the hands of persons which is causing havoc to the economy of the country and seriously prejudicing mobilisation of resources for social and economic reconstruction of the nation. It was to combat this menacing problem of black money and to unearth black money lying secreted and outside the ordinary trade channels that the Act was enacted by Parliament. It wa....
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.... the position as if Special Bearer Bonds had not been purchased at all. If without taking into account the fact of subscription to or acquisition of Special Bearer Bonds and totally ignoring it as if it were nonexistent, any inquiry or investigation into concealed income could be carried out and such income detected land unearthed, it would be open to the revenue to do so and it would be no answer for the assessee to say that this money has been invested by him in Special Bearer Bonds and it is, therefore, exempt from tax or that he is on that account not liable to prosecution and penalty for concealment of such income. This is the main difference between the impugned Act and the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1965. Under the latter Act, where gold is acquired by a person out of his undisclosed income, which is the same thing as black money, and such gold is tendered by him as subscription for the National Defence Gold Bonds, 1980, the income invested in such gold is exempted from tax, but where Special Bearer Bonds are purchased out of undisclosed income under the impugned Act, the income invested in the Special Bearer Bonds is not exempt from tax and ....
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....es is not the only method available to tax administration for detecting and discovering black money. There are other methods also by which concealment of income can be detected and these are commonly employed by the tax authorities in making assessment of income or wealth. Close and searching scrutiny of the books of account may reveal that accounts are not properly maintained, unexplained cash credits may provide evidence of concealment and so too unaccounted for investments or lavish expenditure; information derived from external sources may indicate that income has been concealed by resorting to strategems like suppression of sales or understatement of consideration, and existence of assets in the names of near relatives may give a lead showing investment of undisclosed income. All these methods and many others would still remain available to the tax authorities for detecting undisclosed income and bringing it to tax despite investment in Special Bearer Bonds. The taxable income of the holder of Special Bearer Bonds would not stand reduced by the amount invested in the purchase of Special Bearer Bonds and it would be open to the revenue to assess such taxable income in the same ....
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....o or acquisition of Special Bearer Bonds. This section in its opening part affirms in unmistakable terms that subscription to or acquisition of Special Bearer Bonds shall not be taken into account in any proceeding under the I.T. Act, 1961, or the W.T. Act, 1957, or the G.T. Act, 1958. If any investment in Special Bearer Bonds has been made by the assessee, it is to be ignored in making assessment on him under any of the above-mentioned three tax laws; the assessment is to be made as if no Special Bearer Bonds had been purchased at all. The process of computation of taxable income and assessment of tax on it remains unaffected and is not in any way deflected or thwarted by the investment in Special Bearer Bonds. The position remains the same as it would have been if there were no investment in Special Bearer Bonds. We have already discussed the full implications of this proposition in the preceding paragraph while dealing with s. 3 and it is not necessary to say anything more about it. Then, proceeding further, after enacting this provision in the opening part, s. 4 branches off into three different clauses. Clause (a) provides that no person who has subscribed to or otherwise acqu....
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....e before the date of maturity of the Special Bearer Bonds held by an assessee, it is found that any asset is held by him or any sum is credited in his books of account or is otherwise held by him and he is required to explain the nature and source of acquisition of such asset or sums of money, he cannot be heard to say by way of explanation that such asset or sum of money represents the consideration received by him for transfer of the Special Bearer Bonds, even if that be factually correct. This explanation, though true being statutorily excluded, it would be impossible for the assessee to offer any other explanation for the acquisition of such asset or sum of money, because any such explanation which might be given by him would be untrue and in the absence of any satisfactory explanation in regard to the nature and source of acquisition of such asset or sum of money, the revenue would be entitled to infer that such asset has been acquired out of undisclosed income or that such sum of money represents concealed income and, hence, the value of such asset or such sum of money, as the case may be, should be treated as undisclosed income liable to be included in the taxable income of ....
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....s of the Art, limited as it is, extends only to the person who is for the time being the holder of Special Bearer Bonds and the person who has transferred the Special Bearer Bonds for black money has no immunity at all and all the provisions of tax laws are available against him for determining his true income or wealth and, therefore, no one who has purchased Special Bearer Bonds with a view to earning security against discovery of unaccounted money in his hands would ordinarily barter away that security by again receiving black money for the Special Bearer Bonds. Furthermore, even if special bearer bonds are transferred against receipt of black money, it will not have the effect of legalising more black money into white, because the black money of the seller which had become white on his subscribing to or acquiring Special Bearer Bonds would again be converted into black money and the black money paid by the purchaser by way of consideration would become white by reason of being converted into Special Bearer Bonds. The petitioners', however, expressed an apprehension that Special Bearer Bonds would fetch a much higher value in the black market than that originally subscribed and ....
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.... while expenditure is met out of black money received by way of consideration for sale of special bearer bonds. We do not think there is any scope for such abuse; the apprehension expressed by the petitioners is more imaginary than real. It may be noted that in order to sustain his explanation, the assessee would have to prove to the satisfaction of the tax department that he had special bearer bonds and that he sold them for certain amount. Now, if he has received black money by way of consideration, it is difficult to see how he would ever be able to establish that he sold special bearer bonds for that particular amount of black money. Would he be so fool-hardy as to admit that he received the consideration in black money and even if he does, would he ever be able to prove it ? Who would believe him even if he makes such an admission ? And when he has bought special bearer bonds for the purpose of converting his black money into white, why should he again reconvert it into black by selling special bearer bonds for black money ? The entire postulate of the argument of the petitioners is theoretical and has no basis in reality. No assessee would ever admit that he incurred expendit....
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....ds will be encashed. It is indeed difficult to believe that any one holding special bearer bonds would keep them encashed without earning any interest from and after the date of maturity, when they can be immediately encashed and the amount received can be invested yielding interest ranging between 18 per cent. to 40 per cent. Moreover, special bearer bonds would cease to be exempt from wealth-tax from and after the date of maturity and they would, therefore, be includible in the net wealth of the holder for the purpose of wealth-tax and if that be so, how would it benefit the holder to keep them as part of his net wealth and pay wealth-tax upon it without earning any interest ? It is, therefore, extremely unlikely that Special Bearer Bonds would remain encashed after the date of maturity and it would be equally improbable that any one should want to purchase Special Bearer Bonds after the date of maturity when they do not yield any interest but are still includible in the net wealth for the purpose of liability to wealth-tax. But let us assume for the purpose of argument that in a given case special bearer bonds are not encashed on the date of maturity and they are lawfully transf....
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....being taken advantage of by the resourcefulness and ingenuity of those minded to benefit themselves at the cost of the State or the others, the Legislature can and most certainly would intervene and change the law. But the law, cannot be condemned as invalid on the ground that after a period of ten years it may lend itself to some possible abuse. We may now proceed to consider the constitutional validity of the Act in the light of the above discussion as regards the scope and effect of its various provisions. It is obvious that the Act makes a classification between holders of black money and the rest and provides for issue of special bearer bonds with a view to including persons belonging to the former class to invest their unaccounted money in purchase of special bearer bonds, so that such money which is today lying idle outside the regular economy of the country is canalised into productive purposes. The object of the Act being to unearth black money for being utilised for productive purposes with view to effective social and economic planning, there has necessarily to be a classification between persons possessing black money and others and such classification cannot be regar....
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....ffends against morality by according to dishonest assessees who have evaded payment of tax, immunities and exemptions which are denied to honest tax payers. Those who have broken the law and deprived the State of its legitimate dues are given benefits and concessions placing them at an advantage over those who have observed the law and paid the taxes due from them and this, according to the petitioners, is clearly immoral and unwarranted by the Constitution. We do not think this contention can be sustained. It is necessary to remember that we are concerned here only with the constitutional validity of the Act and not with its morality. Of course, when we say this we do not wish to suggest that morality can in no case have relevance to the constitutional validity of a legislation. There may be cases where the provisions of a statute may be so reeking with immorality that the legislation can be readily condemned as arbitrary or irrational and, hence, violative of art. 14. But the test in every such case would be not whether the provisions of the statute offend against morality but whether they are arbitrary and irrational having regard to all the facts and circumstances of the case. ....
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.... in the open for being utilised for productive purposes. The first alternative would have left no choice to the Government but to resort to deficit financing or to impose heavy dose of taxation. The former would have resulted in inflationary pressures affecting the vulnerable sections of the society while the latter would have increased the burden on the honest taxpayer and perhaps led to greater tax evasion. The Legislature, therefore, decided to adopt the second alternative of coaxing persons in possession of black money to disclose it and make it available to the Government for augmenting its resources for productive purposes and, with that end in view, enacted the Act providing for issue of special bearer bonds. It may be pointed out that the idea of issuing special bearer bonds for the purpose of unearthing black money was not a brain wave which originated for the first time in the mind of the Legislature in the year 1981. The suggestion for the issue of special bearer bonds was made as far back as 1950 by some of the members of the provisional Parliament, notably those belonging to the opposition and the Government was repeatedly asked why it was not issuing special bearer bo....
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..... The court must, while examining the constitutional validity of a legislation of this kind, " be resilient, not rigid, forward looking, not static, liberal, not verbal " and the court must always bear in mind the constitutional proposition enunciated by the Supreme Court of the United States in Munn v. Illinois, 94 US 13, namely, " that courts do not substitute their social and economic beliefs for the, judgment of legislative bodies ". The court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary. The court should constantly remind itself of what the Supreme Court of the United States said in Metropolis Theatre Company v. City of Chicago, 57 Lawyers' Edition 730: " The problems of government are practical ones and may justify, if they do not require, rough accommodations, illogical it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not always discernible, the wisdom of any choice may be disputed or condemned. Mere errors of government are not subject to our judicial review." It is true that o....
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....all be deemed to have come into force on January 12, 1981. The provisions of the Ordinance and the Act are similar except that s. 4(c) of the Act is worded slightly differently from the corresponding provision of the Ordinance but the difference is not material and I shall hereinafter, refer to the provisions of the Act only. As the long title of the Act shows, it is: "An Act to provide for certain immunities to holders of Special Bearer Bonds, 1991, and for certain exemptions from the direct taxes in relation to such bonds and for matters connected therewith." The purpose for which the Act was passed as appearing from the preamble is: " Whereas for effective economic and social planning it is necessary to canalise for productive purposes black money which has become a serious threat to the national economy; And whereas with a view to such canalisation the Central Government has decided to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991, of the face value often thousand rupees and redemption value, after ten years, of twelve thousand rupees ; And whereas it is expedient to provide for certain immunities and exemptions to render it possible fo....
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....tion to, or acquisition of, Special Bearer Bonds by any person shall not be taken into account for the purpose of any proceedings under the Income-tax Act, 1961 (hereinafter referred to as the Income-tax Act), the Wealth-tax Act, 1957 (hereinafter referred to as the Wealth-tax Act), or the Gift-tax Act, 1958 (hereinafter referred to as the Gift-tax Act), and, in particular, no person who his subscribed to, or has otherwise acquired, the said Bonds shall be entitled (a) to claim any set-off or relief in any assessment, reassessment, appeal, reference or other proceeding under the Income-tax Act or to reopen any assessment or reassessment made under that Act on the ground that he has subscribed to or has otherwise acquired the said Bonds; (b) to claim, in relation to any period before the date of maturity of the said Bonds, that any asset which is includible in his not wealth for any assessment year under the Wealth-tax Act has been converted into the said Bonds; or (c) to claim, in relation to any period before the date of maturity of the said Bonds, that any asset held by him or any sum credited in his books of account or otherwise held by him represents the consideration recei....
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.... forbids commencement of any enquiry or investigation under any law against a person on the ground that he has subscribed to or otherwise acquired the bonds. Under cl. (c) the fact that a person has subscribed to or otherwise acquired the Special Bearer Bonds shall be inadmissible in evidence and cannot be taken into account in any proceeding relating to any offence or to the imposition of any penalty under any law. None of these immunities is required by a person who has paid "white" money, that is, money that has been accounted for, to acquire the bonds. To a person who has disclosed the source of acquisition of the bonds, these immunities are of no use. Section 4 makes it clear that the immunities conferred by the Act are of use only to those who have acquired the Bonds with unaccounted money. Section 4 states that the fact that one has subscribed to or otherwise acquired the bonds shall not be taken into account in any proceeding under the I.T. Act, 1961, the W.T. Act, 1957, and the G.T. Act, 1958, and goes on to provide specifically that no one shall be entitled to : (a) any manner of relief under the I.T. Act on the ground that he has acquired the Bonds; or (b) claim that....
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....that no one would be inclined to invest " white " money for Special Bearer Bonds which carry only 2 per cent. annual interest. I do not think this is a consideration which could justify the discrimination. Apart from that, a return of 2 per cent. simple interest per annum is not a correct measure of the actual advantages conferred by the Act. Taking into account the income-tax and the wealth-tax savings if one did not have to pay any tax on the amount with which Special Bearer Bonds were acquired-purchasers of the Bonds with black money did not and the tax free premium on the Bonds, the actual return would be many times more than 2 per cent. simple interest per annum. It must, therefore, be held that the basis on which the holders of Special Bearer Bonds have been classified to give certain advantages to one class and deny them to the other, has no rational nexus with the object of the Act. The matter has another aspect. The classification of holders of Special Bearer Bonds into taxpayers and tax-evaders does disclose a basis. Would it be an acceptable argument to say that this basis has a relation to the object of the Act because the black money invested in Special Bearer Bonds ....
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....this differentia must be intelligible. If the basis of classification is on the face of it arbitrary in the sense that it is palpably unreasonable, I do not think it is possible to call the differentia intelligible. The following passage from the judgment of Bose J. in Anwar Ali Sarkar's case [1952] SCR 284, 361, illustrates the point: I can conceive of cases where there is the utmost good faith and where the classification is scientific and rational and yet which would offend this law. Let us take an imaginary case in which a State legislature considers that all accused persons' whose skull measurements are below a certain standard, or who cannot pass a given series of intelligence tests, shall be tried summarily whatever the offence on the ground that the less complicated the trial, the fairer, it is to their sub-standard of intelligence. Here is classification. It, is scientific and systematic. The intention and motive are good. There is no question of favouritism, and yet I can hardly believe that such a law would be allowed to stand. But what would be the true basis of the decision ? Surely, simply this, that the judges would not consider that fair and proper." The scope o....
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....le: "We call that action reasonable which an informed, intelligent, just-minded, civilised man could rationally favour. Bose J. in Anwar Ali Sarkar's case [1952] SCR 284, 366, 367 says much the same thing in holding that the West Bengal Special Courts Act of 1950 offends art. 14: "We find men accused of heinous crimes called upon to answer for their lives and liberties. We find them picked out from their fellows, and however much the new procedure may give them a few crumbs of advantage, in the bulk they are deprived of substantial and valuable privileges of defence which others, similarly charged, are able to claim. It matters not to me, nor indeed to them and their families and their friends, whether this be done in good faith, whether it be done for the convenience of government, whether the process can be scientifically classified and labelled, or whether it is an experiment in speedier trials made for the good of society at large. It matters not how lofty and laudable the motives are. The question with which I charge myself is, can fair-minded, reasonable, unbiased and resolute men, who are not swayed by emotion or prejudice, regard this with equanimity and call it reasonabl....
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....c imbalance. On the effect of giving concessions to such unscrupulous tax-evaders in preference to the honest taxpayers, Mr. R. K. Garg appearing in person and Mr. Salve both repeated what the Direct Taxes Enquiry Committee's final report says. Resorting to such a measure ... would only shake the confidence of the honest taxpayers in the capacity of the Government to deal with the lawbreakers and would invite contempt for its enforcement machinery. " The petitioners submitted further that measures like-the Special Bearer Bonds Scheme would tempt more people to evade taxes and instead of serving legitimate public interest would grievously damage it. It has been pointed out that there have been voluntary disclosure schemes in the past. That is so, but none of them is quite like the scheme in question which not only exempts the unaccounted money in the shape of Special Bearer Bonds from all taxes but provides also for a tax-free premium on it. According to the petitioners, if the earlier schemes have been conciliatory, the present scheme amounts to capitulation to black money. I asked the Attorney-General if it was his case that all attempts to unearth black money had failed and the....