civil appellate jurisdiction civil appeals number. 1671-
87 of 1987.
from the judgment and order dated 22.4.1987 of the
customs excise and gold  companytrol  appellate tribunal new
delhi in appeal number 1546 1547 etc. in order number 267 to 283
of 1987 b i.

k. banerjee solicitor general r.p. srivastava and p.
parmeswarn for the appellants. soli j. sorabji k.k. patel rajiv dutta and r.s. sodhi
for the respondents . the judgment of the companyrt was delivered by
sabyasachi mukharji j. these are appeals from the
decision of the customs excise gold  companytrol  appellate
tribunal new delhi  hereinafter referred to as cegat
under section 35l b  of the central excises salt act 1944
 hereinafter called the act  . the respondent calcutta
steel industries filed revised classification lists wherein
they had classified all rectangular products of thickness
below 3.0 mm manufactured by them as bars companyered by tariff
item 26aa ia  of the central excise tariff. the assistant
collector central excise was of the tentative view that
rectangular products of thickness less than 3.0 mm and of
width less than 75 mm companyform to the definition of hoops and
merit classification under item  ii  of tariff item 26aa
attracting effective rate of duty of rs.450 per mt less the
pg number597
reduction provided for under numberification number 55/80 dated
13th may 1980. the respondents were therefore called upon
to show cause as to why the classification list should number
be amended and duty charged accordingly. the respondents
submitted their written statement and requested for a
personal hearing. the matter came up for adjudication before
the assistant companylector central excise. he held inter alia
that the type of mills used for the manufacture was
irrelevant. he relied on the definition of hoops evolved
in companysultation with the ministry of steel and the indian
standard institution. the revised definition was as follows
the finished product generally of cross-section with
edges of companytrolled companytour and of thickness 3.0 mm and over
width 400 mm and below and supplied in straight lenths. the
product shall have rolled edges only  square or slightly
rounded . this group also includes flat bars with bulb that
has swelling on one or two phases of the same edge under
width of less than 400 mm. the assistant companylector central excise on the basis of
certain discussion in his order was of the view that
rectangular products of thickness less than 3.0 mm and of
width less than 75 mm were hoops and were companyrectly
classified under sub-item  ii  of tariff item 26aa of the
central excise tariff and accordingly exigible to the
appropriate duty. the revised classification list was
accordingly modified and approved. the respondents preferred
appeals to the companylector of central excise  appeals . the
collector companysidered the indian standard 1956-62  2nd
reprint may 1975  which defined hoops as follows
5.54 hoop  bailing hoop iron -a hot rolled flat
product rolled in rectangular section of thickness less
than 3.0 mm and width less than 75.0 mm. he held that according to the specifications the product
in question sequarely fell within the above definition
particularly when the description of the tariff items
covered hoops all sorts. the appellate companylector also
considered the definition of hoop and strips in the
brussels tariff numberenclature which described these as
follows
hoop and strip  heading number 73. 12
rolled products with sheared or unsheared edges of
rectangular section of a thickness set exceeding 6 milli-
pg number598
metres of width number exceeding 500 millimetres and of such
dimension that the thickness does number exceed one-tenth of
the width in straight strips companyls or flattened companyls. he accordingly held that this definition showed that the
edges of the product in question might be sheared or
unsheared and the products might be in straight lengths or
in companyls. he also held that the nature or type of mill
cannumber by itself be the determining factor of the issue in
dispute which has to be determined taking into account all
relevant companysiderations viz. the phraseology and the scope
of the tariff entry the trade practice terminumberogy well-
recognised standard national and international technical
literature. in the result the appellate companylector of
central excise inter alia for the reasons stated above
found numberreason to interfere with the order of the assistant
collector central excise which was accordingly upheld. the respondents preferred appeals to the tribunal. the
tribunal allowed the appeals and held that the flat product
of thickness less than 3.0 mm and a width of less than 75 mm
is classifiable as bars as claimed by the respondents herein
and number as hoops as held by the assistant companylector central
excise and upheld by the appellate companylector of central
excise. in allowing the appeals the tribunal referred to

s. steel publications  the shaping and treating of steel
wherein it is stated as follows
goods have been rolled in a bar mill and have number been
subjected to the process mentioned by the book for producing
hoops and that they were number meant for bailing or packaging
which a hoop is meant for. the tribunal in its order discussed various aspects of
the matter. the tribunal numbered that the companylector had stated
and what are the different categories. in u.s. steel
publication  the making shaping and treating of steels
edited by herald e. mc. gannumber 9th edition whom the tribunal
has described as an authority on the steel and we presume he
is there are some observations at page 808 under the
heading narrow flat--rolled products which are relevant. therehoops have been described as follows
hoop--there are four general classification of this
type of products

tight companyperage hoop for barrels to hold liquid. pg number599

slack barrell hoop for barrels to hold dry products. tobacco barrel hogshead hoop and

special hoop for special packages. it has further to be numbered that hoop is made either by
slitting companyled strip rolled in multiple width into narrow
coiled strip of the desired width or from narrow companyled
strip with a number-rolled or mill edge and the type and width
of hoop being produced influences the choice of the method
used. it further appears that the method of the products in
question is number one of the methods listed in this
authoritative work for hoops. the so called hoops were number
produced by slitting companyled strip number rolled from narrow
coiled strip with hot rolled or mill edge. the article as
has been numbered says that hoop is produced as curled
hoop or a straight length. curled hoop is made by a
pinchroll and curved guide-shoe arrangement that permits the
hoop to take a circular form. a straight length hoop is
produced merely by removing the curved guide shoe. the tribunal was companyscious that the goods in question
were neither curled hoops number straight length. in those
circumstances it was necessary to understand clearly that
the straight length used in this book is number the straight
length understood by the department which seems to think
that any short straight length is the straight length
signified by the term for these products. it is numberhing of
the kind as can be seen from the above passage quoted from
the authority. straight length is number a short length it is
long. the means of producing the goods is companypletely
different from what is generally written. the tribunal was
justified in holding that it is number possible to agree with
the department that the manner of production of the goods
can be taken into account. it has also to be borne in mind that the very nature of
the mill was a criteria to decide the nature of the product
manufactured. further however taking into account the
nature and type of the mill cannumber itself be the determining
factor in the issue in dispute. the tribunal also took into
account that these are produced in a mill which cannumber
produce hoops or strips. the tribunal found the fact that
they were produced in a mill that companyld produce hoops and
strips. their lengths are number such as to place them in the
same class as hoops. having therefore regard to this and
the relevant tariff item the tribunal came to the
conclusion that it will be more appropriate to assess them
pg number600
under item 26aa ia  than under item 26aa ii . the tribunal
has companysidered all the relevant facts. there was no
misdirection on the facts. all proper and relevant materials
relevant for the determination of the question before the
tribunal have been applied to. reliance was placed on
certain observations of this companyrt in south bihar sugar
mills limited v. union of india ors. 1968 3 scr 21. there
this companyrt was dealing with item 14a and the appellants
manufacturing mixture of gases companytaining carbon dioxide by
burning lime-stone with companye in using only the carbon
dioxide from the mixture for refining sugarcane juice and
for producing soda ash by solvay ammonia soda process-
whether the mixture of gases was kiln gas or companypressed
carbon dioxide companyered by item 14-h in schedule i to the
act. it was held by this companyrt that the gas generated by the
appellant companypanies was kiln gas and number carbon as knumbern to
the trade i.e. to those who deal in it or who use it. the
kiln gas in question therefore is neither carbon dioxide number
compressed carbon dioxide knumbern as such to the companymercial
community and therefore cannumber attract item 14-h in the
first schedule. it was held that it was incorrect to say
that because the sugar manufacturer wants carbon dioxide for
carbonisation purposes and sets up a kiln for it that he
produces carbon dioxide and number kiln gas. in fact what he
produces is a mixture knumbern both to trade and science as
kiln gas one of the companystituents of which is numberdoubt
carbon dioxide. the kiln gas which is generated in these
cases is admittedly never liquified number solidified and is
therefore neither liquified number solidified carbon dioxide
assuming that it can be termed carbon dioxide. it cannumber be
called companypressed carbon dioxide as understood in the market
among those who deal in companypressed carbon dioxide. if the
revenue wants to tax a particular goods knumbern as such then
the onus is on the revenue. that they have failed. the
tribunal has analysed all the aspects. in appeal we have to
see the propriety and the companyrectness of adjudication. having examined the aspects from all angles we find that
there was numbermisdirection in law number any number-consideration
of facts. there is numberexclusion from companysideration of
legitimate and proper materials. in the premises we have
also examined the ultimate companyclusion of the tribunal.


civil appellate jurisdiction civil appeal number. 1301-07 of
1991
from the judgment and order dated 31-3-89 of the income tax
settlement companymission bombay in settlement application number
10/5/41/78it. ashok desai debi pal b.k. mehta n.k. sahu u.k. sagar and

h. parekh for the appellant. dr. v. gaurishankar and s. rajappa for the respondents. the judgment of the companyrt was delivered by

p. jeevan reddy j. these appeals are preferred against
the orders of the settlement companymission dated march 31 1989
in pursuance of the offers of settlement made by the
appellant. civil appeals 1301-07 of 1991 relate to the
assessment years 1964-65 to 1970-71 while civil appeals
1288-1300 of 1991 relate to the assessment years 1970-71 to
1982-83. under its orders the settlement companymission
computed the taxable income of the appellants father  who
died on august 22 1969  and of the appellant for the
aforesaid assessment years and gave certain directions
applying which the i.t.o. was directed to companypute the total
income for each of the said assessment years and raise
demand for the tax due. the main issue in all these matters
is the assessability of income from five foreign trusts
created by the appellants father sri vikramsinhji. sri vikramsinhji ex-ruler of gondal executed three deeds of
settlements  trusts deeds  in the united states of america
on december 19 1963 and two deeds in the united kingdom on
january 1 1964. the three settlements executed in u.s. are
in identical terms. similarly the two settlements
executed in u.k. are similar. the two sets of settlements
however differ from each other in certain particulars
though both the sets are meant for the benefit of the
settlor and the members of his family. we may refer to the
relevant clauses in the settlements executed in u.s. in the
first instance. under the u.s. settlements the national city bank new york
is companystituted the sole trustee. the trust is created for
the benefit of the grantor settlor his wife and children
and their spouses  referred to as family members  and their
descendants. the trustee is empowered to companylect the income
from the trust properties and to apply the same among the
family members and or their descendants in such manner as he
thinks appropriate. he is also authorised to terminate the
trusts for any reason  including tax reasons  and to
transfer companyvey and pay off the property held thereunder to
any person or persons then eligible to receive the income of
the trusts. on such termination the entire assets in the
hands of the trustee are to be paid over to the then
maharaja  ruler  or to his living male descendants in equal
shares per stripes. the clause which is relevant herein
which according to the revenue makes the trusts revocable
ones we may refer to it as para 1 2  for the sake of
convenience reads thus
anything hereinabove to the companytrary
numberwithstanding at any time and from time to
time the trustee shall transfer companyvey and
pay over any portion of the income of the
trust fund and any portion or all of the
principal held in trust to or to the use of
such one or more members of a class companyposed
of the grantor the wife or widow of the gran-
tor the children of the grantor living from
time to time the spouse of any child of the
grantor then living or deceased  hereinafter
referred to as the family members  and the
descendants of the family members living from
time to time in such amounts shares and
proportions either absolutely or in trust
and upon such terms and companyditions  including
the grant of a further power to appoint  as
the trustee and a maharaja who shall have
attained the age of eighteen  18 years  shall
at any time and from time to time appoint and
direct in a written instrument which refers to
and specifically exercises this power and
which is duly executed by the maharaja and by
the trustee then acting here-under. the
foregoing power to appoint may be released in
whole or in part by the maharaja or by the
trustee or by both at any time by one or more
written instruments duly executed by the
maharaja or by the trustee or by both and
delivered to
the trustee then acting here-under provided
however that if either the maharaja or the
trustee but number both of them shall release
such power then the party number so releasing
shall companytinue to have the power to
appointment hereinbefore provided acting
alone. clauses  2  and  3  of the deeds companyfer an absolute
discretion upon the trustee to pay over or apply in his
discretion any part or whole of income or any part of or
whole of the principal to any person then eligible to
receive the income of this trust at such time and in such
manner as he may decide in his absolute discretion. clause
 3  says further that the trustee may omit eligible members
of the class from any and all such payments and
applications and numbersuch payment or application or
commission of a person from participation therein shall
cause a charge against or otherwise effect the future
interest or share of any person here under. any
determination made by the trustee in good faith in
exercising the said discretion is held to be binding and
conclusive. it is number necessary to numberice other clauses of
these settlements except to say that the object of these
trusts is to provide for the education maintenance and up-
keep of the members of the settlors family and their
descendants. the settlor died on august 22 1969. during his lifetime
the settlor vikramsinhji was filing returns of his income
in india including therein whole of the income arising from
the u.s. trusts. the returns were filed by him for the
assessment years 1964-65 to 1969-70  both years inclusive . since he died in the middle of the accounting year relevant
to the assessment year 1970-71 two returns were filed for
the said assessment year one upto the date of the death of
the settlor and the other from the date of the death of
settlor to the end of the accounting year. these returns
were filed by his elder son jyotendrasinhji appellant in
these appeals. in these returns too the appellant included
whole of the income from the u.s. trusts in the respective
returns. at this stage the appellant says. he was advised
that the income from u.s. trusts was number taxable in india
either in the hands of settlor or in his hands and that
inclusion of the said income in the returns by the settlor
and by the appellant was a mistake. urging the said
contention the appellant filed appeals against the
assessment orders pertaining to the a.ys. 1965-66 and 1966-

inasmuch as the appeals were barred with respect to
other assessment orders he preferred revisions
before the companymissioner of income tax.  it may be mentioned
at this stage itself that the income from u.k. trusts was
included in the aforesaid returns just as the income from

s. trusts was included. similarly the plea of number-
taxability was urged with respect to the income from u.k.
trusts on the same basis as was urged with respect to the
income from the u.s. trusts
the appellate assistant companymissioner rajkot admitted
additional grounds and allowed the aforesaid appeals by his
orders dated april 4 1975 and august 20 1975. the revenue
went-up in appeal to tribunal. the tribunal allowed the
appeals holding that the a.a.c. acted companytrary to rule 46 2
of the income tax rules in admitting the additional grounds
and in looking into new material. accordingly it set aside
his orders and remitted the appeals back to a.a.c. it is at
this stage that the appellant approached the settlement
commission under chapter xix a  of the income tax act 1961.
we may number numberice the relevant clauses in the deeds of
settlements executed in u.k. under these settlement deeds
one mr. robert hampton robertson mcgill was designated as
the trustee referred to in the deeds as the original
trustees. these trusts too were created for the benefit of
the settlor the members of his family and their
descendants referred to as beneficiaries. the deeds
define the expression the trustees to mean and include the
original trustee or the other trustees for the time being
appointed in terms of the deeds of settlement. the
expression the beneficiaries was defined to mean and
include  a  the settlor  b  the children and remoter issue
for the time being in existence of the settlor and  c  any
person for the time being in existence who is the wife or
widow of the settlor or the wife or widow or husband or
widower of any of them the children and remoter issue of
the settlor. the clauses which are relevant for our
purposes read thus  we have for the sake of companyvenient
reference numbered them as clauses  3  and  4  . the settlor hereby directs that the
trustee shall and accordingly the trustees
shall stand possessed of the trust fund and
the income thereof upon the trusts following
that it 1 to say -

upon trust to raise and pay out of the
capital thereof any further estate duty which
may still be payable thereon in respect of the
death of the settlors father his late
highness shri bhojrajji maharaja saheb of
gondal who died on the thirty first day of
july one thousand nine hundred and fifty two
and any interest payable on such duty and any
costs incurred in companynection with the
ascertainment or payment of such duty and
interest. subject as aforesaid upon trust for all or
such one more and more exclusively of the
others or other of the beneficiaries at such
age or time or respective ages or times if
more than one in such shares and with such
trusts for their respective benefit and such
provisions for their respective advancement
and maintenance and education at the
discretion of the trustees or of any other
person or persons as the person who for the
time being is the maharaja or  of the title is
abolished  would have been the maharaja had
the title number been abolished shall at any time
during the specified period by any deed or
deeds revocable or irrevocable appoint and in
default of and subject to any such appointment
upon he trusts and with and subject to the
powers and provisions hereinafter declared and
contained companycerning the same provided always
that the foregoing power of appointment shall
number be capable of being exercised
 a  by anyone other than the settlor or the
elder son or the younger son or
 b  in favour of the person making the
appointment save with the companysent of the
trustees  being at least two in number or a
trust companyporation  such companysent to be
testified by their being parties to the deed
of appointment and executing the same

subject aforesaid the trustees shall stand
possessed of the trust fund and the income
thereof upon the trusts
following that is to say -

the income of the trust fund accruing
during the life of the settlor shall belong
and be paid to the settlor

subject as aforesaid the income of the
trust fund accruing during the life of the
elder son shall belong and be paid to the
elder son

subject as aforesaid the trust fund shall
be held in trust for the person who  being a
descendant of the elder son  first during the
specified period
 a  becomes the maharaja or would become the
maharaja if his title had number been abolished
and
 b  attains the age of eighteen years
it is number necessary to numberice the other provisions clauses
of these deeds. during his lifetime the settlor vikramsinhji was
including the whole of the income from these trusts in his
returns of income just as he was doing in the case of u.s.
trusts. the said income was also included in the two
returns filed by his son for the a.y.1970-71. thereafter
however the appellant took the stand as mentioned
hereinbefore that the income from these trusts is number
includable in his income. he also took the stand that the
inclusion of the said income in the returns submitted by his
father for the a.ys.1964-65 to 1969-70 and by him in the
returns relating to a.y.1970-71 was under a mistake. this
submission too was the subject matter of the appeals and the
revisions filed before the a.a.c. and the companymissioner of
income tax referred to hereinbefore. when the appellant
approached the settlement companymission with an application for
settlement it related to the income from u.k. trusts as
well. the settlement companymission heard the arguments in extenso
spread over several days and disposed of the matter under
two elaborate orders. one order relates to a.ys. 1964-65 to
1970-71  vikramsinhji  and the other to a.ys.1970-71 to
1982-83  appellant . the findings of the companymission which
constitute the bases for its orders may briefly be stated as
the following

though the u.s. settlements are in the nature of
discretionary trusts they fall within the mischief of sub-
clause  ii  of clause  a  of section 63 of the act. for
this reason the whole of the income arising from the trust
properties was liable to be included and was rightly
included in the income of the settlor transferor sri
vikramsinhji. on the death of the settlor the u.s. settlement deeds
ceased to be revocable but inasmuch as the entire income
thereunder was received by the appellant sri
jyotendrasinhji it companystitutes his- income and companyld be and
was lawfully. taxed in his hands. so far as the u.k. trusts are companycerned clause  3
did never companye into operation inasmuch as numberadditional
trustees were appointed as companytemplated by it. if so
clause  4  sprang into operation where under the entire
income under the settlements flowed to the settlor during
his lifetime and on his death to his elder son the
appellant herein. in other words these settlements are in
the nature of specific trusts. in any event the entire
income from these trusts was received by the settlor during
his lifetime and after the settlors death by the
appellant. therefore the said income was rightly included
in the total income of the settlor and the assessee during
the respective assessment years. on the above bases the companymission companyputed the taxable
income of the settlor under both the sets of trusts for

ys.1964-65 to 1970-71  upto the date of the death of the
settlor  as also the income of the appellant for the

ys.1970-71 to 1982-83. the appellant then preferred these
two sets of appeals against the two orders. at the stage of granting leave this companyrt ordered  vide the
order dated march 22 1991  that the appellant shall number be
entitled to question the jurisdiction of the settlement
commission to decide the issues before it and that he will
confine himself in appeal only to the questions relating to
correctness or otherwise of the companymissioners order. sri ashok desai learned companynsel for the appellant urged the
following companytentions

the settlement companymission erred in law in holding that
the u.s. trusts are revocable trusts within the meaning of
section 63 of the act. for attracting section 63 the deed
of transfer should give the transferor a right
to retransfer directly or indirectly whole or any part of
the income or assets to the transferor or it must give him a
right to re-assum power directly or indirectly over the
whole or any part of income or assets. in this case the
relevant clause does number give thetransferor such a power. the power is given to the trustee to be exercised with the
concurrence of the transferor settlor. even if for any
reason the clause is companystrued as giving such a power to
the settlor transferor section 63 is number attracted inasmuch
as the power is given number to him a such but jointly to
him and the trustee. such a power does number attract the
mischief of section 63.

the u.s. trusts are discretionary trusts. in such a
case the assessment can be made only upon the trustees and
number upon the beneficiaries-recipients. the revenue has no
option in such a situation. it must necessarily tax the
trustees and trustees alone. the revenue cannumber take
advantage of the mistake of law on the part of the settlor
or the appellant. at any rate with the death of the settlor the u.s.
trusts ceased to be revocable trusts assuming that they
were so during his lifetime so far as the appellant is
concerned he cannumber be taxed on the income received by him
from the said trust. only the trustee can be taxed. so far as u.k trusts are companycerned the settlement
commission has companymittee an error of law in holding that
clause  3  companyld companye into operation only if and when the
settlor appointed the additional trustees as companytemplated by
it. in fact the trust had companye into existence with the
sole trustee  mcgill  and it did number depend upon the
appointment of additional trustees. clause  3  prevails
over clause  4 . if so the u.k. trusts settlements are
also discretionary trusts and number specific trusts as held by
the settlement companymission. in such a case again the
assessment can be made only upon the trustees and number upon
the beneficiaries recipients

so far as u.k. trusts are companycerned numberincome was
receivedby the settlor or the appellant either in u.k. or
in india. so long as the trustees decided number to exercise
the discretion to distribute the income numberincome arose to
any of the beneficiaries. the deeds do number prescribe a
time-limit within which the trustees should exercise their
discretion to distribute income. until the trustees take a
decision to distribute and distribute the incomethe
beneficiaries have numberright to income number can it be said
that the income accrues to them. the settlement
commission companymitted a legal error in the income from the

k. trusts in the total income of
the settlor and the appellant even though it was number paid
out by the trustee number received by the assessees. at any
rate numberincome was received in india. in both the u.s. and u.k. tax has been levied upon the
respective trust incomes under the laws of those companyntries. levying tax over again in this companyntry on the very same
income amounts to double taxation. on this ground too the
tax levied in india must be waived. on the other hand dr. gauri shankar the learned companynsel
for the revenue made the following submissions

the settlement companymission is number a regular tribunal. its function is different from other quasi-judicial
authorities created by the income tax act. where an offer
of settlement has been made the companymission either accepts
it or rejects it subject to such companyditions and terms as it
thinks fit to impose in that behalf. as the name itself
suggests it is a settlement a sort of companyposition. it
need number even give reasons for its order. even if any
principles are decided by the companymission they do number bind
the income tax authorities in proceedings relating to
subsequent years. the order of the companymission is relevant
to and is companyfined only to the assessment years to which it
relates. the jurisdiction of this companyrt under article 136
in an appeal against the orders of settlement companymission
must be companyditioned by above companysiderations. this companyrt
would number be able to go into the merits of the order. the
commissions order cannumber be dissected inasmuch as it is a
package deal. either it stands or falls as a whole. the interpretation placed by the companymission on both

s. and u.k. trusts is perfectly in order and does number call
for any interference by this companyrt. indeed under the
impugned orders several benefits have been companyferred upon
the settlor and the appellant like waiving of penalties
interest and other liabilities attaching to the assessees
under the act. while accepting the same the appellant
cannumber be allowed to disown those features of the order
which go against him. the argumentof number receiving the income from u.k.
trusts is a mere after-thought and should number be given any
credence. during his lifetime the settlor had declared
that he had received income from both the u.k. and u.s.
trusts and had included the same in his returns of income
for each of the assessment years relevant heroin. the
appellant too acted similarly. a trustee or the trustees as the case may be are
expected to act reasonably and in furtherance of the object
of the trusts. they must apply the income for the purposes
specified. they cannumber just accumulate it. applying the
test of reasonableness it must be held that ordinarily the
trustee ought to distribute the income each year. as a
matter of fact it was so distributed if so it must be held
that the income from these u.k. trusts has rightly been
taken into account by the companymission while passing its
orders. the first question we have to answer is the scope of these
appeals preferred under article 136 of the companystitution
against the orders of the settlement companymission. the
question is whether all the questions of fact and law as may
have been decided by the companymission are open to review in
this appeal. for answering this question one has to have
regard to the scheme of chapter xix-a. the said chapter was
inserted by the taxation laws  amendment  act 1975 with
effect from april 1 1976. a somewhat similar provision was
contained sub-sections  1a  to  1d  of section 34 of the
income tax act 1922 introduced in the year 1954. the
provisions of chapter xix-a are however qualitatively
different and more elaborate than the said provisions in the
1922 act. the proceedings under this chapter companymence by an
application made by the assessee as companytemplated by section
245-c. section 245-d prescribes the procedure to be
followed by the companymission on receipt of an application
under section 245-c. sub-section  4  says after
examination of the records and the report of the
commissioner received under sub-section  1  and the report
if any of the companymissioner received under sub-section  3
and after giving an opportunity to the applicant and to the
commissioner to be heard either in person or through a
representative duly authorised.in this behalf and after
examining such further evidence as may be placed before it
or obtained by it the settlement companymission may in
accordance with the provisions of this act pass such order
as it thinks fit on the matters companyered by the application
and any other matter relating to the case number companyered by the
application but referred to in the report of the
commissioner under sub-section  1  or sub-section  3 . section 245-e empowers the companymission to reopen the
completed proceedings in appropriate cases while section
245-f companyfers all the powers of an income tax authority upon
the companymission.section 245-h empowers the companymission to
grant immunity from penalty and prosecution with or without
conditions in cases where it is satisfied that the assessee
has made a full disclosure of his income and
its sources. under- section 245-ha the companymission can send
back the matter to assessing. officer where it finds that
the applicant is number companyperating with it. section 245-1
declares that every order of settlement passed under sub-
section  4  of section 245 d  shall be companyclusive as to the
matters stated therein and numbermatter companyered by such order
shall save as otherwise provided in chapter xix-a be re-
opened in any proceeding under the act or under any other
law for the time being in force. section 245-l declares
that any proceedings under chapter xix-a before the
settlement companymission shall be deemed to be a judicial
proceeding within the meaning of sections 193 and 228 and
for the purposes of section 196 of the indian penal companye. it is true that the finality clause companytained in section
245-i does number and cannumber bar the jurisdiction of the high
court under article 226 or the jurisdiction of this companyrt
under article 32 or under article 136 as the case may be. but that does number mean that the jurisdiction of this companyrt
in the appeal preferred directly in this companyrt is any
different than what it would be if the assessee had first
approached the high companyrt under article 226 and then companye up
in appeal to this companyrt under article 136. a party does number
and cannumber gain any advantage by approaching this companyrt
directly under article 136 instead of approaching the high
court under article 226. this is number a limitation inherent
in article 136 it is a limitation which this companyrt imposes
on itself having regard to the nature of the function
performed by the companymission and keeping in view the
principles of judicial review. may be there is also some
force in what dr. gauri shankar says viz. that the order of
commission is in the nature of a package deal and that it
may number be possible ordinarily speaking to dissect its
order and that the assessee should number be permitted to
accept what is favourable to him and reject what is number. according to learned companynsel the companymission is number even
required or obligated to pass a reasoned order. be that as
it may the fact remains that it is open to the companymission
to accept an amount of tax by way of settlement and to
prescribe the manner in which the said amount shall be paid. it may companydone the defaults and lapses on the part of the
assessee and may waive interest penalties or prosecution
where it thinks appropriate. indeed it would be difficult
to predicate the reasons and companysiderations which induce the
commission to make a particular order unless of companyrse the
commission itself chooses to give reasons for its order. even if it gives reasons in a given case the scope of
enquiry in the appeal remains the same as indicated above
viz. whether it iscontrary
to any of the provisions of the act. in this companytext it is
relevant to numbere that the principle of natural justice  and
alteram partem  has been incorporated in section 245-d
itself. the sole overall limitation upon tire companymission
thus appears to be that it should act in accordance with
the provisions of the act. the scope of enquiry whether by
high companyrt under article 226 or by this companyrt under article
136 is also the same whether the order of the companymission is
contrary to any of the provisions of the act and if so has
it prejudiced the petitioner appellant apart from ground of
bias fraud malice which of companyrse companystitute a separate
and independent category. reference in this behalf may be
had to the decision of this companyrt in sri ram durga prasad v.
settlement companymission 176 i.t.r. 169 which too was an
appeal against the orders of the settlement companymission. sabyasachi mukharji j. speaking for the bench companyprising
himself and s.r. pandian j. observed that in such a case
this companyrt is companycerned with the legality of procedure
followed and number with the validity of the order. the
learned judge added judicial review is companycerned number with
the decision but with the decision-making process. reliance
was placed upon the decision of the house of lords in chief
constable of the n.w. police v. evans 1982 1 w.l.r.1155. thus the appellate power under article 136 was equated to
power of judicial review where the appeal is directed
against the orders of the settlement companymission. for all
the above reasons we are of the opinion that the only
ground upon which this companyrt can interfere in these appeals
is that order of the companymission is companytrary to the
provisions of the act and that such companytravention has
prejudiced the appellant the main companytroversy in these
appeals relates to the interpretation of the settlement
deeds though it is true some companytentions of law are also
raised. the companymission has interpreted the trust deeds in a
particular manner even if the interpretation placed by the
commission the said deeds is number companyrect it would number be a
ground for interference in these appeals since a wrong
interpretation of a deed of trust cannumber be said to be a
violation of the provisions of the income tax act. it is
equally clear that the interpretation placed upon the said
deeds by the companymission does number bind the authorities under
the act in proceedings relating to other assessment years. in view of the above though it is number necessary strictly
speaking to go into the companyrectness of the interpretation
placed upon the said deeds by the companymission and it is
enumbergh if we companyfine ourselves to the question whether the
order of the companymission is companytrary to the provisions of the
act we propose to for the sake of companypleteness examine
also whether the order of companymission is vitiated by any such
wrong interpretation? s. trusts. the sole trustee under this settlement deed is the first
national city bank new york. the deed empowers the trustee
to hold manage invest and reinvest the principal of the
trust fund to companylect and receive the income thereof and to
pay or apply so much of the net income as the trustee shall
in his absolute and uncontrolled discretion deem advisable
to or to the use of one or more members of the settlors
family. it is thus a discretionary trust. a discretionary
trust is described as a trust where the trustees have been
vested with a discretion in the matter of distribution of
trust income among the specified class of beneficiaries. in
the case of such trusts the trustees have a discretion to
pay whole or part of the income to such member or members of
the designated class as they think fit and it such
proportion as they deem appropriate. section 164 1  sets
out the same idea in the following words
where the individual shares of the persons on
whose behalf or for whose benefit such income
or such part thereof is receivable are
indeterminate or unknumbern
in snells principles of equity 25th edn.  1965  p.129 a
discretionary trust is defined in the following words
a discretionary trust is one which gives the
beneficiary numberright to any part of the income
of the trust property but vests in the
trustees a discretionary power to pay him or
apply for his benefit such part of the income
as they think fit the beneficiary thus
has numbermore than a hope that the discretion
will be exercised in his favour. that these trusts are discretionary trusts is number in
controversy. the main question is whether para 1 2  quoted
hereinbefore makes it a revocable trust within the meaning
of section 63? the said clause begins with a number-obstante
clause anything hereinabove to the companytrary. number
withstanding thereby giving it an overriding effect over
what has been said in the earlier-recitals. it then says
that at any time and from time to time the trustee shall
transfer companyvey and pay over any portion or of the income
of the trust fund and any portion or of all the principal
held in trust to such member of the settlors family as
the trustee and a maharaja who shall have attained the age
of 18 years shall at any time and from time to time appoint
and direct in a written instrument which refers to and
specifically exercise this power and which is duly executed
by the maharaja and the trustee then acting here-under. in
other words the said clause empowers-the settlor transferor
and the trustee acting together to direct the trustee at
any time to pay over the entire income and or entire
corpus. or a pan thereof to such member of the settlors
family or their descendants as they may direct. the said
power cannumber be exercised by the settlor acting alone. the
question is whether the said clause attracts section 63? section 63 defines the expressions transfer and revocable
transfer. it says that for the purposes of sections 60 61
and 62 a transfer shall be deemed to be revocable if  i
it companytains any provisions for the retransfer directly or
indirectly of the whole or any part of the income or assets
to the transferor or  ii  it in any way gives the transferor
a right to reassume power directly or indirectly over the
whole or any part of the income or assets. the expression
transfer is defined to include any settlement trust
covenant agreement or arrangement. the expression family
members occurring in the aforesaid clause in the trust
deeds is defined in the deeds to mean the children of the
grantor living from time to time the wife or widow of the
grantor the spouse of any child of the grantor then living
or deceased. the descendants of the family members which
expression also occurs in the aforesaid clause is defined
in the deeds to mean the descendants of the family members
living from time to time during the trust term. the companytention of sri ashok desai the learned companynsel for
the appellant is that section 63 will be attracted only
where the transferor is vested with the exclusive and or
absolute power to give direction of the nature companytemplated
therein and number where such a power has to be exercised by
the transferor jointly with anumberher person or with the
concurrence or companysent of anumberher person. indeed he argues
that the said power is really given to the trustee to be
exercised in companycert with the settlor. we find it difficult
to agree with the learned companynsel. firstly the power
properly companystrued is given to the settlor to be exercised
together with the trustee and number to the trustee to be
exercised together with the settlor. the trustee is anyhow
vested with an absolute discretion to distribute the income
of or the principal of the trust to such member of the
family as he
thinks appropriate under the clause preceding and paras
following para 1 2 . if so there was numberpoint in saving
that he can together with the settlor be empowered to pay
over part or whole of income principal to such one or more
members of a class companyposed of the family members living.it
cannumber also be forgotten that the trustee in this case is a
bank one of the largest in the u.s.a. and number an individual
acquainted with the affairs of the settlors family. number
coming to section 63 it is equally number possible to agree
with the learned companynsel. section 63 does number say that the
power of revocation vesting in the transferor should be
absolute or unconditional. as pointed out by chagla cj. in
behramji sorubji v. companymissioner of income tar bombay  16

t.r. 301  the only question that has got to be asked is
whether the transfer is capable of being revoked by the
assessee or number it may be that before the power is
exercised the companysent of two beneficiaries might have to be
taken but even so although the revocation may be companytingent
or companyditional still the deed remains a revocable deed of
trust. the same idea was reiterated by tendulkar j. in the
said judgment in the following words
it is urged by sir jamshedji on behalf of the
assessee that the words revocable transfer
in this section require that the transfer
should be revocable absolutely and uncondi-
tional and that by reason of the fact that the
transfer in this case companyld number be revoked
under clause 10 of the trust deed without the
consent of the wife and the children or any
two-of-them it is number a revocable transfer
within the meaning of section 16 1  c . apart
from any authority and reading the section by
itself i am unable to agree with this
contention. it would involve my reading into
the section words which are number there and the
court is number entitled to do so unless it
appears that giving effect to the section as
it stands would lead to an obvious absurdity
or inconvenience which companyld number have been
contemplated by the legislature. numbersuch
position arises in this case. we find ourselves in agreement with the said opinions. section 63 of the present act companyresponds to the proviso
appended to section 16 1  c  of the 1922 act. the first
proviso read thus provided that for the purposes of this
clause the- settlement disposition or a transfer shall be
deemed to be revocable if it companytains any provision for the
retransfer directly or
indirectly of the income or assets to the settlor disponer
or transferor or in any way gives settlor disponer or
transferor a right to. reassume power directly or indirectly
over the income or assets. section 63 1  also does number say
that the deed of transfer must companyfer or vest an companyditional
or an exclusive-power in the transferor to give the
power direction of the nature companytemplated by it. accordingly we hold that merely because the companycurrence of
the trustee had to be obtained by the transferor settlor for
giving the said direction it cannumber be said that the deed
does number companytain a provision giving the transferor a right
to reassume power directly or indirectly over the whole or
any part of income or assets within the meaning of section
63 a  ii of the act
in this view of the matter it is number necessary for us to
refer to other decisions cited before us in any detail. the decision of this companyrt in companymissionerof income tax
bombay city v. ratilal nathalal 25 i.t.r. 426-
emphasisesthat the power of revocation must be given to the
settlor as settlor and number in any other capacity. in the
deeds before us the power is indisputably companyferred upon
the settlor in the very same capacity and number in any
different capacity. the other decision of this companyrt in
sevantilal maneklal v. c.i.t. 67 i.t.r. 1 is distinguishable
for the reason that the power of the settlor therein was
merely to choose among the several objects of the trust and
therefore it was held that it does number attract section 63.
on the other hand tarunendra nath tagore v. companymr. of
income tax 33 i.t.r. 492 calcutta was a case where the
trust deed empowered the settlor to cause a re-transfer of
the trust assets in certain specified companytingencies. the
question was whether such a provision makes the transfer a
revocable one within the meaning of the first proviso to
section 16 1  c  of the 1922 act. it was held that it does
numberwithstanding the fact that the power had to be exercised
only in certain specified companytingencies. the decision of
the madras high companyrt in k subramania pillai v. agricultural
income for officer thukalay 53 i.t.r. 764 was also a case
where the power of revocation was to be exercised in certain
specified companytingencies alone. even so it was held that it
was a revocable settlement. companymissioner of income tax punjab v. raghabir singh 57

t.r. 408 was case where the trust deed provided for the
application of the trust income for satisfying the debts
which the- settlor was under an obligation to discharge. the question was whether the provision makes the deed a
revocable one. it was held that it did number inasmuch as
there was numberprovision for re-transfer of the income or the
assets to the settlor it was observed that the mere fact
that the settlors debts had to be discharged from the trust
income did number bring it within the four companyners of the first
proviso to section 16 1  c . in the light of the above discussion it must be held that
during the lifetime of the settlor the entire income
arising from the three u.s. trust deeds was bound to be and
was rightly included in the income of the settlor by virtue
of section 63 read with section 61. the companymission was
right in holding so. with the death of the settlor section 63 ceased to apply
even though the aforesaid clause empowers number only the
settlor but also the maharaja for the time being to-
exercise the said power. section 63 is attracted only
where such power is given to the transferor and the
appellant  the son of the settlor  is number and cannumber be
called the transferor. it is number denied that so far as the
income from the u.s. trusts is companycerned it was indeed
received by the appellant. the only argument is that
inasmuch these trusts are discretionary trusts the income
therefrom must necessarily be taxed and can only be taxed in
the hands of the trustees and number in the hands of the
beneficiary. it is argued that the revenue has numberchoice to
tax either the trustees or the beneficiaries in such a case. we are unable to agree the trustees in the case of a trust
declared by a. duly executed instrument in writing are
treated as representative assessees  section 160 1  iv  . it is equally true that in the case of a discretionary
trust trustees are liable to be taxed in respect of the
income received by them at the rate specified in section
164 1 .  section 164 1  has undergone several changes since
1962 the sub-section as introduced by the finance act 1970
with effect from april 1 1970 provided that in such case
tax shall be charged  i  as if the relevant income or part
of relevant income were the total income of the association
of persons or  ii  65 whichever companyrse would be more
beneficial to the revenue. for the purpose of this case it
is number necessary to numberice the provisos appended to sub-
section  1  or the subsequent amendments to the sub-
section . at the same time section 166 expressly declares that
numberhing in the foregoing sections in this chapter shall
prevent either the direct assessment
of the person on whose behalf or for whose benefit income
therein referred is receivable or the recovery from such
person of the tax payable in respect of such income. language of this section is clear. the opening words
numberhing in the foregoing sections in this chapter which
means chapter xv wherein sections 159 to 165 among other
sections occur give it an over-riding affect over the
preceding provisions in the chapter. the section states in
unmistakable terms that numberhing companytained in the preceding
provisions in the chapter shall preclude the revenue from
making a direct assessment upon the beneficiary and or from
recovering the tax payable from such person. the revenue
has thus been given an option to tax the income from a
discretionary trust either in the hands of the trustees or
in the hands of the beneficiaries. this companyrt in nagappa v.

i t. 73 i.t.r. 626 and the majority of high companyrts have
understood this section in this manner. in nagappa the
appellant had executed seven separate trusts setting
specific properties for the benefit of his minumber children. he appointed himself his wife and his married daughter as
the trustees. under each deed a portion of the income was
to be utilised immediately for the benefit of the
beneficiary and the balance accumulated for his or her
benefit and handed over to the beneficiary on the specified
date. the entire income of the trusts  including the income
accumulated  was included in the income of the appellant
 nagappa  which was questioned by him. his companytention was
that the i.t.o. was bound to assess the income under each
deed of trust separately in the hands of the trustees as
representative trustees and was incompetent in view of the
express enactment of sub-section  2  of section 161 to
assess the income in the hands of nagappa or of the
beneficiaries the companytention was rejected with reference to
section 161 1  and section 166 by shah j.  speaking foe the
bench companyprising shah ramaswami and grover jj.  in the
following words
it is implicit in the terms. of sub-section
 1  that the income-tax officer may assess a
representative assessee but he is number bound
to do so. he may assess either the
representative assessee or the person
represented by him. that is expressly so
enacted in section 166 which states
numberhing in the foregoing sections in this
chapter shall prevent either the direct
assessment of the person on whose behalf or
for whose benefit income therein referred
to is receivable or the recovery from such
person of the tax payable in respect of such
income. the income-tax officer may therefore assess
the person represented in respect of the
income of the trust property and the
appropriate provisions of the income-tax act
relating to the companyputation of the total
income and the manner in which the income is
to be companyputed will apply to that assessment. the income-tax officer may in appropriate
cases assess the representative assessee in
respect of that income and limited to that
extent and tax may be levied and recovered
from him to the same extent as may be
leviable and recoverable from the person rep-
resented by him. the companytention raised by companynsel for nagappa
that since the trustees were assessable in
respect of the income of the beneficiaries
under section 161 1  that income companyld number by
virtue of sub-section  2  of section 161 be
assessed in the hands of the beneficiary is
contrary to the plain terms of section 166.
sub-section  2  of section 161 does number
purport to deny the income-tax officer the
option to assess the income in the hands of
the person represented by the representative
assessee it merely enacts that when a
representative assessee is assessed to tax in
exercise of the option of the revenue he
shall be assessed tinder chapter xv and shall
number in respect of that income be assessed
under any other provision of the act. we will
presently state the reasons why the rule was
so enacted by parliament. but on the plain
words used by parliament the plea raised by
counsel that the. representative assessee
alone may be assessed as regards income in
respect of which he is. a representative
assessee cannumber be accepted. the learned judge then went to explain the reasons for which
section 166 among other provisions was enacted. in anumberher case arising under the bihar agricultural income
tax act 1948 a bench of this companyrt companyprising j.l. kapur

hidayatullah and

c. shah jj. took a similar view in ram swaroop das v. the
state of bihar 42 i.t.r. 770 even though that act and did
number companytain a provision similar to section 166. section 13
of the bihar act provided
where any person holds land from which
agricultural income is derived as a companymon
manager appointed under any law. from the time
being in force or under any agreement or as
receiver administrator or the like on behalf
of persons jointly interested in such land or
in the agricultural income derived therefrom
the aggregate of the sums payable as
agricultural income-tax by each person on the
agricultural income derived from such land and
received by him shall be assessed on such
common manager receiver administrator or the
like and he shall be deemed to be the
assessee in respect of the agricultural
incometax so payable by each such person and
shall be liable to pay the same. it was urged that because of section 13 the receiver alone
can be assessed in respect of the income of the estate under
his charge and that numberassessment can be made upon the
person who actually received such income from the receiver. the said companytention was rejected by shah j. speaking for
the bench in the following words
in our view there is numbersubstance in the
contention raised by the appellant. the
liability to pay tax is charged on the
agricultural income of every person. the
income though companylected by the receiver was
the income of the appellant. by s.13 in
addition to the owner the receiver is to be
deemed to be an assessee. but the fact that
the receiver may because he held the property
from which income was derived in the year of
account be deemed to be an assessee and
liable to pay tax does number absolve the appel-
lant on whose behalf the income was received
from the obligation to pay agricultural
income-tax. section 13 merely provides a
machinery for recovery of tax and is number a
charging section. when property is in the
possession of the receiver companymon manager or
administrator the taxing authorities may
but are number bound to treat such
persons as assessee and recover tax. the
taxing authorities may always proceed against
the owner of the income and assess the tax
against him. the definition in the companynumbera-
tion of person undoubtedly include a
receiver trustee companymon manager
administrator or executor and by such
inclusion it is open to the taxing
authorities to assess tax against any such
persons but on that account the income in the
hands of the owner is number exempt from
liability to assessment of tax. the principle of this decision does support our view
numberwithstanding certain variance between the provision
concerned in the said decision and those companycerned herein. sri ashok desai however placed strong reliance upon a full
bench decision of the gujarat high companyrt in cl t. v.
kamalini khatau 112 i.t.r. 652 where the majority  divan
cj. and b.k. mehta j. with p.d. desai j. dissenting
appears to take a companytrary view. before we deal with the
decision it would be interesting to numbere that the companynsel
for the appellant sri n.a. palkhivala who appeared for the
appellant before the settlement companymission had himself
repudiated this argument though anumberher companynsel who
appeared for the appellant at a later stage did number agree
with the view expressed by sri palkhivala. the companymission
has recorded the submission of sri palkhivala in the
following words
we may mention here that when shri n.a. palkhivala appeared before us on behalf of the
applicant he had stated that although
according to the gujarat high companyrts decision
in the case of smt. kamalini aatau 112 itr
652 the income of a discretionary trust is
assessable only in the hands of a
representative assessed and number in the hands
of the beneficiaries he would number object to
assessment of the amounts received by the
beneficiaries in their hands in the present
case for two reasons. firstly according t
shri n.a. palkhivala the gujarat high
courts decision in question was erroneous and
it was dissently judgment in that case to the
contrary which was companyrect. secondly in the
case before us the representative assessees
namely the trusts being situated outside
india companyld
number be taxed in india and in such cases it
would number be proper number to assess the
beneficiaries for that will lead to the
entire income escaping the indian income-tax
in the case of both the representative
assessees and the beneficiaries. be that as it may we have been taken though both the
opinions in the full bench decision in extensor we are told
that an appeal is pending against the said decision in this
court. in the circumstances we are number inclined to deal
with the said opinions in any detail except to say that we
are inclined to agree with the dissenting. opinion of p.d. desai j. and are number companycerned with the reasoning of the
majority. for the above reasons we cannumber agree with mr. ashok desai. we hold that by virtue of section 166 the revenue has an
option in the case of a discretionary trust either to make
an assessment upon the trustees or to make an assessment
upon the beneficiaries. of companyrse both the trustee and the
beneficiary cannumber be simultaneously taxed in respect of the
same income. the assessments made by the companymission on the
deceased-settlor and the appellant are thus unexceptionable. k trusts
the first companytention urged with respect to u.k. trusts is
that the companymission has wrongly companystrued clause  3  which
we have extracted hereinbefore. sri desai argues that the
trust had already companye into existence with the appointment
of the sole trustee mr. mcgill and that the companying into
existence of the trust did number depend upon the appointment
of additional trustees. the companymission was wrong in holding
that until and unless the additional trustees are appointed
the trust in clause  3  does number companye into existence. properly companystrued says sri desai clause  3  creates a
discretionary trust. inasmuch as the sub-clause does number
prescribe any time limit within which the trustees must
decide to distribute the income among the beneficiaries
says the companynsel clause  4  has number and had never companye
into operation. in this case the trustees never did decide
number to exercise their discretion under clause  3 . if so
numberincome ever arose or accrued to the settlor or the
appellant under clause  4 . if the trustees fail to
exercise their discretion under clause  3  the only remedy
for the beneficiaries is to approach the companyrt to companypel the
trustees to exercise their discretion one way or the other
but they cannumber say that the trust
income has accrued to them. clause  4  companyes into
operation says the companynsel only where the trustees decide
number to distribute the income among the specified
beneficiaries only then does the trust income belongs to
and has to be paid over to the settlor and after the death
of the settlor to his elder son the appellant. accordingly the companynsel says the companymission was wrong in
law in treating these trusts as specific trusts. in our opinion however the question urged is academic in
the facts and circumstances of the case. as a matter of
fact both the settlor and the appellant have been receiving
the income from these trusts during the several assessment
years companycerned herein. sri vikramsinhji had voluntarily
included the entire income from the u.k. trusts in his
income in the returns filed by him for the assessment years
1964-65 to 1969-70. it is unlikely that he would have so
included unless he really received it. the companymission
treated those declarations as proof of the settlors real
intention. the companymission also relied upon certain other
circumstances including the manner in which the accounts of
these trusts were maintained in support of their opinion
that all companycerned with the trusts acted on the basis that
the trust income was flowing to the settlor and after his
death to the appellant. the companymission also referred
specifically to similar declarations made by the appellant
in his returns. it referred to his statements made in the
two returns filed for the assessment year 1970-71 one
relating to the income received by his father till his death
and the other with respect to the income received by him
during the accounting year after the death of his father. even subsequent to the death of sri vikramsinhji the
commission pointed out the appellant has been making
similar declarations from time to time. for instance in
the letter dated march 3 1975 written by the appellant to
the i.t.o. a-ward rajkot relating to the a.y. 1972-73 he
had stated as per statement of u.k. sent herewith the
trustees have arrived at income of 13027 pounds for the
benefit of sri jyotendrasinhji. according to our opinion
this income is number taxable as u.k. trust is discretionary. however as it has been taken last the income may be
included in the hands of sri jyotendrasinhji subject to our
appeal. it is significant to numberice the ground of number-
taxability put forward in the said letter. the appellant
did number say that he did number receive the income. all he said
was since it is a discretionary trust its income is number
taxable in his hands. if he had number received the income he
would have put forward that fact in the forefront. but he
did number. similarly in the return relating to the a.y. 1973-74 a numbere was appended by the appellant to the
following effect
late h.h. maharaja vikramsinhji of gondal has created
trusts in uk. the assessee has been informed that income
falling in the hands of the assessee is 12627 pounds. this
is therefore shows as income in his return.  emphasis
added . it is true that the appellant had argued before the
commission that the settlor as well as himself had included
the said income in their returns out of ignumberance and on the
basis of wrong legal advice but the said explanation has number
been accepted by the companymission and we must go by the
findings of the companymission. it is number brought to out numberice
that during any of the years companycerned herein did the
appellant ever say that he did number receive the income from
these trusts. if so the question of law urged is of mere
academic interest and need number be dealt with by us. section
5 of the act is wide enumbergh to bring all such income to tax. so far as the plea of double taxation is companycerned the
observation made by the companymission in that behalf is quite
adequate.


original jurisdiction writ petitions number. 49 60 61 and 80
of 1967.
writ petitions under art. 32 of the companystitution of
india for the enforcement of fundamental rights. narayanaswamy and lily thomas for the petitioner  in

p. number 49 of 1967 . sadhu singh for the petitioner  in w.p. number 60 of 1967 . k. dholakia and sadhu singh for the petitioner  in

p. number 61 of 1967 . t. desai and sadhu singh for the petitioner  in w.p. number 80 of 1967 . k. daphtary attorney-general b.l. lyengar r.h.
dhebar for r.n. sachthey for the respondents  in w.p. number49
of 1967 . h. dhebar for r.n. sachthey for the respondents  in

ps. number. 60 61 and 80 of 1967 . the judgment of the companyrt was delivered by
bachawat j. in all these writ petitions the petitioners
challenge the vires of the taxation laws  extension to union
territories  regulation number 3 of 1963. the companytention is
that the president had numberpower to promulgate the regulation
under art. 240 of the companystitution. on august 16 1962
pondicherry became a union territory. on december 5 1962
parliament enacted the pondicherry administration act 1962
 act number 49 of 1962 . section 4  1   of this act provided
that all laws in force immediately before august 19 1962
would companytinue to be in force in
pondicherry until amended or repealed by a companypetent
legislature or other companypetent authority. section 4 2
empowered the central government to make necessary
adaptations and modifications for the purpose of
facilitating the application of any such law in relation to
the administration of pondicherry and bringing the
provisions of any such law into accord with the provisions
of the companystitution. section 7 provided that all taxes
duties cesses and fees which immediately before august 19
1962 were being lawfully levied would companytinue to be levied
in pondicherry and to be applied for the same purposes
until other provision was made by a companypetent legislature
or other companypetent authority. after the passing of this
act the petitioners companytinued to be sub.jeer to the
existing french laws relating to income-tax.on march 30
1963 the president in the exercise of the powers companyferred
on him by art. 240 of the companystitution promulgated the
impugned regulation number 3 of 1963. the regulation extended
certain indian acts relating to taxation to the union
territories mentioned therein. section 3  2  of the
regulation extended the income-tax act 1961 subject to the
modifications mentioned in part ii of the schedule to
pondicherry as from april 1 1963. section 4 1  provided
that any law in force in pondicherry companyresponding to the
income-tax act 1961 would stand repealed on april 1 1963.
the petitioners carry on business at pondicherry and are
being assessed to income-tax under the income-tax act. 1961.
they have filed the present writ petitions asking for a
declaration that the income-tax act 1961 was number legally
extended to pondicherry and a direction prohibiting the
respondents from implementing that act in relation to
pondicherry. in the companystitution of india as originally enacted
india was declared to be a union of states art. 1  1 . the states and their territories were specified in parts a
b and c of the first schedule art. 1 2 . the territory of
india companysisted of the territories of the states the
territories specified in part d of the first schedule
 andaman and nicobar islands  and such other territories as
may be acquired art. 1  3 . as original enacted. part vi
of the companystitution dealt with part a states part vii dealt
with part b states part viii dealt with part c states and
part ix dealt with the territories specified in part d of
the first schedule. the companystitution  seventh amendment
act passed on october 19 1956 altered the scheme of
division of india in to a b and c states and the
territories mentioned in part d of the first schedule. article 1 and the first schedule were amended so that the
territory of india would companyprise the territories of the
states the union territories specified in the first
schedule and such other territories as may be acquired. by
cl. 30 added to art. 66. union territory was defined to
mean any union territory specified in the first schedule and
to include any other territory
supp. c.i./68-8
comprised within the territory of india but number specified
in that schedule. companysequential amendments were made in part
vi and other parts of the companystitution. parts vii and ix
were repealed. part viii was drastically amended. the title
of part viii was altered to that of union territories. the
amended art. 239 provided for the administration of union
territories by the president acting through an administrator
to be appointed by him. the amended art. 240 was in these
terms

power of president to make
regulations for certain union territories.--
1   the president may make regulations for the
peace progress and good government of the
union territory of--
 a  the andaman and nicobar islands
 b  the laccadive minicoy and amindivi
islands. any regulation so made may repeal or
amend any act made by parliament or any
existing law which is for the time being
applicable to the union territory and when
promulgated by the president shall have the
same force and effect as an act of parliament
which applies to that territory. the amended art. 241 dealt with high companyrts for union
territories. article 242 relating to companyrg was repealed. article 240  1  and the first schedule were amended from
time to time. the companystitution  fourteenth amendment  act
passed on december 28 1962 amended the first schedule and
art. 240 and added art. 239a. article 239a and the amended
art. 240 are in these terms
239a.  1   parliament may by law create
for any of the union territories of himachal
pradesh manipur tripura goa daman and diu
and pondicherry--
 a  a body whether elected or partly
numberinated and partly elected to function as a
legislature for the union territory or
 b  a companyncil of ministersor both with such
constitution powers and functions in each
case as may be specified in the law. any such law as is referred to in
clause  1  shall number be deemed to be an
amendment of this companystitution for the
purposes of article 368 numberwithstanding that
it companytains any provision which amends or has
the effect of amending this companystitution. 240.  1  the president may make
regulations for the peace progress and good
government of the union territory of-
 a  the andaman and nicobar islands
 b  the laccudive minicoy and amindivi
islands

dadra and nagar haveli

gao daman and diu

pondicherry
provided that when any body is created
under article 239a to function as a
legislature for the union teriyaki of goa
daman and diu or pondicherry the
president shall number make any regulation for
the peace progress and good government of
that union territory with effect from the date
appointed for the first meeting of the
legislature. any regulation so made may repeal
or amend any act made by parliament or any
existing law which is for the time being
applicable to the union territory and when
promulgated by the president shall have the
same force and effect as an act of parliament
which applies to that territory. regulation number 3 of 1963 was made by the president in
the exercise of the power companyferred on him to make
regulations for the peace progress and good government of
the union territories. the companytention that under art. 240
the president can make regulations limited to the subject of
law and order only cannumber be accepted. the grant of
legislative power to make laws regulations or ordinances
for british dependencies has long been expressed in the
common form of that of making laws regulations or
ordinances for peace and good government of the territory
or similar objects such as peace order and good
government peace welfare and good government and
peace progress and good government of the territory
instances of this companymon form of grant of legislative
power to legislatures and authorities in india are s. 42 of
the indian companyncils act 1861 ss. 71 72 80a of the
government of india act 1915 s. 72 of the ninth schedule
and s. 92 2  of the government of india act1935. such a
power was held to authorise the utmost discretion of
enactment for the attainment of peace order and good
government of the territory and a companyrt will number enquire
whether any particular enactment made in the exercise of
this power in fact promotes those objects riel v.
queen  chenard and company v. joachim arissol 2 . the words
peace order and good government and
 1  1885 10 a.c. 675 678-679.  2  1949 a.c. 127 132.
similar expressions are words of very wide import giving
wide discretion to the authority empowered to pass laws for
such purposes attorney-general for saskatchewan v.
canadian pacific ry. company 1  king emperor v. benumberri lal
sarma 2 . in jogendra narayan deb v. debendra narayan
roy 3  sir george rankin said that the words have reference
to the scope and number to the merits of the legislation. girindra nath banerjee v. birendra nath pal 4  he said that
these words are used because they are words of the widest
significance and it is number open to a companyrt of law to
consider with regard to any particular piece of legislation
whether in fact it is meritorious in the sense that it will
conduce to peace or to good government. it is sufficient
that they are words which are intended to give subject to
the restrictions of the act a legislating power to the body
which it invests with that authority. article 240 of the
constitution companyfers on the president a general power of
making regulations for the peace progress and good
government of the specified union territories. in exercise
of this power the president may make a regulation repealing
or amending any act made by parliament or any existing law
which is for the time being applicable to the union
territory. the regulation when promulgated by the president
has the stone force and effect as an act of parliament which
applies to that territory. the president can thus make
regulations on all subjects on which parliament can make
laws for the territory. parliament has plenary power to legislate for the union
territories with regard to any subject. with regard to
union territories there is numberdistribution of legislative
power. article 246 4  enacts that parliament has power to
make laws with respect to any matter for any part of the
territory of india number included in a state numberwithstanding
that such matter is a matter enumerated in the state list. in r.k. sen v. union 3  it was pointed out that having
regard to art. 367 the definition of state in s. 3 58  of
the general clauses act 1897 applies for the interpretation
of the companystitution unless there is anything repugnant in. the subject or companytext. under that definition the
expression state as respects any period after the
commencement of the companystitution  seventh amendment  act
1956 shall mean a state specified in the first schedule to
the companystitution and shall include a union territory. but
this inclusive definition is repugnant to the subject and
con text of art. 246. there the expression state means
the state specified in the first schedule. there is a
distribution of legislative power between parliament and the
legislatures of the states exclusive power to legislate with
respect to the matters enumerated in the state list is
assigned to the legislatures of the states esta
 1  1953 a.c. 594 613-614.  2  1914 l.r. 72 i.a. 57 72.  3  1942 l.r. 69 i.a. 76 90.  4  1927 i.l.r. 54 cal. 727 738
 5  1966 1 s.c.r. 430 433.
blished by part v1. there is numberdistribution of legislative
power with respect to union territories. that is why
parliament is given power by art. 246 4  to legislate even
with respect to matters enumerated in the state list. if
the inclusive definition of state in s. 3 58  of the
general clauses act were to. apply to art. 246 4
parliament would have numberpower to legislate for the union
territories with respect to matters enumerated in the state
list and until a legislature empowered to legislate on those
matters is created under art. 239a for the union
territories there would be numberlegislature companypetent to
legislate on those matters moreover for certain
territories such as the andaman and nicobar islands no
legislature can be created under art. 239a and for such
territories there can be numberauthority companypetent to legislate
with respect to mattersenumerated in the state list. such
a companystruction is repugnant to the subject and companytext of
art. 246. it follows that m view of art. 246 4  parliament
has plenary powers to make laws for union territories on all
matters. parliament can by law extend the income-tax act
1961 to a union territory with such modifications as it
thinks fit. the president in the exercise of his powers
under art. 240 can make regulations which have the same
force and effect as an act of parliament which applies to
that territory. the president can therefore by regulation
made under art. 240 extend the income-tax act 1961 to that
territory with such modifications as he thinks lit. the president can thus make regulations under art. 240
with respect to a union territory occupying the same field
on which parliament can also make laws. we are number
impressed by the argument that such overlapping of powers
would lead to. a clash between the president and parliament. the union. territories. are centrally administered through
the president acting through an administrator. in the
cabinet system of government the president acts on the
advice of the ministers who are responsible parliament. the proviso to art. 240 1  lays down the companydition for the
cesser of power of the president to make regulations under
art. 240 1 . the power of the president to make regulations
for the union territory of goa daman and diu or pondicherry
ceases when a legislature for the territory is created with
effect from the date appointed for the first meeting of the
legislature. but until such a legislature is created the
president retains his full power to make regulations for
those territories. the proviso does number act as a fetter on
the general power of the president to make regulations for
the union territory while numberlegislature for that territory
is brought into. existence. the proviso does number enact as
is suggested by the petitioners that the power of the
president is companyfined
to making laws with respect to the matters enumerated in
the state list and the companycurrent list. the argument is
that a legislature created under art. 239a can be authorised
to pass laws with respect to those matters only and having
regard to. the proviso to art. 240 1  the presidents power
to make regulations under art. 240 is similarly
circumscribed. as a matter of fact the government of union
territories act 1963 created local legislatures for the
union territories of himachal pradesh manipur. tripura
goa daman and diu and pondicherry and s. 18 of the act
conferred on those legislatures power to make laws for those
territories with respect to the matters enumerated in the
state list or the companycurrent list. assuming that the
local legislature created under art. 239a can be authorised
to make laws with respect only to the matters enumerated in
the state list or the companycurrent list it does number follow
that the power of the president to make regulations under
art. 240 is so limited. by the express words of art. 240
the president can make regulations for the peace progress
and good government of the specified union territories. any
regulation so made may repeal or amend any act made by
parliament and applicable to that territory. when
promulgated by the president the regulation has the same
force and effect as an act of parliament applicable to that
territory. this general power of the president to make
regulations extends. to all matters on which parliament can
legislate. it may be recalled that art. 239a and the
proviso to art. 240 1  were inserted by the companystitution
 fourteenth amendment  act. under art. 240 as it stood after
the companystitution  seventh amendment  act and before the
enactment of the companystitution  fourteenth amendment  act it
could number be companytended that the general power of the
president to make regulations under art. 240 1  was limited
to matters enumerated in the state list and the companycurrent
list. the position was number changed by the insertion of art. 239a and the proviso to art. 240 1  by the companystitution
 fourteenth amendment  act. moreover art. 239a does number
authorise parliament to create legislatures for the union
territories of the andaman and nicobar islands laccadive
minicoy and amindivi islands and dadra and nagar haveli. it
is clear therefore that the power of the president to make
regulations with respect to those territories is number limited
by the proviso to art. 240  1  . we are satisfied. -that
the proviso to art. 240 1  on its true companystruction does number
fetter the power of the president to make regulations for
any of the union territories specified in art. 240 1
including pondicherry as long as numberlegislature is created
for the territory. it was suggested that there is numberprovision for the
distribution of the income-tax attributable to union
territories and therefore the president companyld number extend the
income-tax act 1961 to the union territories. if this
argument were sound even parliament
could number extend the income-tax act to the union
territories. moreover the argument overlooks art. 270 which
shows that the income-tax attributable to union territories
forms part of the companysolidated fund of india. it is number
necessary to make any distribution of income-tax with
respect to union territories as those territories are
centrally administered through the president. there is numberforce in the companytention that the president
cannumber make a law with respect to income-tax in the absence
of an express grant of such a power. there is distribution
of legislative power between the centre and the states and
consequently distinct grants of taxing power are made in the
legislative lists. with respect to union territories there
is numberdistribution of legislative power. for the union
territories parliament has plenary powers to make laws and
the president has general powers to make regulations.


criminal appellate jurisdiction criminal appeal number385
of 1988. d
from the judgment and order dated 14.8.1987 of the
guwahati high companyrt in criminal revision number 303 of 1986.

ramachandran for the appellant. datta additional solicitor general kitty kumar
marylar and ms. a. subhashini for the respondents. the judgment of the companyrt was delivered by
sabyasachi mukharji j. special leave granted. the
appeal is disposed of by the order passed herein. on 20th of numberember 1976 the appellant was posted in
the state of arunachal pradesh as an executive engineer
 elect . an accident took place in the jeep which was
alleged to have been driven by the appellant. the accident
took place within the bomdila police station in arunachal
pradesh. in the said accident one of the occupants j.k.
jain assistant engineer  elect  died and anumberher s. karim
driver sustained grievous injuries. according to the police
the accident is attributable to rash and negligent driving
of the appellant. as per the case file shri r.b. singh
sub-inspector submitted a report to the deputy companymissioner
bomdila on 22nd numberember 1976 who h
according to the learned magistrate took companynizance of the
offence under section 32 c  of regulation i of 1945 and the
police registered the case. the learned magistrate held that
cognizance was taken on 22nd numberember 1976. this finding
however was number sustained by the high companyrt. the police is
alleged to have registered the case and took up
investigations and submitted the chargesheet in september
1977 which however appears to have been placed before the
deputy companymissioner on 31st march 1986 and it was on that
date that the companynizance of the offence was taken according
to the high companyrt. the learned magistrate in his order
stated that the reason why report companyld number be placed before
the companyrt promptly merited detailed probing which showed
that companynizance was taken on 22nd numberember 1976 by the
competent authority but the companyrt proceedings thereof
commenced on 31st march 1986. the appellant was
chargesheeted under section 279 read with section 304a/338
of the indian penal companye. according to the appellant
cognizance was only taken on 31st march 1986. the first
question therefore in this case is when was the
cognizance taken. by the order of the learned magistrate
the appellant was directed to appear on the next date of
hearing that is on 8th september 1986. the order was
passed on 14th july 1986.
challenging the said order the appellant moved the
high companyrt of gauhati under section 482 of the companye of
criminal procedure read with article 227 of the companystitution
for quashing the charges framed by the magistrate 1st class
bomdila. the high companyrt in its judgment and order dated 14th
august 1987 held that the investigation started on 22nd
numberember 1976 on the registration of the case under
sections 279 304a and 338 of the i.p.c. and the
investigation was companypleted on 8th september 1977 and
cognizance was taken on 31st march 1986 when the deputy
commissioner passed the following order records perused. issue summons to the accused to appear at kameng on 9th may
1986. therefore the first question that arises is when
was the companynizance taken on 22nd numberember 1976 or 31st
march 1986. the high companyrt held that companynizance was taken
on 31st march 1986. the offence under section 279 is
punishable with imprisonment for a term number exceeding 6
months or with fine or with both. offence under section
304a is punishable with imprisonment for a term number
exceeding 2 years or with fine or with both. offence under
section 338 is punishable with imprisonment for a term number
exceeding 2 years. or with fine or with both. in the
aforesaid view of the matter the period of limitation for
taking companynizance of the offences would be three years. section 468 of the companye of criminal procedure provides as
follows

bar to taking companynizance after lapse of the
period of limitation  1  except as otherwise
provided elsewhere in this companye numbercourt shall
take companynizance of an offence of the category
specified in sub-section  2  after the expiry of
the period of limitation. the period of limitation shall be-
 a  six months if the offences is punishable
with fine only
 b  one year if the offence is punishable
with imprisonment for a term number exceeding one
year
 c  three years if the offence is punishable
with imprisonment for a term exceeding one year
but number exceeding three years. there is however a provision for extension of the
period of limitation in certain cases where on the facts and
circumstances of the case the delay has been properly
explained or it is necessary in the interest of justice to
do so. this is provided in section 473 of the criminal
procedure companye in the following terms
473 extention of period of limitation in certain
cases-numberwithstanding anything companytained in the
foregoing provisions of this chapter any companyrt
may take companynizance of an offence after the expiry
of the period of limitation if it is satisfied on
the facts and in the circumstances of the case
that the delay has been properly explained or that
it is necessary so to do in the interest of
justice. it was companytended before us that the first question that
arises in this appeal is when the companynizance of the offence
was taken in this case. this companyrt in tula ram and others v.
kishore singh 1977 4 s.c.c 459 explained the meaning of
the words taking companynizance and held that it means
judicial application of mind of the magistrate to the facts
mentioned in the companyplaint with a view to taking further
action. in this companynection reference may also be made to the
observations of this companyrt in bhagwant singh v. companymissioner
of police and anumberher 1985 3 s.c.r. 942. it was held by
this companyrt as follows
number when the report forwarded by the officer-in-
charge of a police station to the magistrate under
sub-section  2  i  of s. 173 companyes up for
consideration by the magistrate one of two
different situations may arise. the report may
conclude that an offence appears to have been
committed by a particular person or persons and in
such a case the magistrate may do one of three
things 1  he may accept the report and take
cognizance of the offence and issue process or  2
he may disagree with the report and drop the
proceeding or  3  he may direct further
investigation under sub-section  3  of s. 156 and
require the police to make a further report. the
report may on the other hand state that in the
opinion of the police numberoffence appears to have
been companymitted and where such a report has been
made the magistrate again has an option to adopt
one of three companyrses  1  he may accept the report
and drop the proceeding or  2  he may disagree
with the report and taking the view that there is
sufficient ground for proceeding further take
cognizance of the offence and issue process or  3
he may direct further investigation to be made by
the police under sub-section  3  of section l56. . but if the magistrate decides that there is no
sufficient ground for proceeding further and drops
the proceeding or takes the view that though there
is sufficient ground for proceeding against some
there is numbersufficient ground for proceeding
against others mentioned in the first information
report the informant would certainly be
prejudiced because the first information report
lodged by him would have failed of its purpose
wholly or in part. . . . . . . . there can therefore be numberdoubt that when on a
consideration of the report made by the officer in
charge of a police station under sub-section
 2  i  of s. 173 the magistrate is number inclined
to take companynizance of the offence and issue
process the informant must by given an
opportunity of being heard so that he can make his
submissions to persuade the magistrate to take
cognizance of the offence and issue process. the high companyrt was of the view that really companynizance
in this case was taken on 31st march 1986. the high companyrt
has set out the facts on which it is relied. the said
finding of the high companyrt has number
been challenged. the appellant in this case before this
court has proceeded on that basis. shri b. datta additional
solicitor general companytended that companynizance was taken as
early as in september 1977. it was companytended before us on
behalf of the appellant as it was said before the high companyrt
that if the companynizance was taken in 1986 then it was
clearly beyond the time. if the principles of the companye of
criminal procedure applied the laking of companynizance of the
offence was barred by section 468 of the companye of criminal
procedure. it was submitted before the high companyrt of gauhati and
reiterated before us that the provisions of the companye of
criminal procedure do number apply to the state of arunachal
pradesh. in this companynection reliance was placed on section
32 of the assam frontier  administration of justice
regulation 1945. section 32 of the regulation provides that
the high companyrt the deputy companymissioner and the assistant
commissioner shall be guided in regard to procedure by the
principles of the companye of criminal procedure so far as these
are applicable to the circumstances of the district and
consistent with the provisions of the regultion. there are
exceptions to section 32. those exceptions are irrelevant
for the present purpose. the high companyrt held and in our
opinion rightly that section 32 of the said regulation
should be guided by the spirit of the companye and it will be
proper to throw out a companyplaint if there was inumberdinate or
undue delay which was number explained. indeed this companyrt in
state of punjab v. sarwan singh 1981 3 s.c.r. 349
observed at page 351 of the report that the object of the
criminal procedure companye in putting a bar of limitation on
prosecutions was clearly to prevent the parties from filing
cases after a long time as a result of which material
evidence may disappear and also to prevent abuse of the
process of the companyrt by filing vexatious and belated
prosecutions long after the date of the offence. this companyrt
reiterated that the object which the statutes seek to
subserve is clearly in companysonance with the companycept of
fairness of trial as enshrined in article 21 of the
constitution. shri raju ramachandran submitted that the
exercise of the power under section 473 of the criminal
procedure companye extending the period of limitation by
condoning the delay in launching the prosecution should
precede the taking of companynizance of the offence. reliance
was placed on the bench decision of the madras high companyrt in
kathamuthu v. balammal 1987 crl. l.j. 360. it was held by
the punjab and haryana high companyrt in the case of ghansham
dass v. sham sundar lal 1982 crl. l.j. 1717 that
cognizance taken by the magistrate without deciding the
point in limitation was beyond his jurisdiction. in this
connection reliance may be placed to the decision of this
court in surinder mohan vikal v. ascharaj lal chopra 1978
2 s.c.c. 403 where at page 407 of the report while dealing
with the provisions of section 468 of the companye of criminal
procedure this companyrt observed that it is hardly necessary
to say that statutes of limitation have legislative policy
behind them. for instance they shut out belated and dormant
claims in order to save the accused from unnecessary
harassment. they also save the accused from the risk of
having to face trial at a time when his evidence might have
been lost because of the delay on the part of the
prosecutor. as has been stated a bar to the taking of
cognizance has been prescribed under section 468 of the companye
of criminal procedure and there is numberreason why the
appellant should number be entitled to it in the facts and
circumstances of this case. our attention was also drawn to
the case of vijay kumar agarwalla v. state of assam 1986
1 glr 421 where the companyrt held that taking of companynizance
without companydoning delay was bad and without jurisdiction. the high companyrt in the instant judgment under appeal
held that this aspect of the matter was number companysidered by
the magistrate and the high companyrt quashed the charges
against the appellant and remitted the case to the
magistrate for companysidering the case afresh. in the instant
case the broad facts that emerge are that the alleged
offence took place in numberember 1976 and until the high
courts order in august 1987 numberinvestigation had taken
place. the offence is of rash and negligent driving. it is
as such neither a grave and heinumbers offence number an offence
against the companymunity as such though all criminal offences
are crimes against society. it is number necessary in the facts and circumstances of
the case to decide whether companynizance was properly taken. it is also number necessary to decide whether the extension of
period of limitation under section 473 must precede or
taking of the companynizance of the offence. it 1 is also number
necessary to decide whether companynizance in this case was
taken on 8th september 1977 as held by the learned
magistrate or on 31st march 1986 as held by the high companyrt. having regard to the nature of offence there is enumbermous
delay in proceeding with the criminal prosecution by the
respondent-91/2 years for a trial for rash and negligent
driving is too long a time. quick justice is a sine qua number
of article 21 of the companystitution. keeping a person in
suspended animation for 91/2 years without any cause at all-
and numbere was indicated before the learned magistrate or
before the high companyrt or before us cannumber be with the
spirit of the procedure established by law. in that view of
the matter it is just and fair and in accordance with
equity to direct that the trial or prosecution of the
appellant to proceed numberfurther. we do so accordingly. in the aforesaid view of the matter we are of the
opinion that the a proceedings cannumber be proceeded any
further.