BHAGWATI J.--This petition under article 32 of the Constitution also raises the question about the constitutionality of section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947 (XXX of 1947).

The facts which led to the filing of this petition may be shortly stated.

Sir M. Ct. Muthiah Chettiar who carried on a flourishing banking business in India and foreign countries died in or about 1929 leaving behind him two sons, M. Ct. M. Chidambaram Chettiar (since deceased) and M. Ct. M. Muthiah Chettiar, petitioner 3, and his widow Devanai Achi. M. Ct. M. Chidambaram Chettiar continued the ancestral banking business and also started several commercial enterprises. He died by an accident while travelling in a plane in the year 1954 leaving behind him his two sons, the petitioners 1 and 2. Devanai Achi had predeceased him. The petitioners 1 and 2 are the legal representatives of the deceased M. Ct. M. Chidambaram Chettiar and also the representatives of their grandmother Devanai Achi.

The Central Government, in exercise of its powers under section 5(1) of Act XXX of 1947, referred to the Income-tax Investigation Commission R.C. Nos. 516, 517 and 518 relating to M. Ct. M. Chidambaram Chettiar, M. Ct. M. Muthiah Chettiar, petitioner 3, and Devanai Achi. The Commission, after holding an enquiry in all the three cases, recorded their findings and held that an aggregate sum of Rs. 10,07,322-4-3 represented the undisclosed income during the investigation period and directed distribution of this sum over the several years in the manner indicated by them in Schedule A to their report. This report was submitted by the Commission to the Government on the 26th August, 1952. The Central Government considered the report and, purporting to act under section 8(2) of the Act, directed by their order No. 74 (26) I.T./52 dated the 16th September, 1952, that appropriate action under the Indian Income-tax Act be taken against the assessees with a view to assess or re-assess the income which had escaped assessment for the years 1940-41 to 1948-49.

In pursuance of the said directions of the Central Government the Income-tax Officer, City Circle I, Madras, issued notices under section 34 of the Indian Income-tax Act and made the re-assessment for the years 1940-41, 1941-42 and 1943-44 to 1948-49 based upon the findings of the Commission which were treated as final and conclusive. The assessment orders for the years 1940-41, 1941-42 and 1948-49 were served on the assessees on the 20th February, 1954. Assessment orders for the years 1943-44 to 1947-48 were served on the 12th May, 1954. The re-assessment order for the year 1942-43 was not made though notices under section 34 of the Indian Income-tax Act had been issued by the Income-tax Officer on the assessees on the 19th March, 1954. It appears that these re-assessment proceedings for the year 1942-43 are yet pending and no assessment order in respect of that year has yet been served on the petitioners.

In regard to the assessment orders which were served on the 20th February, 1954, the petitioners preferred on the 18th May, 1954 applications to the Commissioner of Income-tax, Madras, under section 8(5) of the Act for references to the High Court on questions of law arising out of those re-assessment orders passed by the Income-tax Officer. Similar applications were preferred thereafter in respect of the reassessment orders which were served on the petitioners on the 12th May, 1954. These applications are still pending.

On the 6th December, 1954, the petitioners filed the present petition contending that the provisions of the Act XXX of 1947 were illegal, ultra vires and unconstitutional mainly on the ground that they were violative of the fundamental right guaranteed under article 14 of the Constitution.

The grounds urged in support of this contention were not felicitously expressed. The petitioners appear to have mixed up the contentions which could be urged as a result of our judgments in Suraj Mall Mohta v. A.V. Visvanatha Sastri and Another and Shree Meenakshi Mills Ltd. v. A. V. Visvanatha Sastri and Another. They contended in the first instance that after the amendment of section 34 of the Indian Income-tax by Act XXXIII of 1954, which, inter alia, added sub-sections (1-A) to (1-D) to section 34, the provisions of section 5(1) of the Act became discriminatory, as on a reading of both the enactments, Act XXX of 1947 and the Income-tax Act as amended in 1954 showed that they applied to the same category of persons and there was nothing in section 5(1) of the Act or any other provision of the said Act disclosing any valid or reasonable classification. The provisions of Act XXX of 1947 could not, therefore, be sustained on the ground of classification to avoid the mischief of article 14 of the Constitution. The petitioners obviously relied upon our decision in Shree Meenakshi Mills case, in support of this contention.

The petitioners thereafter proceeded to set out their alternative contention based upon our decision in Suraj Mall Mohta's case, though it was not so stated in express terms. They contended that Act XXX of 1947 enabled the Central Government to discriminate between one person and another inasmuch as they were authorised to pick and choose cases of persons who fell within the group of those who had substantially evaded taxation on income, that the act of the Government in referring some evaders to the Commission was wholly arbitrary and there was nothing to eliminate the possibility of a favouritism or a discrimination against an individual by sending or not sending cases to the Commission as between two persons both of whom might be within the group of those who have evaded the payment of tax to a substantial extent. They further contended that the procedure prescribed under the impugned Act was substantially more prejudicial and more drastic to the assessee than the procedure prescribed under the Indian Income-tax Act. There was no reasonableness or justification that one person should have the advantage of the procedure prescribed by the Indian Income-tax Act, while another person similarly situated should be deprived of it.

They, therefore, contended that section 5(1) of the Act was discriminatory and violative of article 14 of the Constitution and asked for the issue of a writ of certiorari or any other appropriate writ, direction or order quashing the report of the Income-tax Investigation Commission dated the 29th August, 1952, enclosed as annexure A to the petition and the assessment orders of the Income-tax Officer for the years 1940 41, 1941-42, and 1943-44 to 1948-49 as being unconstitutional, null and void and also of a writ of prohibition calling upon the Commissioner of Income-tax, Madras, respondent 1, and the Income-tax Officer, City Circle 1, Madras, respondent 2, or their subordinate officers to forbear from implementing the findings of the Investigation Commission with regard to the year 1942-43. This petition was heard along with Civil Appeals Nos. 21 and 22 of 1954, A. Thangal Kunjit Musaliar v. M. Venkatachalam Potti and Another and M. Venkatachalam Potti and Another v. A. Thangal Kunju Musaliar, which also raised inter alia the cognate question about the constitutionality of section 5(1) of the Travancore Act XIV of 1124 which was in pari materia with section 5(1) of Act XXX of 1947. In regard to the question whether there is a rational basis of classification to be found in the enactment of section 5(1) of the Act, the preamble and the relevant provisions of Act XXX of 1947 are the same as were considered by us in considering this question in relation to the Travancore Act XIV of 1124. The words " substantial extent " also have been used in both the Acts and in the present case as in the cases of the Travancore petitioners concerned in the Evasion Cases Nos. 1 and 2 of 1125 (M.E.). Gauri Shanker, Secretary, Income-tax Investigation Commission, made an affidavit dated the 21st September, 1955, wherein he set out the events and circumstances under which Act XXX of 1947 came to be passed. In paragraph 4 of that affidavit he stated :

" It was found that during the period of the last war large fortunes had been made by businessmen. Controls imposed by Government on prices and distribution were often evaded and secret profits were made and kept outside the books and often kept invested in shares and real property acquired in the names of benamidars or in cash purchases of gold, silver and jewellery. The machinery of income-tax administration was unable to cope with the large number of complex cases that had to be dealt with, during the war years and a few years after its termination. As there had been a large scale evasion of tax during this period, it became necessary in the public interests to investigate cases of evasion of income-tax and bring under assessment huge profit that had escaped assessment. As a preliminary step in this direction, a demonetisation Ordinance was passed in January, 1946, sterilising the high denomination notes in which secret profits earned during the war years had been partly kept and calling for a statement regarding the source of such profits. This was followed by the Income-tax Investigation Commission Bill. In view of the prolonged and complicated enquiries that had to be made to unearth these secret war profits and bring them under assessment a special Commission was constituted to enquire into the profits made since 1939 but which had escaped assessment. I say that what is intended to investigate is evasion of payment of taxation which could reasonably be called 'substantial' and therefore the classification is real classification. The statute merely leaves the selective application of the law to be made by the executive authorities in accordance with the standards indicated in the Act itself. "

This affidavit furnished the background and the surrounding circumstances obtaining at the time when Act XXX of 1947 was enacted and if this background is taken into account it would be obvious that the substantial evaders of payment of income-tax whose cases were referred by the Central Government to the Commission formed a class by themselves and there was a rational basis of classification in the enactment of section 5(1) of the Act.

The argument that the terms of section 5(1) enabled the Central Government to pick and choose the cases of particular individuals falling within that category leaving the cases of other persons falling within the same category to be dealt with in accordance with the provisions of section 34(1) of the Indian Income-tax Act as it stood prior to the amendment of 1948 has been already dealt with in our judgment in A. Thangal Kunju Musaliar v. M. Venkatachalam Potti and Another, while dealing with the corresponding provisions of section 5(1) of the Travancore Act XIV of 1124 and section 47 of the Travancore Act XXIII of 1121 and we have pointed out that so far as the Indian Income-tax Act as it was in existence on the 18th April, 1947, (which was the date on which Act XXX of 1947 received the assent of the Governor-General), stood unamended by Act XLVIII of 1 948, the cases of persons who fell within the category of substantial evaders of income-tax within the meaning of section 5(1) of the Act could not have been dealt with under the provisions of section 34(1) of the Indian Income-tax Act and, therefore, there was no discrimination and no violation of the fundamental right guaranteed under article 14 of the Constitution.

The other argument that the selection of the persons whose cases were to be referred by the Central Government for investigation to the Commission was left to the unguided and uncontrolled discretion of the executive or the administrative officials also has been dealt with in that judgment and we need not repeat our reasons for rejecting the same.

If the provisions of section 34(1) of the Indian Income-tax Act as it stood unamended by Act XLVIII of 1948 (which corresponded with the provisions of section 47 of the Travancore Act XXIII of 1121 ) had been the only provisions to be considered we would have reached the same conclusion as we did in A. Thangal Kunju Musaliar v. M. Venkatachalam Potti and Another. The position, however, in the present case is materially affected by reason of the two amendments which were made in section 34 of the Indian Income-tax Act, one in 1948 by the enactment of Act XLVIII of 1948 and the other in 1954 by the enactment of Act XXXIII of 1954.

Section 34 as amended by Act XLVIII of 1948 read as under :

Section 34(1) : If--

(a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or

(b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed, he may in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 2.2 and may proceed to assess or re-assess such income, profits or gains or recompute the loss or depreciation allowance ; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section :.......................... "

Act XXXIII of 1954 introduced into section 34 sub-sections (1-A) to (1-D). Section 34 (1-A) which is material for our purposes provides :

" Section 34 (1-A) : If, in the case of any assessee, the Income-tax Officer has reason to believe--

(i) that income, profits or gains chargeable to income-tax have escaped assessment for any year in respect of which the relevant previous year falls wholly or partly within the period beginning on the 1st day of September, 1939, and ending on the 31st day of March, 1946 ; and

(ii) that the income, profits or gains which have so escaped assessment for any such year or years amount, or are likely to amount, to one lakh of rupees or more ;

he may notwithstanding that the period of eight years or, as the case may be, four years specified in sub-section (1) has expired in respect thereof, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22, and may proceed to assess or re-assess the income, profits or gains of the assessee for all or any of the years referred to in clause (i), and thereupon the provisions of this Act (excepting those contained in clauses (i) and (iii) of the proviso to sub-section (1) and in sub-sections (2) and (3) of this section) shall, so far as may be, apply accordingly :

Provided that the Income-tax Officer shall not issue a notice under this sub-section unless he has recorded his reasons for doing so, and the Central Board of Revenue is satisfied on such reasons recorded that it is a fit case for the issue of such notice :

Provided further that no such notice shall be issued after the 31st day of March, 1956."

Amended section 34(1) of the Indian Income-tax Act was substantially different from the old section 34(1) which was in operation up to the 8th September, 1948. The words " if in consequence of definite information which has come into his possession the Income-tax Officer discovers that income, profits or gains chargeable to income-tax have escaped assessment in any year...................... which appear in the old section were substituted by the words " If the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee.............................. income, profits or gains chargeable to income-tax have escaped assessment ....................... The requisites of (i) " definite " information (ii) which had " come into " possession of the Income-tax Officer and in consequence of which (iii) he " discovers " that income, profits or gains chargeable to income-tax had escaped assessment, were no longer necessary and the only thing which was required to enable the Income-tax Officer to take proceedings under section 34(1) as amended was that he should have reason to believe that by reason of the omission or failure on the part of the assessee income, profits or gains chargeable to income-tax had escaped assessment for a particular year. Whereas before this amended section 34(1) came to be substituted for the old section 34(1) there was no comparison between the provisions of section 5(1) of Act XXX of 1947 and section 34(1) of the Indian Income-tax Act as it then stood, the provisions of section 34(1) as amended after the 8th September, 1948, could stand comparison with the provisions of section 5(1) of Act XXX of 1947 and the cases which were covered by section 5(1) of Act XXX of 1947 could be dealt with under the procedure laid down in section 34(1) of the Indian Income-tax Act. After the 8th September, 1948, therefore, even in the case of substantial evaders of income-tax who were a distinct class by themselves intended to be treated by the drastic and summary procedure laid down by Act XXX of 1947, some cases that were already referred by the Central Government for investigation by the Commission could be dealt with under that Act and other cases, though falling within the same class or category, could be dealt with under the procedure prescribed in the amended section 34(1) of the Indian Income-tax Act. The persons who were thus dealt with under section 34(1) of the Indian Income-tax Act had available to them the whole procedure laid down in that Act including the right to inspect documents and the right to question the findings of fact arrived at by the Income-tax Officer by the procedure of appeal and revision and ultimate scrutiny by the Income-tax Appellate Tribunal which was denied to those persons whose cases had been referred by the Central Government for investigation by the Commission under section 5(1) of Act XXX of 1947.

The juxtaposition of dates is also very instructive. It may be noted that in Act XXX of 1947 as it was originally enacted, the period up to which the Central Government could make the references to the Commission for investigation was laid down in section 5(1) of the Act to be 30th June, 1948. This period was extended to the 1st September, 1948, by the Taxation on Income (Investigation Commission) (Second Amendment) Act, 1948 (XLIX of 1948). Act XLIX of 1948 was passed by the Central Legislature and received the assent of the Governor-General on the 8th September, 1948, the same day on which Act XLVIII of 1948 which amended section 34(1) of the Indian Income-tax Act also received the assent of the Governor-General. Both these Acts, viz., Act XLVIII of 1948 and Act XLIX of 1948, were passed simultaneously and obviously with a view to bring the provisions of section 5(1) of Act XXX of 1947 and section 34(1) of the Indian Income-tax Act in tune with each other. It appears to have been realized that the substantial evaders of income-tax in respect of whom the Central Government had prima facie reasons for believing that they had to a substantial extent evaded payment of taxation on income could not have their cases referred for investigation by the Commission after the 30th June, 1 948, that having been the time limit originally prescribed in section 5(1) of the Act. It also appears to have been felt that the period could not possibly be extended beyond the 1st September, 1948, with the result that apart from the cases of substantial evaders of income-tax which were referred by the Central Government for investigation to the Commission up to the 1st September, 1948, there would be a large number of such cases which though they could not be referred for investigation to the Commission would have to be dealt with under the ordinary provisions for taxation of income that had escaped assessment available in section 34 and the cognate sections of the Indian Income-tax Act. As section 34(1) then stood, the requisites of definite information coming into the possession of the Income-tax Officer in consequence of which he discovered that income, profits or gains chargeable to income-tax had escaped assessment would certainly not have availed the Government in tracking down these substantial evaders of income-tax and it appears, therefore, to have been thought necessary that section 34(1) of the Indian Income-tax Act should be amended so as to enable the Income-tax Officer to take proceedings thereunder if he had reason to believe that by reason of omission or failure on the part of the assessee income, profits or gains chargeable to income-tax had escaped assessment for the relevant period. An amendment of section 34(1) in this manner would enable Government to pass on the requisite information which they had obtained in regard to the substantial evaders of income-tax to the Income-tax Officers concerned and ask the Income-tax Officers to take proceedings against those evaders of income-tax under the amended section 34(1) of the Indian Income-tax Act. That appears to have been the real object of the amendment of section 34(1) of the Indian Income-tax Act with effect from the 8th September, 1948. The Commission would proceed with the references which were made to them up to the 1st September, 1948, and Income-tax Officers concerned would take the requisite proceedings under section 34(1) of the Indian Income-tax Act as amended after the 8th September, 1948, against all persons whose income, profits or gains had escaped assessment including substantial evaders of income-tax who cases would certainly have been referred by the Central Government for investigation to the Commission if it had been possible for them to do so before the 1st September, 1948. After the 8th September, 1948, there were two procedures simultaneously in operation, the one under Act XXX of 1947 and the other under the Indian Income-tax Act with reference to persons who fell within the same class or category, viz., that of the substantial evaders of income-tax. After the 8th September, 1948, therefore, some persons who fell within the class of substantial evaders of income-tax were dealt with under the drastic and summary procedure prescribed under Act XXX of 1947, while other persons who fell within the same class of substantial evaders of income-tax could be dealt with under the procedure prescribed in the Indian Income-tax Act after service of notice upon them under the amended section 34(1) of the Act. Different persons, though falling under the same class or category of substantial evaders of income-tax would, therefore, be subject to different procedures, one a summary and drastic procedure and the other a normal procedure which gave to the assessees various rights which were denied to those who were specially treated under the procedure prescribed in Act XXX of 1947.

The legislative competence being there, these provisions, though discriminatory, could not have been challenged before the advent of the Constitution. When, however, the Constitution came into force on the 26th January, 1950, the citizens obtained the fundamental rights enshrined in Part III of the Constitution including the right to equality of laws and equal protection of laws enacted in article 14 thereof, and whatever may have been the position before the 26th January, 1950, it was open to the persons alleged to belong to the class of substantial evaders thereafter to ask as to why some of them were subjected to the summary and drastic procedure prescribed in Act XXX of 1947 and others were subjected to the normal procedure prescribed in section 34 and the cognate sections of the Indian Income-tax Act, the procedure prescribed in Act XXX of 1947 being obviously discriminatory and, therefore, violative of the fundamental right guaranteed under article 14 of the Constitution.

It would be no answer to suggest that those substantial evaders whose cases were referred by the Central Government for investigation by the Commission before the 1st September, 1948, formed a class by themselves leaving others though belonging to the same class or category of substantial evaders of income-tax to be dealt with by the ordinary procedure prescribed in the Indian Income-tax Act without infringing the fundamental right guaranteed under article 14 of the Constitution. A similar argument had been advanced before us by the learned Attorney-General appearing for the Commission in Shree Meenakshi Mills' case. The ground which he had urged was " that the class of persons dealt with under section 5(1) of Act XXX of 1947 was not only the class of substantial tax-dodgers but it was a class of persons whose cases the Central Government, by 1st of September, 1948, had referred to the Commission and that class had thus become determined finally on that date, and that that class of persons could be dealt with by the Investigation Commission under the drastic procedure of Act XXX of 1947, while section 34 of the Indian Income-tax Act as amended empowered the Income-tax Officer to deal with cases other than those whose cases had been referred under section 5(1) to the Investigation Commission ........ Mahajan, C.J., who delivered the judgment of the Court, dealt with this argument at page 719 as under :

" As regards the first contention canvassed by the learned Attorney-General it seems to us that it cannot stand scrutiny. The class of persons alleged to have been dealt with by section 5(1) of the impugned Act was comprised of those unsocial elements in society who during recent years prior to the passing of the Act had made substantial profits and had evaded payment of tax on those profits and whose cases were referred to the Investigation Commission before 1st September, 1948. Assuming that evasion of tax to a substantial amount could form a basis of classification at all for imposing a drastic procedure on that class, the inclusion of only such of them whose cases had been referred before 1st September, 1948, into a class for being dealt with by the drastic procedure, leaving other tax evaders to be dealt with under the ordinary law, will be a clear discrimination for the reference of the case within a particular time has no special or rational nexus with the necessity for drastic procedure ........"

These observations were made to repel the particular argument of the learned Attorney-General but they did not lay down that in fact section 5(1) was confined to such a limited class.

We are further supported in this view by the fact that by the later amendment of section 34 of the Indian Income-tax Act effected by Act XXXIII of 1954, the time limit for the issue of notice under section 34 (1-A) of the Indian Income-tax Act has been fixed as the 31st day of March, 1956. It is, therefore, clear that the period originally fixed for the reference of the cases of substantial evaders of income-tax for investigation by the Commission, viz., 30th June, 1948, or the extended period, viz., 1st September, 1948, provided in section 5(1) of Act XXX of 1947 or the period fixed by the new section 34(1-A) of the Indian Income-tax Act, viz., 31st day of March, 1956, was not a necessary attribute of the class of substantial evaders of income-tax but was merely an accident and a measure of administrative convenience and was not an element in the formation of the particular class of substantial evaders of income-tax.

It follows, therefore, that after the inauguration of the Constitution on the 26th January, 1950, the persons whose cases were referred for investigation by Central Government to the Commission up to the 1st September, 1948, could, to use the words of Mahajan, C.J., in Sree Meenakshi Mills' case at page 718 ask :

" why are we now being dealt with by the discriminatory and drastic procedure of Act XXX of 1947 when those similarly situated as ourselves can be dealt with by the Income-tax Officer under the amended provisions of section 34 of the Act ? Even if we once bore a distinctive label that distinction no longer subsists and the label now borne by us is the same as is borne by persons who can be dealt with under section 34 of the Act as amended; in other words, there is nothing uncommon either in properties or in characteristics between us and those evaders of income-tax who are to be discovered by the Income-tax Officer under the provisions of amended section 34. "

We may also add, adopting the same phraseology, that in our judgment, no satisfactory answer can be returned to this query because the field on which the amended section 34(1) operated from and after the 26th January, 1950, included the strip of territory which was also occupied by section 5(1) of Act XXX of 1947 and two substantially different laws of procedure, one being more prejudicial to the assessee than the other, could not be allowed to operate on the same field in view of the guarantee of article 14 of the Constitution.

The result, therefore, is that barring the cases of persons which were already concluded by reports made by the Commission and the directions given by the Central Government under section 8(2) of Act XXX of 1947 culminating in the assessment or re-assessment of the escaped income, those cases which were pending on the 26th January, 1950, for investigation before the Commission as also the assessment or re-assessment proceedings which were pending on the 26th January, 1950, before the Income-tax Officers concerned in pursuance of the directions given by the Central Government under section 8(2) of the Act would be hit by article 14 of the Constitution and would be invalidated. The R.C. Cases 516, 517 and 518 relating to M. Ct. M. Chidambaram Chettiar, M. Ct. Muthiah Chettiar and Devanai Achi were pending before the Commission on the 26th January, 1950, the report therein not having been made by the Commission till the 26th August, 1952, and the Commission had, after the 26th January, 1950, no jurisdiction to complete the investigation and make their report, the whole procedure being violative of the fundamental right guaranteed to the petitioners under article 14 of the Constitution.

This position was not in terms argued before us by the learned counsel for the petitioners. It was urged in the first instance that the case was governed by our decision in Shree Meenakshi Mills' case, on the basis that by reason of the applications to the Commissioner of Income-tax, Madras, made by the petitioners under section 8(5) of the Act for reference to the High Court on questions of law arising out of the Income-tax Officer's re-assessment orders above referred to, the proceedings under Act XXX of 1947 had not become final and the petitioners were, therefore, entitled to relief on the ratio of our judgment in that case. Reliance was placed in support of this position on the provisions of section 8(4) of the Act :

" In all assessment or re-assessment proceedings taken in pursuance of a direction under sub-section (2), the findings recorded by the Commission on the case or on the points referred to it shall, subject to the provisions of sub-sections (5) and (6), be final ; but no proceedings taken in pursuance of such direction shall be a bar to the initiation of proceedings under section 34 of the Indian Income-tax Act, 1922 (XI of 1922)."

Sub-section (5) has reference to the application made by the assessee to the Commissioner of Income-tax to refer to the High Court any question of law arising out of the assessment or reassessment orders and sub-section (6) has reference to the power of the Commission either of their own motion or on the application of the person concerned or of the Central Government to correct clerical or arithmetical mistakes in their report or errors therein arising from any accidental slip or omission. These provisions contained in sub-sections (5) and (6), however, would not make the findings recorded by the Commission any the less final. These findings were invested with finality. subject to this that if the High Court, on reference under sub-section (5), gave any opinion which would require a revision of those findings or if any clerical or arithmetical mistakes were found or errors were detected arising from accidental slip or omission within the meaning of sub-section (6) which also required some alterations in the findings, these findings would be divested of their finality and would have to be revised accordingly. The assessment or reassessment orders made by the Income-tax Officers based upon those findings would also be binding on the assessees subject only to the result of the reference, if any, made to the High Court on questions of law arising out of such orders.

If this was the true position, it could not be urged that by reason of the pendency of the applications for reference to the High Court the proceedings under Act XXX of 1947 had not been concluded against the petitioners and it could not also be urged that when Act XXXIII of 1954 was enacted introducing section 34(1-A) in the Income-tax Act with effect from the 19th July, 1954, the R.C. Cases 516 to 518 were pending and the whole proceedings under Act XXX of 1947 against the petitioners were invalidated. As a matter of fact the report. had been made by the Commission against the petitioners as early as the 26th August, 1952, the Central Government had given the directions under section 8(2) for reassessment of the petitioners on the 16th September, 1952, and the re-assessment orders for all the years except the year 1942-43 had been made by the Income-tax Officer against them by the 12th May, 1954, which was long before Act XXXIII of 1954 came into operation. All these re-assessments had thus become binding on the petitioners and were not affected by the mere pendency of the applications for reference to the High Court made by them to the Commissioner of Income-tax, Madras, under section 8(5) of the Act.

There is also a further point to be considered in this connection and it is that whatever discriminatory procedure the petitioners were subjected to by reason of the reference of their cases by the Central Government to the Commission under section 5(1) of the Act had been completed long before the Act XXXIII of 1954 came into operation and the only further procedure which they would be subjected under the provisions of Act XXX of 1947 would be that of a reference to the High Court on questions of law arising out of the orders of re-assessment if these applications were granted either by the Commissioner of Income-tax, Madras, or by the High Court on further application. In the event of such reference being made, the petitioners had the additional advantage of having their references heard by the High Court in a Bench constituted of not less than three Judges as contrasted with the normal procedure obtaining under sections 66 and 66-A of the Indian Income-tax Act under which the references could be heard by a Division Bench of the High Court. Whatever was, therefore, the procedure to which the petitioners would be subjected to under Act XXX of 1947, after the coming into operation of Act XXXIII of 1954 it was, instead of being prejudicial to them, really advantageous to them, and following our decisions in the cases of Syed Qasim Razvi v. The State of Hyderabad and Others, and Habeeb Mohamed v. The State of Hyderabad, we are of the opinion that the further proceedings, if any, which could be taken under the provisions of Act XXX of 1947 would not be at all discriminatory and violative of the fundamental right guaranteed under article 14 of the Constitution.

The only relief which the petitioners would have been entitled to in that event would have been one in regard to the re-assessment proceedings for the year 1942-43 which were pending before the Income-tax Officer by virtue of the notice under section 34 issued by him to the petitioners on the 19th March, 1954. Reliance was placed upon a decision of the Allahabad High Court reported in Ganagadhar Baijnath and Others v. Income-tax Investigation Commission, etc., in support of this position. The learned Solicitor-General did not contest this position but undertook on behalf of the Income-tax authorities that they will not proceed against the petitioners for the reassessment for the year 1942-43 in pursuance of the notice under section 34 served upon them in that behalf.

This would have been the only relief to which the petitioners would have become entitled on the main contention urged by them in their petition. The petitioners are, however, entitled to succeed on the alternative contentions which were raised by them as the result of the conclusion which we have reached above in regard to the proceedings pending before the Commission having become discriminatory after the 26th January, 1950, by reason of section 5(1) of the Act having become unconstitutional after the inauguration of the Constitution on that date.

In the result, the petitioners will be entitled to the issue of a writ of certiorari quashing the report of the Income-tax Investigation Commission dated the 29th August, 1952, and the assessment orders of the Income-tax Officer for the years 1940-41, 1941-42 and 1943-44 to 194849 as being unconstitutional, null and void, and also to the issue of a writ of prohibition against the respondents from implementing the findings of the Investigation Commission referred to above with regard to the year 1942-43 and we do order that such writs do issue against the respondents accordingly. The respondents will pay the petitioners' costs of this petition.

JAGANNADHADAS, J.--This petition raises the question whether section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947 (Act XXX of 1947) (hereinafter referred to as the Investigation Commission Act) is unconstitutional as offending article 14 of the Constitution and has therefore become void on the coming into force of the Constitution on the 26th January, 1950. This question was specifically left open in the two previous decisions of this Court, viz., Suraj Mall Mohta & Co. v. A. V. Visvanatha Sastri, and Shree Meenakshi Mills Ltd. v. A. V. Visvanatha Sastri. Almost the identical question arose in the Travancore Appeals, in which judgment has just now been delivered. The provision with which we were concerned in those appeals is section 5(1) of Travancore Act XIV of 1924 which is almost in identical terms as section 5(1) of the Investigation Commission Act. We have held that this section of the Travancore Act did not, on the coming into operation of the Constitution, violate article 14 thereof and that it accordingly continued to be valid. This result was based on the following conclusions :

(a) The expression " a person who has to a substantial extent evaded payment of taxation on income " has to be interpreted having regard to the background or the circumstances that preceded at the time the section came to be enacted and which were disclose in the affidavit filed in this Court by the Secretary of the Investigation Commission and so interpreted the word " substantial " indicates with reasonable certainty the class of persons intended to be subjected to the drastic procedure of the Act.

(b) The selective application of the law to persons in this class cannot be considered invalid since the selection is guided by the very objective set out in section (1) itself.

(c) The fact that some persons may escape the application of the law is not necessarily destructive of the efficacy of the provision.