MEHROTRA, J. : This is an application under Article 226 of the Constitution of India praying for - (a) a writ of mandamus calling upon the respondents to with­draw, cancel or forbear from giving effect to the notices issued against the applicant under Sec. 46 (5A) of the Income-tax Act; (b) a writ of certiorari calling upon the respondents to send for the records of the case and the proceedings be thereafter quash­ed; (c) a writ of prohibition calling upon the res­pondents to cancel or to forbear from giving effect to or in any way taking any steps in respect of the notices issued under Sec. 46 (5A) of the Income-tax Act. (2) The petitioner carries on business and is regularly assessed to income-tax under the Income-tax Act. hereinafter called the Act. Under Sec­tion 5(4) of the Taxation on Income (Investigation Commission) Act, 1947, the case of the petitioner was referred to the Income-tax Investigation Com­mission. An application was then made under Sec. 8A of the said Income-tax Investigation Com­mission Act, and the case of the petitioner was settled. The total quantum of income-tax alleged to have escaped assessment was estimated by the Commission at Rs. 19,81,302/- and the amount which was found payable under the terms of the settlement was determined at Rs. 14,77,1644/-. According to the petitioner this sum of Rs. 19,81,302/- included a sum of Rs. 13,69,561/- as the income of Jalan Industries Limited (Salvage Department) assessable for the assessment years 1947-48 to 1951-52. Out of the amount'settled by the end of 31st January, 1956 a sum of Rs. 1,67,000/- was paid. The case of the Hindu Un­divided Family Narsingdas Surajmal of which the petitioner was the 'Karta' was also referred to the income-tax Investigation Commission under Sec­tion 5(1) of the Taxation on Income (Investigation Commission) Act, 1947 which was also settled under Sec. 8A and a sum of Rs. 6,46,777/- was determined under the said settlement by the said Hindu undivided family. Out of this demand of Rs. 6,46,777/- a sum of Rs. 2,89,777/- was paid till the 31st January, 1956. By a decision of the Supreme Court sub-Sec. 4 of Sec. 5 of the Taxation on Income (Investi­gation Commission) Act of 1947 was held to be ultra vires, void and unenforceable as offending against the provisions of Art. 14 of the Constitu­tion. 6,46,777/- a sum of Rs. 2,89,777/- was paid till the 31st January, 1956. By a decision of the Supreme Court sub-Sec. 4 of Sec. 5 of the Taxation on Income (Investi­gation Commission) Act of 1947 was held to be ultra vires, void and unenforceable as offending against the provisions of Art. 14 of the Constitu­tion. The effect of this decision was that the settlement arrived at between the petitioner and the department under Section 8A of the Act be­came void. After the decision of the Supreme Court Ordi­nance No. VIII of 1954 was promulgated by which two sub-sections (1A) and (IB) were added to Sec­tion 34 of the Indian Income-tax Act 1922 with effect from 17th July, 1954. By Sec. 2 of the Income-tax (Amendment) Act 1954 these two sub­sections were reproduced and two other sub-sec­tions numbered as (1C) and (ID) were added with effect from 17th July, 1954. These provisions will be referred to later. (3) The Income-tax Officer, Dibrugarh issued three notices under Sec. 34 (1A) of the Income-tax Act for the assessment years 1944-45, 1945-46 and 1946-47 against the applicant and proceeded to assess income, profits or gains of the petitioner for each of the aforesaid three years. Under Sec­tion 34(1B) of the Act the petitioner applied to the Central Board of Revenue for settlement of the dispute relating to the assessment for the afore­said years. The Central Board of Revenue by its letter dated 31st January, 1956 issued by Sri V. Gauri Shankar, Under Secretary, Central Board of Revenue informed the petitioner that the Board had order­ed that the total amount of income of the peti­tioner for the assessment years 1944-45 to 1946-47 assessable to tax under Sec. 34 (1A) of the Income-tax Act was Rs. 9,50,376/- and the petitioner had to pay Rs. 8,,99,206/-. Out of which a sum of Rs. 1,67,000/- which had already been paid by the 31st January, 1956 under the settlement arriv­ed at under Sec. 8A of the Taxation on Income (Investigation Commission) Act, 1947 was deduct­ed and the net balance which the petitioner had to pay was a sum of Rs. 7,32,206/-. The petitioner paid another sum of Rs. 5,78,438/- between 22nd March, 1958 and 14lh March, 1957. This payment was made for the liability of Jalan Industries Limited (Salvage Department). The amount of Rs. 8,99,206/- after deducting a sum of Rs. 7,32,206/-. The petitioner paid another sum of Rs. 5,78,438/- between 22nd March, 1958 and 14lh March, 1957. This payment was made for the liability of Jalan Industries Limited (Salvage Department). The amount of Rs. 8,99,206/- after deducting a sum of Rs. 1,67,000/- already realised under the earlier settlement was to be paid in instalments. The first instalment of Rs. 1,00,206/,-had to be paid on or before 30th September, 1956, the second instalment of Rs. 1,00,000/- had to be paid on or before 31st December, 1956, the third instalment of Rs. 1,00,000/- had to be paid on or before 30th September, 1957, the fourth instal­ment had to be paid on or before 31st December, 1957 and the fifth instalment had to be paid on or before 25th March, 1958. One of the clauses of the terms of settlement is that in default of payment of any of the instal­ments on the due date as specified in column 4 of the settlement, the entire sum then remaining due was to become payable forthwith with interest thereon at the rate of 6 per cent from the date of default till realisation. By a notice dated the 10th February, 1956, the Income-tax Officer, Cen­tral Circle, Calcutta made a demand of the sum of Rs. 7,32,206/- found due under the settle­ment. This demand notice also specified the instal­ments and the dates when each instalment was payable. The first two instalments were paid in time by the petitioner. On 30th September, 1957 the petitioner sent two cheques of Rs. 50,000/-which covered the third instalment of Rs. 1,00,000/-which became payable on the 30th of September, ;1957, but a request was made that these cheques should be presented after a fortnight to enable the petitioner to arrange for the 'money as at that time Bank strike was going on. These two cheques were presented to the Reserve Bank of India on the 30th October, 1957 and the amount was realised. The amount of the next instalment which fell due on the 31st December, 1957 could not be paid in time. On the 16th December, 1957 the petitioner wrote a letter to the Directors of Inspection (Special Investigation), Central Board of Revenue, New Delhi praying for extension of time for payment of the instalments which fell due on the 31st December, 1957 and 25th March, 1958. On the 16th December, 1957 the petitioner wrote a letter to the Directors of Inspection (Special Investigation), Central Board of Revenue, New Delhi praying for extension of time for payment of the instalments which fell due on the 31st December, 1957 and 25th March, 1958. On the same date another letter was written to the Income-tax Officer, Dibrugarh asking him to keep the collection in abeyance till the matter was disposed of by the Central Board of Revenue. By a letter dated 14th January, 1958 the Under­secretary, Central Board of Revenue informed the petitioner that the Board was unable to agree to an over-all revision of the instalment plan prayed for, but for the instalment of Rs. 1,66,000/- which fell due on the 31st December, 1957 the Depart­ment extended the period up to 28th February, 1958. Thereafter the Income-tax Officer, DibrugarK asked the petitioner to pay up the instalment of Rs. 1,66,000/- due on the 31st December, 1957 by 28th February, 1958 and the amount of the last instalment was to be paid on the due date that is 25th March, 1958. On 10th February, 1958 the petitioner made another application to the Direc­tors of Inspection (Special Investigation), Central Board of Revenue for reconsideration of his peti­tion dated 16th December, 1957 by which a revi­sion of the order fixing the date and instalment was prayed for. On the 1st March, 1958 the Under-Secretary, Central Board of Revenue again informed the peti­tioner that the Central Board of Revenue saw no reason to alter their decision communicated in its letter dated die 14th January, 1958. The peti­tioner wrote another letter on the 3rd March, 1958 to the Under Secretary, Central Board of Revenue, but in reply it was stated that the Board was not prepared to reconsider its decision. Thereafter the Income-tax Officer, Dibrugarh sent a letter to the petitioner on 12th March, 1958 stating that in view of the Board's decision refus­ing to alter the instalments, the petitioner was asked to inform the Department if the amount of Rs. 1,66,000/- due on 28th February, 1958 had since been paid, and the letter also contained a reminder for the balance of the amount which fell due on the 25th March, 1958. 1,66,000/- due on 28th February, 1958 had since been paid, and the letter also contained a reminder for the balance of the amount which fell due on the 25th March, 1958. Thereafter ano­ther letter dated 15th March, 1958 from Sri D. K. Dey, Income-tax Officer (Headquarters) for Com­missioner of Income-tax, Assam, Tripura and Mani-pur at Shillong was issued wherein the petitioner was informed that the instalment of Rs. 2,66,000/-was due to be paid by the petitioner on 25th March, 1958, and he asked the petitioner to arrange for deposit of the amount. On the 17th Mav, 1958 the Income-tax Officer, Dibrugarh passed an order to the effect that under the terms of the settlement Rs. 5,32,000/- became payable forthwith with interest thereon at the rate of 6 per cent from the date of default, that is, 80th September, 1957 and that a sum of Rs, 2,660/-was claimed as interest on the amount at 6 per cent for one month for the entire amount of Rs.-5,32,000/-. Thereafter the petitioner by his letter dated 27th June, 1958 wrote to the Income-tax Officer, Dibrugarh, placing before him the difficulties in .the matter of payment of instalment because of the slum in the tea market. Thereafter the Income-tax Officer, Dibrugarh by a letter dated 12th August, 1958 asked the petitioner to pay the out­standing demand immediately and warned that in case of his failure to pay up the amount in time, interest under paragraph 7 of the terms of settle­ment will have to be paid. The petitioner on 15th October, 1958 enclos­ed a cheque of Rs. 1,00,000/- towards his out­standing liability. The cheque was cashed by the Income-tax Officer. On the 24th December, 1958 the petitioner wrote a letter to the Income-tax Commissioner, Assam, praying for instalments of Rs. 5,000/- per month to clear up the demand. In the alternative he prayed that the sum of Rs. 8,32,000/- still due from the petitioner in respect of the settlement arrived at under Sec. 34 (IB) be adjusted from the deposit of Rs. 6,46,777/- paid towards the settlement account of the Hindu Un­divided joint family of Narsingdas Surajmal. 5,000/- per month to clear up the demand. In the alternative he prayed that the sum of Rs. 8,32,000/- still due from the petitioner in respect of the settlement arrived at under Sec. 34 (IB) be adjusted from the deposit of Rs. 6,46,777/- paid towards the settlement account of the Hindu Un­divided joint family of Narsingdas Surajmal. The jincome-tax Officer (Headquarters), or Commis­sioner of Income-tax, Assam, Tripura and Manipur by a letter dated 23rd February, 1959 informed the petitioner that unless the balance amount with interest was paid within ten days from the date of receipt of the letter coercive measures will be adopted against the petitioner. Thereafter by a letter dated 4th March, 1959, the Income-tax Offi­cer (Headquarters) informed the petitioner that his prayer for the adjustment of the balance against the sum of Rs. 6,46,777/- has been rejected and unless the petitioner paid within one week the amount due, the Income-tax Officer will be obliged to take action for the collection of the outstand­ing demand and issue certificates to the Collector under Section 46 (2) of the Act and the shares lodged by the petitioner as security would be put to sale. By the letter of 10th March, 1959 the peti­tioner wrote to the Commissioner of Income-tax, Assam asking him to refer the matter to the Direc­tors of Inspection and take steps after consulting them. Thereafter the petitioner came to know of the order of the Commissioner of Income-tax On 14th March, 1959 by which the prayer of the peti­tioner had been rejected and the Income-tax Offi­cer was directed to issue notices under Sec. 46(5A) of the Act. The Income-tax Officer, Dibrugarh in pursu­ance of the aforesaid instructions issued notices under Sec. 46 (5A) of the Act to the persons speci­fied in paragraph 35 of the petition. The peti­tioner then wrote a letter to the Income-tax Officer pointing out that this proceeding was illegal and asked him to withdraw the notices issued under Sec. 46 (5A) which was refused by the Commis­sioner of Income-tax. Thereupon the present peti­tion was filed in this Court on the 2nd of April, 1959, with the prayers which I have already S6t out. (4) To this petition the Income-tax Officer, Dibrugarh, the Commissioner of Income-tax, Assam, Tripura and Manipur, Central Board of Revenue, New Delhi and the Union of India have been impleaded as respondents. Thereupon the present peti­tion was filed in this Court on the 2nd of April, 1959, with the prayers which I have already S6t out. (4) To this petition the Income-tax Officer, Dibrugarh, the Commissioner of Income-tax, Assam, Tripura and Manipur, Central Board of Revenue, New Delhi and the Union of India have been impleaded as respondents. In response to the notice issued by this Court the Income-tax Officer, Dibrugarh filed an affidavit in reply and has con tested the allegations made and the points raised by the petitioner. (5) Notices issued under Sec. 46 (5A) have been assailed by the petitioner on a number of grounds. Dr. Pal who represents the petitioner has canvassed mainly four points before us. His first contention is that the proceedings under Chap­ter VI started under Sec. 46 (5A) are illegal inas­much as there was no proper notice of demand under Sec. 29 of the Income-tax Act which was a condition precedent for the initiation of the proceedings under Sec. 46. In this connection it was urged that the liabi­lity in respect of the amount of settlement under Sec. 34 (IB) is not a tax liability and thus no notice of demand could be issued under Sec. 29 and further that the notice purporting to be a notice of demand does not fulfil the requirements of Sec. 29 and does not conform to the form pres­cribed for a notice under the said section. Secondly it was contended that the provisions of Sec. 34(llj) and (1C) are beyond the legislative competence of the Parliament inasmuch as these sub-sections do not deal with tax liability and thus do not come under entry No. 82 of List I of the Seventh Sche­dule of the Constitution. Thirdly it was contend­ed that section 46 (5A) is ultra vires as it is violative of Articles 14 and 19 of the Constitution. In this connection it was urged that the langu­age of Sec. 46 (5A) when contrasted with the language of Sec. 46 (2) shows that sub-sec. (5A) of Sec. 46 does not apply to a liability other than tax liability. Lastly it was contended that the proceedings could not be initiated under Chapter VI as the recovery of the said sum has become time barred on the 16th of March, 1959 when the said notices under Sec. 46 (5A) are said to have been issued. (5A) of Sec. 46 does not apply to a liability other than tax liability. Lastly it was contended that the proceedings could not be initiated under Chapter VI as the recovery of the said sum has become time barred on the 16th of March, 1959 when the said notices under Sec. 46 (5A) are said to have been issued. (6) The first point raised by the petitioner can be examined both on the assumption that the liabi­lity of the amount fixed under the settlement is a tax liability or that it is not a tax liability. (7) Section 29 of the Act provides that when any tax, penalty or interest is due in consequence of any order passed under or in pursuance of this Act, the Income-tax Officer shall serve upon the assessee or other person liable to pay such tax, penalty or interest a notice of demand in the pres­cribed form specifying the sum so payable. The portion of Sec. 34 (1A) which is relevant for this case is as follows : "34 (1A) If, in the case of any assessee, the Income-tax Officer has reason to believe; - (i) that income, profits or gains chargeable to income-tax have escaped assessment for any year in respect of which the relevant previous year falls wholly or partly within the period beginning on the 1st day of September, 1939, and ending on the 31st day of March, 1946; and (ii) that the income, profits or gains which have so escaped assessment for any such year or years amount, or are likely to amount, to one lakh of rupees or more; he may, notwithstanding that the period of eight years or, as the case may be, four years specified in sub-section (1) has expired in respect thereof, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-sec­tion (2) of Sec. 22, and may proceed to assess or re-assess the income, profits or gains of the assessee for all or any of the years referred to in cl. (i), and thereupon the provisions of this Act (except­ing those contained in els. (i) and (iii) of the pro­viso to sub-sec. (1) and in sub-sees. (i), and thereupon the provisions of this Act (except­ing those contained in els. (i) and (iii) of the pro­viso to sub-sec. (1) and in sub-sees. (2) and (3) of this section) shall, so far as may be, apply accord­ingly : Provided that the Income-tax Officer shall not issue a notice under this sub-section unless he has recorded his reasons for doing so, and the Central Board of Revenue is satisfied on such reasons recorded that it is a fit case for the issue of such notice : Provided further that no such notice shall be issued after the 31st day of March, 1956. 34 (IB) Where any assessee to whom a notice has been issued under clause (a) of sub-sec. (1) or under sub-sec. (1A) for any of the years ending on the 31st day of March of the years 1941 to 1948 inclusive applies to the Central Board of Revenue at any time within six months from the receipt of such notice or before the assessment or re-assess­ment is made, whichever is earlier, to have the matters relating to his assessment settled, the Cen­tral Board of Revenue may, after considering the terms of settlement proposed and subject to the previous approval of the Central Government, accept the terms of such settlement, and, if it does so, shall make an order in accordance with the terms of such settlement specifying among other .things the sum of money payable by the asses­see. 34 (1C) Any sum specified in a settlement arrived at in pursuance of sub-section (IB) may be recovered and any penalty for default in making payment of any sum may be imposed and recover­ed in the manner provided in Chapter VI. 34 (1C) Any sum specified in a settlement arrived at in pursuance of sub-section (IB) may be recovered and any penalty for default in making payment of any sum may be imposed and recover­ed in the manner provided in Chapter VI. 34 (ID) Any settlement arrived at under this section shall be conclusive as to the matters stated therein; and no person, whose assessments have been so settled, shall be entitled to reopen in any proceeding for the recovery of any sum under this Act or in any subsequent assessment or re-assess­ment proceeding relating to any tax chargeable under this Act or in any other proceeding whatso­ever before any court or other authority any matter which forms part of such settlement" (8) Section 45 of the Act is as follows : "Any amount specified as payable in a notice of demand under sub-section (3) of Sec. 23A or under Sec. 29 or an order under Sec. 31 or Sec. 33, shall be paid within the time, at the place and to the person mentioned in the notice or order, or if a time is not so mentioned, then on or before the first day of the second month following the date of the service of the notice or order, and any assessee failing so to pay shall be deemed to be in default, provided that, when an assessee has presented an appeal under Sec. 30, the Income-tax Officer may in his discretion treat the assessee as not being in default as long as such appeal is undisposed of.'' (9) Section 46 cl. (1) lays down that when an assessee is in default in making a payment of in­come-tax, the Income-tax Officer may in his discre­tion direct that in addition to the amount of the arrears, a sum not exceeding that amount shall be recovered from the assessee by way of penalty. (1) lays down that when an assessee is in default in making a payment of in­come-tax, the Income-tax Officer may in his discre­tion direct that in addition to the amount of the arrears, a sum not exceeding that amount shall be recovered from the assessee by way of penalty. Section 46(5A) is as follows : "The Income-tax Officer may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the assessee at his last address known to the Income-tax Officer) re­quire any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Income-tax Officer, either forthwith upon the money becoming clue or being held or at or within the time speci­fied in the notice (not being before the money be­comes due or is held) so much of the money as is sufficient to pay the amount due by the tax­payer in respect of arrears or income-tax and penalty or the whole of the money when it is equal to or less than that amount. The Income-tax Officer may at any time or from time to time amend or revoke any such notice or extend the time for making any payment in pursuance of the notice. Any person making any payment in compli­ance with a notice under this sub-section shall be deemed to have made the payment under the authority of the assessee and the receipt of the Income-tax Officer shall constitute a good and suffi­cient discharge of the liability of such person to the assessee to the extent of the amount referred to in the receipt. Any person discharging any liability to the assessee after receipt of the notice referred to in this sub-section shall be personally liable to the Income-tax Officer to the extent of the liability discharged or to the extent of the liability of the assessee for tax and penalties, whichever is less. If the person to whom a notice under this sub­section is sent fails to make payment in pursuance thereof to the Income-tax Officer, further proceed­ings may be taken by and before the. If the person to whom a notice under this sub­section is sent fails to make payment in pursuance thereof to the Income-tax Officer, further proceed­ings may be taken by and before the. Collector on the footing that the Income-tax Officer's notice has the same effect as an attachment by the Collector in exercise of his powers under the proviso to sub­section (2) of Sec. 46. Where a person to whom a notice under this sub-section is sent objects to it on the ground that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for on account of the assessee, then, no­thing contained in this section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, to the Income-tax Officer." (10) Before a notice of demand can be issued under Sec. 29 the sum is to be a tax, penalty or interest due in consequence of any order passed under or in pursuance of the Act. If it is a tax due in consequence of an order passed under the Act, then a notice of demand in the prescribed form is to be issued. If the contention of the counsel for the petitioner is accepted that the amount fixed by the settlement is not a tax liabi­lity, the provisions of Sec. 29 will not be attract­ed and no notice of demand could be issued under Sec. 29. The question, therefore, of attacking the vali­dity of the notice on the ground that it does not conform to the form prescribed under the rules would not arise. The only question in that event to be considered will be what is the effect of fail­ure to issue a notice of demand in these circum­stances on the proceedings under Chapter VI for the recovery of the amount of settlement. It was contended by the petitioner that Sees. 45 and 46 are to be read together and no action can be taken under Sec. 46 (5A) of the Act unless the assessee is a defaulter within the meaning of Sec. 45 of the Act. A person can only be a defaulter under Sec. 45 if he has failed to deposit the amount in pursuance of the notice of demand under Section 29. A person can only be a defaulter under Sec. 45 if he has failed to deposit the amount in pursuance of the notice of demand under Section 29. The petitioner has rightly contended that if a notice of demand is not in the proper form the assessee cannot be regarded as a defaulter and no question of recovery under section 46 will arise. But in case the liability under the order of settlement is not a tax liability, Section 29 of the Act will not be attracted and no notice of demand could be issued under that Section. The result will be that an assessee who is liable to pay the amount under settlement could never be a defaulter and no action could ever be taken against him under Chapter VI. This will on nullifying the very purpose of Sec. 34 (1C) of the Act. It is a rule of construction that the various sections of an Act should be read harmoni­ously. The scheme of the Act seems to l>e that after the liability has been determined on settle­ment, the amount of settlement is to be recovered in the manner provided in Chapter VI. The provisions of Sees. 45 and 46 do not, therefore, in terms apply to the proceedings for recovery of the amount. The manner of recovery laid down in Chapten VI has been made applicable to the liability of the amount of settlement by virtue of Sec. 34 (1C) and not on its own terms. Therefore, it cannot be said that the provisions of Sec. 46 (5A) cannot be given effect to unless the assessee is declared a defaulter by his failure to pay up the amount mentioned in the demand notice issued under Sec. 29 of the Act. If the assessee has been given a notice of demand, though not strictly in the form prescribed for notices under Sec. 29, by which he can know the amount of his liability and the period during which he is to pay, it cannot be said that any principle of natural justice has been violated so as to debar the Department from proceeding with the recovery of the amount in the manner provid­ed in Chapter VI of the Act. In fact the argu­ment of the petitioner that the notice of demand in the present case did not conform to the pres­cribed form under Sec. 29 assumes that the liabi­lity of the amount of settlement is a tax liability within the meaning of Sec. 29. The scheme of Sec. 34 (1A) is that if the tax payable by an assessee on his income has escaped assessment for a particular period, notice could be given containing all the particulars under Sec. 22 sub-sec. (2) even though the period has expired and thereupon the Income-tax Officer can proceed to assess or re-assess the income, profits or gain of the assessee. The assessee whom notice has been given under Sec, 34 (1) (A) can apply under Sec. 34 (1) (B) to the Central Board of Revenue to have the matters relating to his assessment set­tled. After the terms of settlement have been ac­cepted, an order is passed by the Central Board of Revenue in terms of the settlement. Having regard to Ss. 34 (1) (A) and 34 (1) (B) the liability of the amount of settlement is a tax liability. It was contended that the tax necessarily implies an imposition on income which is to be computed in accordance with the provisions of the Act. Any lia­bility, therefore, fixed under the settlement cannot be said to be a tax as it is not fixed on the basis of any income computed in accordance with the provisions of the Act. Strictly speaking the amount could not be tax, but the liability is nonetheless in respect of the tax which is due from the assessee for the period during which his income escaped assessment. This provision for settlement of the income-tax liability was introduced in the Income-tax Act for the first time by the Ordi­nance followed by the amending Act. It is to my mind for the benefit of the assessee. Instead of going through the procedure of reassessment after notice has been given under S. 34 (1A), the assessee has been given an opportunity to settle his liability with the Central Board of Revenue. The amount, therefore, will be a tax liability within the meaning' of S. 29 of the Act. Instead of going through the procedure of reassessment after notice has been given under S. 34 (1A), the assessee has been given an opportunity to settle his liability with the Central Board of Revenue. The amount, therefore, will be a tax liability within the meaning' of S. 29 of the Act. (11) In that view of the matter the next ques­tion to be considered is how far the notice given to the assessee on 10-2-1956-"Annexure C" to the petition fulfils the requirements of S. 29. It was contended by the counsel for the petitioner that the notice under S. 29 is to be in a prescribed form. Rule 20 of the Rules framed under the Act provides that a notice of demand under S. 29 shall be in the form given below, and is to be accompanied by the assessment form appended hereto; provided that the said assessment form need not accompany the notice in case where a penalty has been levied subsequent to the assessment order and it is not practicable to include the amount of the penalty in the assessment form. Rule 20A then provides that the notice of de­mand under S. 29 to be served upon the assessee in pursuance of an order under sub-s. (1) of S. ISA shall be in the form appended to the said rule. Strictly speaking the notice given on 10-2-1956 does not conform to the form appended to R. 20 or 20A. The Advocate General who appears for the Department, however, relies upon R. 49 which pro­vides that the notice of demand in respect of the sum of money specified in the order under sub-s. (IB) of S. 34 is to be in the form appended to the said Rule. The present notice is in accordance with the form appended to R. 49. Two submissions have been made on behalf of the petitioner in reply to the contention by the Ad­vocate General. It is firstly urged by the counsel for the petitioner that Rr. 20 and 20A in terms refer to S. 29 of the Act. Rule 20A lays down that not­withstanding anything contained in R. 20, a parti­cular form is prescribed for assessment under S. ISA. As there is no reference to S. 29 in R. 49, any notice issued under R. 49 cannot be regarded as notice under S. 29. 20 and 20A in terms refer to S. 29 of the Act. Rule 20A lays down that not­withstanding anything contained in R. 20, a parti­cular form is prescribed for assessment under S. ISA. As there is no reference to S. 29 in R. 49, any notice issued under R. 49 cannot be regarded as notice under S. 29. The language of R. 49 also shows that it is in respect of the sum of money specified in an order under sub-s. (IB) of S. 34. Section 34 (IB) does not provide for any notice. I do not think that there is much substance in this contention. Once it is accepted that the liability under the order of settlement is a tax liability, what S. 29 requires is that a notice of demand is to be issued in the prescribed form. The word "prescribed" has been defined under the Act to mean prescribed by the Rules, Section 59 of the Act gives power to the Central Board of Revenue to make Rules for carry­ing out the purpose of the Act and for the ascer­tainment and determination of any class of income. Clause 2 (e) of S. 59 gives power to the Central Board of Revenue to frame rules, providing for any matter which by the Act is to be prescribed. One of the matters which by the Act is to be prescribed is the form of notice of demand under S. 29. The Central Board of Revenue, therefore, was empowered to frame rules under S. 59 (2) (e) provid­ing for the form of the notice of demand under S. 29 and in the exercise of the aforesaid power R. 49 was framed. Section 29 itself does not give any power to frame rules and the power for enacting R. 49 is to be found in S. 59. It is, therefore, not necessary to refer to S. 29 in R. 49 itself. The fact that in Rr. 20 and 20A there is a reference to S. 29 is not of much consequence. An argument was addressed in this connection to the effect that the power given to frame rules under S. 59 (2) (e) is confined to matters which are to be prescribed by this Act. Section 34 (IB) does not prescribe for any notice. 20 and 20A there is a reference to S. 29 is not of much consequence. An argument was addressed in this connection to the effect that the power given to frame rules under S. 59 (2) (e) is confined to matters which are to be prescribed by this Act. Section 34 (IB) does not prescribe for any notice. Any notice, therefore, of demand in respect of a sum due under the order passed under S. 34(1B) cannot be said to be a matter which is prescribed by the Act. As I have already pointed out S. 29 also requires that a form of notice to be issued • under S. 29 is to be in the prescribed form and if a rule has been framed providing for the form the said rule is nothing else but one relating to a matter which is prescribed by the Act. Moreover, from the note appended to R. 20 it is clear that any of the particulars which are not required in a particular type of demand may be deleted. In that view of the matter, substantially the contents of the notices dated 10th February conform to the requirements of Rr. 20 and 20A. In my opinion, therefore, if the liability under the settlement is not a tax liability, S. 29 would not be attracted and no notice could be given under S. 29. The question, therefore, of the assessee being a defaulter would not arise and it cannot be said that S. 46 cannot be applied to the recovery of the aforesaid amount as no notice under S. 29 could be given, but if the amount under the order is a tax liability the notice issued on the 10th February was a notice of demand in compliance with the pro­visions of S. 29 and the assessee not having paid up the amount specified in the said notice was a defaulter and the provisions of S. 46 were at­tracted. (12) As regards the second contention that S. 34 (IB), (1C), (ID) are void for want of legislative I competence, the Act comes under Item 82 of List 1 of the Seventh Schedule which provides for taxes I on income other than agricultural income. It need not be emphasized that the list enumerated broad categories and the entries in the list are to be given large and liberal interpretation. It need not be emphasized that the list enumerated broad categories and the entries in the list are to be given large and liberal interpretation. The items in the lists are not to be interpreted in a nar­row and pedantic sense. They are to be given meaning of widest amplitude, every general word should be held to extend to all ancillary and subsidiary matters which fairly and rea­sonably can be said to be comprehended in it. The Income-tax Act is an Act relating to taxes on income other than agricultural income. The provision: relat­ing to settlement of amount of tax which ^escaped assessment, and the provision for the -mode of its recovery are matters which are necessarily ancillary to the matter of taxation. It cannot, therefore, be' said that the provisions of S. 34 (IB), (1C) and (ID) are beyond legislative competence of .the Parlia­ment. (13) The constitutionality of S. 46 (5A) 'has been challenged both on the ground that it violates the provisions-, of Arts. 19 (1) (f) and 14 of the Consti­tution. It was contended that the power given to the Income-tax Officer to issue notices to the debtors of the assessee directing them not to pay the amount of debt to the assessee, but to pay the same towards the liquidation of the amount of settlement, affects the right of the assessee to hold and dispose of the property. The debt due to the assessee is a property and any power given to regulate the holding and disposal of such property unless saved by Art. 19 (2) (5) must be struck down. It was urged that the power given is unrestricted; no provision has been made for appeal against the order issued under S. 46 (5A), no rules of guidance have been laid down in the section for the officer who has been empowered to issue an order under the aforesaid section. The restriction, therefore, is unreasonable and cannot be sustained*under Art. 19 (2) (v). It was contended by the Advocate General in reply to the contention of the petitioner that the impugned law has been enacted by the Parliament in the exercise of its taxing power under Art, 265 of the Constitution read with Art. 245 and the legislative List. As such, its validity cannot be test­ed with reference to the requirements of Art. 19 of the Constitution. The contention is that Arts. As such, its validity cannot be test­ed with reference to the requirements of Art. 19 of the Constitution. The contention is that Arts. 19, 21, 31 (1) deal with what is known as the Police power of the State in America. Article 31 (2) deals with the power of eminent domain. The taxing power is an attribute of sovereignty. It has been expressly recognised by Art. 265 of the Constitu­tion. If the purpose of the taxing law is to augment revenue of the State, its validity cannot be tested with reference to the requirement of Art. 19 (2) (5). Such a Jaw falls outside the ambit of Art. 19 of the Constitution. The contention in reply by the counsel for the petitioner is that Art. 265 only lays down that no tax be levied or collected except by a valid law. If any law is enacted providing for levy or collection of tax, such a law itself will be subject to the fundamental rights enshrined in Chapter III of the Constitution and the validity of such a law can be tested with reference to Art. 19. There is noth­ing in Art. 19 or Art. 265 to make such a law im­mune from attack on the ground of violation of the fundamental rights guaranteed under Art. 19. If was in the alternative contended that so far as the law provides for imposition and assessment of tax and its recovery, it may be immune from an attack tinder Art. 19 of the Constitution, but when it pro­vides for the recovery in a manner so as to affect the fundamental right guaranteed under Art. 19 (1) (f) of the Constitution without laying down any rules for guidance of the Income-tax Officer when and in what circumstances the manner provid­ed under S. 46 (5A) is to be adopted, the validity of such a provision can be tested on the grounds of Art. 19 (2) (v) of the Constitution. 11)-Taxation is the legal capacity of sovereignty '-?* wfflsof its governmental agents to1 exact or impose sfc^dbaige upon persons or their property, for the SH|(pSfat;'ibf -Government and for the payment for v^f-vtihse public purposes, which it may constitu-MjiBiHy-Bany out (Willis' Constitutional Law p. 716). 11)-Taxation is the legal capacity of sovereignty '-?* wfflsof its governmental agents to1 exact or impose sfc^dbaige upon persons or their property, for the SH|(pSfat;'ibf -Government and for the payment for v^f-vtihse public purposes, which it may constitu-MjiBiHy-Bany out (Willis' Constitutional Law p. 716). £*<bercase of Providence Bank v. Billings, (1860) 7 <£Mr'£d -939, -the Supreme Court of America refer-mMfef-to' taxing power observed : Tilus vital power may be abused, but the Con-f^ibafiaa of the United States was not intended to \ fMBSEsii the correction of every abuse of power which > «tey be 'committed to the State Governments. The 'MjiTiiiM 'Wisdom and justice of the representative I fcii|y sfflfl >its relations with its constituents, furnish •: SSfe «ily security where there is taxation, as well as ; aUBio&fc 'unwise legislation generally." •33) The taxing power of the State is one appli-^•He to all persons who are subject to the sover-|«^nfcy *{$ the State and the obligation of such per-jawis is 1e provide for the maintenance and conduct Mt tthe State. By extending special protection to cer-fowi 'tights of citizen enumerated under Art. 19, it 'fCMMtt bs -said to be the intention of the Constitu-f&Mi soakers to affect the fundamental obligation of jAexafizen to provide for the maintenance and con-|4«£ <of the State. Imposition of tax to some extent JpN& » restraint on the rights of a citizen; but the SBWEposes of. -enacting a taxing legislation cannot be iwii Jo l»e regulatory one. The primary object of a tax legislation is to Ijpwwnte for the revenue of the State. In the case f «nzshaber v. Union Pacific Railroad Co., (1915) <<W taw 35d 493 it was observed that it was well- •*Si$e3 ftat the due process clause of the 5th amend- ••BBrti. is aua a limitation upon the taxing power con-*1fewwl "«pon 'tlie Congress, by the Constitution; in <<niker -words, that the Constitution does not conflict •<«& Sfeelf by conferring upon the one hand, a taxing -jgumma, 4ind 'taking the same power away, on the •fetr hy the limitation of due process clause. The ''afciHjer tame up for decision before the Madras High *ChMft In the case of Ananthakrishnan v. State of 3*B&as .reported in AIR 1952 Mad 395 . "The validity of the Madras Stamp Act of 1922; *»&)r wteeli a fee of Rs. The ''afciHjer tame up for decision before the Madras High *ChMft In the case of Ananthakrishnan v. State of 3*B&as .reported in AIR 1952 Mad 395 . "The validity of the Madras Stamp Act of 1922; *»&)r wteeli a fee of Rs. 625/- was prescribed lor eii-•saSMBBBril as an advocate was challenged and it was •«$Mftea<]ed that the petitioner as a citizen of India ^WMs'-enfitled to carry on any profession. The imposi-^"Saa «f 'file -enrolment fee was a restriction placed <-"«»' |£B right to carry on business and unless that was Htel&d by the tests laid down under Art. 19 (2) (vi) JSsSfiBlSifSWi was illegal. Venkatarama Ayyar, J. for-«Sl4fat^ the proposition at page 405 of the report a« Wkfws : ^"Biit what 'follows from this? Does the favour-«ssl jiosStiori granted to the fundamental rights carry "wife-It' any immunity from taxation? The right to I'feSfr'las: is "an incident of sovereignty and the legis-iiJ&Bas as sovereign bodies have plenary powers of <%Bafl8on subject only to such limitations as may be "siWSinHbed'by the Constitution and nowhere in the '•"QBOsfitetion do we find any prohibition against V'Snattion of 'fundamental rights. Part III does not varitaiti any -such inhibition." Dealing with the argument that the fundamental rights are under the Constitution in a paramount constitution the legislatures of the country have no power to abrogate or abridge them, that the power to tax is "the power to destroy and that, therefore, quit operative in respect of the rights conversed Part III, it was observed that "Part III renders void in terms only laws in force before commencement of the Constitution and the laws to be enacted by the States, that is, in future. It does not apply to the Constitution itself and it is not laid down that the other portions of the Constitution should be void as against the pro­visions of Part III". After referring to various American authorities, it was held that "the Stamp Act being a measure of taxation must be constitutionally valid.'' It was fur­ther observed in this case that the power to tax is an attribute of sovereignty; it carries with it the power to determine when and how the tax shall be levied and it is no objection to its validity that it is levied before the commencement of the trade and not after. The theory of previous restraint has no application to the laws of taxation. The theory of previous restraint has no application to the laws of taxation. (16) In the case of Guruviah Naidu and Bros, v. State of Madras, AIR 1958 Mad 158 , the provi­sion of the rules framed under the Madras General Sales Tax Act under which a dealer was required to take out a licence and pay the fees prescribed there­for was challenged. At page 168 of the report the observation is as follows : "Thus far we have proceeded on the basis that unless the system of licensing introduced by R. 5 satisfied the test of reasonableness laid down by Art. 19 (6) the restriction imposed would be unconstitu­tional. There is however one other approach to this problem which we consider worth pursuing........ The Constitution vests the Union and the States with a power of taxation, which, subject to a few excep­tions is plenary in its nature. The imposition of a tax on a trade or on the profits of a trade is un­doubtedly a burden and unless the tax was validly imposed, it would be an illegal and undue inter­ference with the freedom of trade guaranteed by Art. 19 (1) (g) and so invalid. If a tax were a restriction which could be legally imposed on a business, the right to carry on which was guaranteed by the Constitution, the validity of the tax cannot be judged by standards applicable to regulations Or restrictions imposed on the manner of carrying on the business - restrictions which flow from the nature of the commodity or the re­percussions of an unregulated trade on the health, morality or safety of the public. Taxation is the supreme function of the State, the exercise of a power which is necessary for the very existence and maintenance of die State. The restraints imposed by taxation are wholly beyond the scope of Art. 19 and therefore not sub­ject to the tests of a valid legislation under that provision. The saving in Art. 31, sub-cl. Taxation is the supreme function of the State, the exercise of a power which is necessary for the very existence and maintenance of die State. The restraints imposed by taxation are wholly beyond the scope of Art. 19 and therefore not sub­ject to the tests of a valid legislation under that provision. The saving in Art. 31, sub-cl. 5 (b) (i) placing out of the purview of the main article the deprivation of property which taxes entail and which was put in only by way of abundant caution, is a pointer establishing the plenitude of the taxing power." (17) Cooley in his Constitutional Limitations dealing with taxing power observed : "It is unlimited in its range, acknowledging in its very nature no limits so that security against its abuse is to be found only in the responsibility of the legislation which imposes the tax to the consti­tuency who are to pay." (18) If it is accepted that the activities which are protected under Art. 19 are immune from a tax, it will lead to very anomalous results. Cases where the law under which a tax has been imposed is other­wise invalid, the realisation of tax may affect the fundamental right guaranteed to a citizen under the Constitution and he may be entitled to come to this Court for the enforcement of his fundamental right, but it cannot be said that the validity of a law providing for the levy and collection of tax, having the effect of restraining the activities of a citizen protected under Art. 19. has to be tested with reference to Art. 19. In the case of Ramjilal v. The Income-tax Officer, Mohindar Garh, AIR 1951 SC 97 , an application was made under Art. 32 of the Constitution for appropriate order for the pro­tection of what the petitioner claimed to be his fundamental rights guaranteed by Arts. 19 and 31. On 14-11-1948 the Commissioner of Income-tax by a notification informed that persons belong­ing to the native States of Nabha and Nalagarh would be assessed to income-tax under the Patiala Income-tax Act. Prior to this there was no law in the Nalagarh State for imposition of income-tax on the subjects of that State. The petitioner who was a resident of Ateli formerly forming part of the Nabha State, received a notice under Ss. Prior to this there was no law in the Nalagarh State for imposition of income-tax on the subjects of that State. The petitioner who was a resident of Ateli formerly forming part of the Nabha State, received a notice under Ss. 22 (2) and 38 of the Patiala Income-tax Act, and it was the validity of this notice which was challenged by the petitioner under Art. 32 of the Constitution. It was contended by the counsel for the peti­tioner that the Patiala Income-tax Act did not apply to the petitioner and assessment of tax on the peti­tioner's income was illegal. The State by insisting on collecting the tax so illegally assessed was threaten­ing to invade the petitioner's fundamental right to property guaranteed by Art. 31 (1) of the Constitu­tion. It was held in that case that the application was not one for the enforcement of the fundamental right under Art. 31 (1). What the petitioner in that case intended to enforce was the right not to be taxed except in accordance with law under Art. 265 of the Constitution. It was observed that clause (1) of Art. 31 must be regarded as concerned with deprivation of pro­perty otherwise than by the imposition or collection of tax, for otherwise Art. 265 becomes wholly re­dundant. In the United States of America the power of taxation is regarded as distinct from the exercise of police power or of eminent domain. Our Constitution evidently has also treated taxation as distinct from compulsory acquisition of property and has made independent provision giving protection against taxation save by authority of law. (19) In my opinion, the protection against imposition and collection of taxes arises directly from Art. 265 and is not secured by clause (1) of Art. 31. It was contended by the counsel for the petitioner that this case is no authority for the proposition that the validity of a taxing statute cannot be tested with reference to Art. 19. This case only lays down that any attempt to enforce the guarantee given to a citizen under Art. 265 of the Constitution namely that no tax can be levied except by authority of law, is not a fundamental right and the guarantee afforded under Art. 31 (1) not to deprive a citizen of his property, without the authority of law does not apply to a taxing statute. It is true that the case was not one where the validity of a taxing law was challenged on the ground of violation of Art. 19. But their Lordships of the Supreme Court referred to the law in the United States of America that the power of taxa­tion is regarded as distinct from the exercise of police power or eminent domain. If the exercise of a taxing power is distinct from the exercise of police power or of eminent domain, the exercise of such power legitimately cannot be tested with refe­rence to the restrictions placed on the right of the State to exercise its police power as contained in Art. 19 of the Constitution. Article 19, to my mind, enumerate* eeata|iE.. activities of a citizen which have been jantssfcwLt1; The State in the exercise of the police pow»ES ««B^ '>] not encroach upon these activities and any. res&tMt placed on those activities in the exercise efi its • police power have to be tested with referenc* te : the provisions of Art. 19 (2). Rut if. the State k« . acted in the exercise of its taxing power-, tha 6»fe- > tations imposed on the exercise of police p@e«s& s under Art. 19 cannot be placed on the exeecisa <oi j the taxing power of the State. (20) In my opinion therefore the validity of titaf law which provides for a levy or collection rf *|] tax cannot be tested with reference to Art. 19. of tibsj Constitution. Such a law is outside the axatdt «l§ Art. 19. It is however, contended that the vaBiitbFfj of those provisions of the Income-tax Act by, id&fflejfj tax has been levied on the income of the petililwegSt and those for the collection of the said tax,-. nsayrB**": be liable to be tested with reference to Art,- .$9§awlt that the activities enumerated under Arfc, 3$|,iM$t not be immune from taxation. But when, Qlet ps«aE®~| dure provided for the recovery of the ssn&tvA- isS such as to result in infringement of the rijjfet; SM^i ranteed under Art. 19 (1) (f), the law layiag;' OftiKJ .such a procedure will be void under Art;. 13.-.'c&'dhk? Constitution. But when, Qlet ps«aE®~| dure provided for the recovery of the ssn&tvA- isS such as to result in infringement of the rijjfet; SM^i ranteed under Art. 19 (1) (f), the law layiag;' OftiKJ .such a procedure will be void under Art;. 13.-.'c&'dhk? Constitution. This argument overlooks the distinction* feM>-ween the case where the law itself has the effieet <l \ infringing the fundamental right guaranteed^ wwfe* \ Art. 19 and the case where any action takea joafer : a valid law results in the infringement of: taik*. iH I of the Constitution. If the law providing ftsstt &r ;• the imposition of tax and for recovery of: tibs- saa3 j. tax cannot be tested with reference to tJie neqaifft- -ments of Art. 19, it is difficult to hold that ttn» W- '. suit flowing from the exercise of pe.wer. urafer ttnr i said law can be tested with reference to the- gMMir- j sions of Art. 19. Moreover, the result of acting "j under S. 46 (5A) is to deprive the assesses- el && j property and not only to regulate the- use- of tite 1 property or to restrain the right to hold aodt got*. S sess the property. Such a law, if at all, is one dealing--wflfi.tfctt deprivation of property and will thus be eutsid& &*f scope of-Art. 19. In the case of Collector-e£ On this a petition under S. 491, CrfnatnaJ ft»-cedure Code was filed challenging the Tsalictfty o& S. 46 (2) of the Income-tax Act and S. 48 of ti» Madras Act. The validity of these two seetftHSs Wfc challenged on the ground that it offendfecf agtn£is& Arts. In the case of Collector-e£ On this a petition under S. 491, CrfnatnaJ ft»-cedure Code was filed challenging the Tsalictfty o& S. 46 (2) of the Income-tax Act and S. 48 of ti» Madras Act. The validity of these two seetftHSs Wfc challenged on the ground that it offendfecf agtn£is& Arts. 14, 19, 21 and 22 of the Constitution DoaffioB; with the question of the infringement of Art, IS OR the Constitution, it was observed as follows.; "It was held by the majority of the learned Judges in A. K. Gopalan v. State of Madras AIR 1950 SC 27 , that the right to move freely through-out the territory of India referred to in Art. 19 (1) (d) of the Constitution was but one of the many at­tributes included in the concept of the right to 'persona] liberty' and when a person is lawfully de­prived of his personal liberty without offending Art. 21, he cannot claim to exercise any of the rights guaranteed by sub-cls, (a) to (e) and (g) of Art. 19 (1) for those rights can only be exercised by a free roan. In that sense, therefore, Art. 19 (1) (d) has to be read as controlled by the provisions of Art. 21 and the view that Art. 19 guarantees the substantive right and Art. 21 prescribes a procedural protec­tion is incorrect. This decision must now be taken as having settled once for all that the personal rights guaranteed by sub-cls, (a) to (e) and (g) of Art. 19 ) are in a way dependent on the provisions of Art. 21 just as the right guaranteed by sub-cl. (f) of Art. ;19 (1) is subject to Art. 31. If the property itself is taken lawfully under Art. 31, the right to hold or dispose of it perishes with it and Art. 19 ,'l) (f) cannot be invoked. Likewise, if life or personal liberty Ss taken away lawfully under Art. 21, no question of the exercise of fundamental rights under Art. 19 (1) (a) to (e) and (g) can be raised." (21) This case, therefore, is an authority for the Imposition that if the liberty of a person has been affected under Art. 21 or if the individual has been rightfully deprived of his property under Art. 31 of the Constitution, the question of exercising the rights guaranteed under Art. 19 will not arise. It was strenuously contended that this case only deals with the question of arrest and not with the depri­vation of property. It was further contended that this case is only an authority for the proposition that Art. 19, is subject to Art. 31 of the Constitution. But it is not an authority for the proposition that Art. 19 is subject to Art. 265 of the .Constitution. What this case to my mind lays down is that once a- person's personal liberty has been affected or that be has been deprived of his property, under a valid law, the question of infringement of the guarantee under Art. 19 will not arise. Such a law falls out­side the ambit of Art. 19. The deprivation is also not hit by Art. 31 (1) as it is with the authority of law, and also being a taxing statute is outside the Article. It has not been argued in the present case that Art. 31 (2) has been violated. If Art. 31 (1) or 31 (2) have not been vio­lated and the law falls outside the ambit of Art. 19, it is not necessary to consider whether the restric­tion placed on the assessee's right to hold and pos­sess- property is unreasonable. The argument, there­fore 'that S. 46 (5A) gives an unfettered discretion to the Income-tax Officer and is therefore violative of Art. 19 being an unreasonable restriction on the right of the petitioner to hold and possess property ca»n«t be accepted. ('22) The next ground on which the validity of S. 46 (5A) is challenged is that it violates the gua­rantee of equal protection of law under Art. 14 of the Constitution. It was urged that the Income-tax Officer has been given naked and arbitrary power to single out' any defaulting assessee and subject him to a more stricter mode of recovery as provided for under the aforesaid sub-section than the one provid­ed for under S. 46 (2). The germ of discrimination ties in the conferment of arbitrary and naked power on Income-tax Officer, a power which is neither to be exercised by a Judicial Officer nor is controlled by a right of appeal to a superior officer. Such a power, it is contended, contains in it­self the germ of discrimination and is hit by Art. 14 of the Constitution. Such a power, it is contended, contains in it­self the germ of discrimination and is hit by Art. 14 of the Constitution. It was contended by the Advocate General in reply that the law applies equally to all the assessees. It makes no discrimination between assessees. If in applying the aforesaid law any individual Income-tax Officer acts in a discriminatory manner his act may be challenged1 as being mala fide, but the law itself cannot be said to contain any germ of discrimination. It was further contended that S. 46 (2) has been held not to violate Art. 14 and the same reasoning will apply to S. 46 (5A) of the Act. Article 14 had been the subject-matter of interpretation in various decisions of the Supreme Court, and it is not necessary to1 refer to all the cases. Each law will have to be examined on its own-facts and circumstances in order to determine .whe­ther it infringes Art. 14 of the Constitution. That a special and speedier method of recovery of the tax dues has been provided for in Chapter VI of the Act, cannot be disputed. That special and speedier method of recovery of the tax liability is justified having regard to the nature of the liability and the) necessity of realising the tax dues speedily to main­tain the Government can also not be denied. (23) In America the necessity of summary modes of collection has been justified. In Willoughby's Constitution of the United States, second edition at page 1883, it is observed as follows : "For the collection of taxes, as well as for the appraisement of property for taxation, summary modes of procedure may be used; the justification for this being that, without such means, no Govern­ment could exist. Hence it has been held that, when a tax is assessed and collected according to custo­mary modes and usages, or in subordination to the principles underlying them, the requirements of due process are satisfied.'' (24) To the same effect is the observation in Cooley's Constitutional Limitations Vol. Hence it has been held that, when a tax is assessed and collected according to custo­mary modes and usages, or in subordination to the principles underlying them, the requirements of due process are satisfied.'' (24) To the same effect is the observation in Cooley's Constitutional Limitations Vol. II at page 1103: "What method shall be devised for the collec­tion of a tax, the legislature must determine, subject only to such rules, limitations, and restraints as the constitution of the State may have imposed." (25) It cannot, therefore, be said that Chapter VI of the Act laying down summary method of rea­lisation of the tax dues, is hit by Art. 14 of the Constitution. The question in the present case is if there are several modes of recovery provided under the Act, one procedure being more stringent than the other and if the assessing authority is given power to apply anyone of these methods at his dis­cretion to any of the assessees, can it be said that such law giving wide discretion unregulated by the Act infringes Art. 14 of the Constitution? (26) The conception of equality before the law] does not involve the idea of absolute equality i among human beings. Equality before the law means that among the equals the law should be equal and should be equally administeied and that the like should be treated alike. This Article does not therefore absolutely prevent the State from dis­criminating. The State has the power of what is known as "classification" on the basis of a rational distinction relevant to the particular subject dealt with. In the case of the State of West Bengal v. Anwar Ali Sarkar, AIR 1952 SC 75 , Mukherjee, J. observed that : "It appears to be an accepted doctrine of Ame­rican Courts that the purpose of the equal protec­tion clause is to secure every person within the States against arbitrary discrimination, whether oc­casioned by the express terms of the statute or by their improper application through duly constituted agent.......The position, therefore, is that when the statute is not itself discriminatory and the charge of violation of equal protection is only against the official, who is entrusted with the duty of carrying it into operation, the equal protection clause could be availed of in such cases; but the officer would have a good defence if he could prove bona fides. But when the statute itself makes a discrimination without any proper or reasonable basis, the statute would be invalidated for being in conflict with the equal protection clause, and the question as to how it is actually worked out may not necessarily be a material fact for consideration." In this case the Act was struck down as being violative of Art. 14 of the Constitution. (27) In the latter case from Kathi Raning Rawat v. State of Saurashtra, AIR 1952 SO 123 the Act was held to be constitutional. In the case of Kedarnath v. State of West Bengal, AIR 1953 SC 404 , both these cases were considered and it was observed by Chief Justice Patanjali Shastri that : "Now, it is well settled that the equal protec­tion of the laws guaranteed by Art. 14 of the Con­stitution does not mean that all laws must be gene­ral in character and universal in application and that the State is no longer to have the power of distinguishing and classifying persons or things for the purposes of legislation. To put it simply, all that is required in class or special legislation is that the legislative classification must not be arbitrary but should be based on an intelligible principle having a reasonable relation to the object which the legis­lature seeks to attain......... It has been further contended that even as­suming that the scheduled offences and the persons charged with the commission thereof could pro­perly form a class in respect of which legislation could be enacted, S. 4 of the Act is discriminatory and void, vesting, as it does, an unfettered discre­tion in the Provincial Government to choose any particular "case" of a person alleged to have com­mitted an offence falling under any of the specified categories for allotment to the Special Court to be tried under the special procedure, while other of­fenders of the same category may be left to be tried in ordinary courts. In other words S. 4 permits the Provincial Gov­ernment to make a discriminatory choice among per­sons charged with the same offence or offences for trial by a Special Court, and such absolute and unguided power of selection, though it has to be exercised within the class or classes of offences men­tioned in the schedule, is no less discriminatory than the wider power of selection from the whole range of criminal law conferred on the State Government by the legislation impugned in AIR 1952 SC 75 . The vice of discrimination, it is said, consists in the unguided and unrestricted power of singling out for different treatment one among a class of persons all of whom are similarly situated and circumstanced, be that class large or small. "the argument overlooks the distinction between those cases where the legislature itself makes a com­plete classification of persons or things and applies to them the law which it enacts, and others where the legislature merely lays down the law to be ap­plied to persons or things answering to a given des­cription or exhibiting certain common characteristics, but being unable to make a precise and complete classification, leaves it to an administrative authority to make a selective application of the law to per­sons or things within the defined group, while laying down the standards or at least indicating in clear terms the underlying policy and purpose, in accordance with, and in fulfilment of, which the ad­ministrative authority is expected to select the per­sons or things to be brought under the operation of the law. A familiar example of this type of legislation is the Preventive Detention Act, 1950, which having indicated in what classes of cases and for what pur­poses preventive detention can be ordered, vests in the executive authority a discretionary power to select particular persons to be brought under the law. A familiar example of this type of legislation is the Preventive Detention Act, 1950, which having indicated in what classes of cases and for what pur­poses preventive detention can be ordered, vests in the executive authority a discretionary power to select particular persons to be brought under the law. Another instance in point is furnished by those provisions of the Criminal Procedure Code which provide immunity from prosecution without sanc­tion of the Government for offences by public ser­vants in relation to their official acts, the policy of the law being that public officials should not be unduly harassed by private prosecution unless in the opinion of the Government, there were reasonable grounds for prosecuting the public servant which accordingly should condition the grant of sanction.'' (28) That there should be a special and sum­mary procedure for the recovery of the tax dues cannot be doubted. Having regard to the object of the Income-tax Act. it is fair to provide a special procedure for recovery of the tax dues and not to leave the authorities to realise the amount of tax dues through the normal procedure of Courts. In State Railroad Tax Cases, (1876) 92 US 575 the Court said "It is a wise policy. It is founded in the simple philosophy derived from the experience of ages that the payment of taxes has to be enforced by sum­mary and stringent means against a reluctant and often adverse sentiment; and to do this successfully, other instrumentalities and often mode of procedure are necessary, than those which belong to Courts of justice." Chapter XVI (VI?) which, therefore, provides for special procedure cannot be struck down being in violation of Art. 14. The contention, as I have al­ready referred to was that the germ of discrimina­tion is to be found in S. 46 (5A) which gives un­regulated power to the Income-tax Officer to apply the procedure provided under the aforesaid sub­section against some assessees and to apply the pro­cedure provided under S. 46 (2) which is less strin­gent against the other assessees placed in the simi­lar circumstances. (29) In the case of Kashiram Agarwalla v. Col­lector of 24-Parganas, AIR 1958 Cal 524 the ques­tion which came up for consideration was the vali­dity of S. 46 (2) of the Income-tax Act. (29) In the case of Kashiram Agarwalla v. Col­lector of 24-Parganas, AIR 1958 Cal 524 the ques­tion which came up for consideration was the vali­dity of S. 46 (2) of the Income-tax Act. The ground on which the validity was attacked was that it was left to the sweet will of the Income-tax Officer to issue a certificate for recovery of the amount under the Public Demands Recovery Act, and thereafter for the Collector to proceed under the provisions of the Revenue Acts providing for the recovery of the arrears of revenue or as a Civil Court. The Section giving unregulated discretion was violative of Art. 14 of the Constitution. After considering the cases referred to above, it was held that "if the law is the same for all, the provision of alternative procedure making it possible for the relevant authority to apply one procedure in some cases and the other procedure in other cases does not offend against Art. 14 of the Constitution." It was contended by the counsel for the petitioner that this proposition has been very widely put. In fact for the purposes of that case, it was not neces­sary to decide that question. The case was concluded by the earlier decisions of the Supreme Court where­in it was expressly held that the proviso is not a distinct and separate mode of recovery but it only gives an additional power to the Collector to issue warrant of arrest. I shall deal with those cases of the Supreme Court later but the observations quot­ed above are apposite to the facts of the present case. (30) In the case of Collector of Malabar, (S) AIR 1957 SC 688 to which I have already referred, it was held that S. 48 of the Madras Revenue Re­covery Act & S. 46 (2) of the Income-tax Act were not violative of Art. 14. In this case so far as the ques­tion of violation of Art. 14 was concerned, the reasonings in the earlier case of Purshottam' Govindji Halai were reiterated. It is urged by the counsel for the petitioner that in the case of Pur-frhottam Govindji Halai v. B. M. Desai, (S) AIR 1956 SC 20 , the validity of S. 46 (2) of the Income-tax Act and S. 13 of the Bombay Revenue Recovery Act was upheld. It is urged by the counsel for the petitioner that in the case of Pur-frhottam Govindji Halai v. B. M. Desai, (S) AIR 1956 SC 20 , the validity of S. 46 (2) of the Income-tax Act and S. 13 of the Bombay Revenue Recovery Act was upheld. The" constitutionality of S. 46 (2) was attacked mainly en two grounds, firstly on the ground that S. 46 (2) provided for two alternative modes of recovery and the authority had power to apply either of the two methods. This contention was repelled on the ground that the proviso does not indicate a different and alternative mode of re­covery of the certified amount of tax, but only con­fers additional powers on the Collector for the bet­ter and more effective application of the only mode of recovery authorised by sub-s. (2) of S. 46. The second ground on which the protection under Art. 14 was invoked was based on a compari­son of different laws adopted by different States for the recovery of land revenue. This contention was repelled on the ground that the classification may be founded on different bases, namely, geographical or according to objects or occupation or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the act under consideration. These two cases, it is contended, do not lay down that if there are two alternative procedures provided, any uncontrolled discretion given to the executive authority to select either of the two procedures cannot be violative of Art. 14 of the Constitution. (31) Reliance was placed on the case of Dwarka Prasad Laxmi Narain v. State of U. P., AIR 1954 SC 224 , wherein the provisions of the U. P. Coal Control Order were declared ultra vires. Under the Coal Control Order, no person was entitled to sell or store for sale or otherwise dispose of coal except under a licence. Clause 4 (3) of the Coal Control Order provided that the licensing authority may grant, refuse to grant, renew or refuse to renew a licence and may suspend, cancel, revoke or modify any licence or any terms thereof granted by him under the Order for reasons to be recorded. The phrase. Clause 4 (3) of the Coal Control Order provided that the licensing authority may grant, refuse to grant, renew or refuse to renew a licence and may suspend, cancel, revoke or modify any licence or any terms thereof granted by him under the Order for reasons to be recorded. The phrase. "reasonable restriction" connotes that the limi­tation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature beyond what is required in the interest of the pub­lic. Legislation, which arbitrarily or excessively in­vades the right, cannot be said to contain the qua­lity of reasonableness, and unless it strikes a proper balance between the freedom guaranteed under Art. 19 (1) (g) and the social control permitted by clause (6) of Art. 19, it must be held to be wanting in reasonableness." (32) This case dealt with the question of the ambit and scope of Art. 19 (1) (g) and clause (6) and the question of Art. 14 was not examined in this case. Next, reliance was placed on the case of Saghir Ahmed v. State of U. P., AIR 1954 SC 728 . In this case the validity of the U. P. Road Trans­port Act was challenged. Reliance was placed on the following passage at page 741 of the report : "The other contention of Mr. Pathak in regard to Art. 14 though somewhat plausible at first sight does not appear to us to be sound. Section S of the Act authorises the State Government to declare that the road transport service in general or on parti­cular routes should be run and operated by the State Government exclusively or by the State Government in conjunction with railway or partly by the State Government and partly by others in ac­cordance with the provisions of the Act. The whole question is how is the last part of the section to be implemented and carried out? If the State can choose any and every person it likes for the pur­pose of being associated with the transport service and there are no rules to guide its discretion, plain­ly the provision would offend against Art. 14 of the Constitution." (33) In that case however, it was held that the discretion to be exercised by the State was regulat­ed discretion guided by statutory rules. In the case of Pannalal Binjraj v. Union of India, (S) AIR j'1957 SC 397, the question was considered under what circumstances the law giving 'discretion to an executive body can be struck down as violative of Art. 14 of the Constitution. The validity of S. 5 (7A) of the Income-tax Act was up for decision. Section 5 (7A) gives power to the Commissioner of Income-tax to transfer any case from Income-tax Officer sub­ordinate to him, to another, and the Central Board of Revenue has been given power to transfer any case from one Income-tax Officer to another. Such a transfer can be made at any stage of the proceed­ing and shall not render necessary the reissuing of a notice already issued by the Income-tax Officer from whom the case is transferred. The validity was attacked on the ground that S. 5 (7A) invests the Commissioner and the Central-Board of Revenue with the naked and arbitrary power to transfer any case from one Income-tax Officer to another without any limitation in point of time, a power which is unguided and uncontrolled and is discriminatory in its very nature. It was open to the Commissioner to pick out the case of one assessee from those of others in a like situation and transfer the case from one State to the other or from one end of the Union to the other without specifying the area and without giving any reason thus subjecting the particular assessee to discrimi­natory treatment whereas the other assessees similar­ly situated with him would continue to be assessed at the place where they reside or carry on business under S. 64 (1) and (2) of the Act. The discrimination involved in S. 5 (7A) is sub­stantial in character and therefore infringes the fun­damental right enshrined in Art. 14, and it also infringes Art. 19 (1) (g) in so far as it imposes an unreasonable restriction on the fundamental right to carry on trade or business. The discrimination involved in S. 5 (7A) is sub­stantial in character and therefore infringes the fun­damental right enshrined in Art. 14, and it also infringes Art. 19 (1) (g) in so far as it imposes an unreasonable restriction on the fundamental right to carry on trade or business. It was held in that case that there was no fundamental right in an assessee to be assessed in a particular area or locality, and the difference if any created in the position of the assessee and others who continue to be assessed by the Income-tax Officer in the area in which they reside or carry on business is not material difference but a minor deviation from the general standard and would therefore, not amount to the denial of equal rights. The law has been laid down at page 410 of the report as follows : "There is a broad distinction between discre­tion which has to be exercised with regard to a fundamental right guaranteed by the Constitution and some other right which is given by the statute. If the statute deals with a right which is not funda­mental in character the statute can take it away but a fundamental right the statute cannot take away. Where, for example, a discretion is given in the mat­ter of issuing licences for carrying on trade, pro­fession or business or where restrictions are imposed on freedom of speech, etc. by the imposition of censorship, the discretion must be controlled by clear rules so as to come within the category of reasonable restrictions. Discretion of that nature must differentiate from discretion in respect of mat­ters not involving fundamental rights such as trans­fer of cases.........In other words the discretion vested has to be looked at from two points of view, viz., (1) does it admit of the possibility of any real and substantial discrimination, and (2) does it in­fringe on a fundamental right guaranteed by the Constitution? Article 14 can be invoked only when both these conditions are satisfied." (34) Applying the two tests laid down in the above case, the counsel for the petitioner contends that there is a possibility of a real and substantial discrimination m the present case inasmuch as the procedure provided under S. 46 (5A) is much more stringent than the one provided under S. 46 (2). It also impinges upon fundamental right guaranteed under Art. 19 (1) (f) of the Constitution. It also impinges upon fundamental right guaranteed under Art. 19 (1) (f) of the Constitution. Section 46 (2) only gives power to the Income-tax Officer to forward to the Collector a certificate specifying the amount of arrears due and thereupon the Col­lector has to proceed to recover the amount speci­fied therein as if it were an arrear of land revenue. If the Collector proceeds under the Land Revenue Act, the regular procedure for attachment is to be follow­ed, opportunity is given to the assessee to file ob­jections and the order passed by the Collector may be appealable to the proper authority. But S. 46 (5A) gives power to the Income-tax Officer not only to require a person from whom money is due but from whom money may become due, to the assessee to pay up the amount to the Department. Such a power will effect the trade and business of the assessee and is also not examinable by any superior authority. There is, therefore, possibility of substantial discrimination. Section 46 (5A) provides another mode of recovery of tax. If the tax has been validly imposed, there was a liability to pay up the tax. If the debtors of the assessee are directed to pay up the tax dues they are only asked to discharge the liability of the assessee whether the liability is discharged by at­tachment or other modes of recovery provided under the Land Revenue Act or by simply issuing direction to the debtor of the assessee, to pay up the amount of debt due from them, does not to my mind, amount to any substantial discrimina­tion. That in some cases it may result in hardship to the assessee, is no ground for holding the law as substantially discriminatory. Ordinarily, the tax liability should not be recovered by coercive pro­cesses. The coercive processes should be resorted to when all other means have been exhausted. But it cannot be said that the law on that account results in substantial discrimination. The provi­sions of Sec. 46 (5A) have already been quoted in extenso, and if no amount is due to the assessee, the debtor is not bound to pay anything. The coercive processes should be resorted to when all other means have been exhausted. But it cannot be said that the law on that account results in substantial discrimination. The provi­sions of Sec. 46 (5A) have already been quoted in extenso, and if no amount is due to the assessee, the debtor is not bound to pay anything. If no payment is made by the debtor under the notice further proceedings are to be taken by and before the Collector on the footing that the Income-tax Officer's notice has the same effect as an attachment of the Collector .in the exercise of his powers^ under the proviso to sub-sec. (2) of Sec. 46. There is, therefore, no substantial discrimination. I have already dealt with the question as to how far Sec. 46 (5A) can be said to be violative of Art. 19 and in the view which I have taken on that question, it cannot be said that the discretion given under Sec. 46(5A) impinges upon the fundamental right guaranteed by the Constitution. Where a discretion is given in the matter of grant­ing or refusing a licence such a discretion affects the fundamental right, but where a discretion has been given in the matter of applying one or the; other method of recovery of tax liability, the dis­cretion cannot be said to impinge upon any fundamental right. I am, therefore, of opinion that sec­tion 46 (5A) does not violate the protection grant­ed under Articles 14, 19 and 31 of the Constitu­tion. (35) The last point raised was with regard to limitation. It was said that the order of the Cen­tral Board of Revenue under Sec. 34 (IB) was pass­ed on the 31st January, 1956. The notice of demand was given on the 10th of February, 1956-The order under Sec. 46(5A) was passed on the 16th March, 1959. This order was thus clearly beyond one year of the last day of the financial year in which the notice of demand was given. The notice of demand was given on the 10th of February, 1956-The order under Sec. 46(5A) was passed on the 16th March, 1959. This order was thus clearly beyond one year of the last day of the financial year in which the notice of demand was given. The contention raised by the petitioner is that the proceedings for recovery of the amount could not have been initiated beyond one year from the last day of the financial year in which the notice of demand was given, or at any rate within one-year of the 30th September, 1957 inasmuch as the instalment due on that date was not paid in time and the whole amount became immediately due. In the present case the default clause was taken advantage of by the Department when it passed the order on the 17th May, 1958 (Annexure N to the petition) to the effect that a sum of Rs. 5,32,000/- became payable forthwith with interest thereon from 30th September, as the instalment due on the 30th September, 1957 was paid on the 4th November, 1957, and the assessee was thus liable to pay interest of Rs. 2600/- on the afore­said amount. (35a) Section 46 (7) reads as follows: "Save in accordance with the provisions of sub-sec. (1) of Sec. 42 or of the proviso to Sec. 45, no proceedings for the recovery of any sum pay­able under this Act shall be commenced after the expiration of one year from the last day of the financial year in which any demand is made under this Act : Provided that the period of one year herein referred to shall (i) where an assessee has been treated as not in default under Sec. 45 as long as his appeal is undisposed of be reckoned from the date on which the appeal is disposed of; (ii) where recovery proceedings in any case have been stayed by any order of a Court, be reckoned from the date from which the order is withdrawn; (iii) where the date of payment of tax has been extended by an income-tax authority, be re­ckoned from the date*up to which the order is-withdrawn; (iv) where the sum payable is allowed to be paid by instalments, from the date on which the last of such instalments was due." (36) It is very difficult to accept the argument of the petitioner's counsel -in this behalf. The opening clause of sub-sec. (7) only lays down that the proceedings cannot be commenced after the expiration of one year from the last day of the financial year in which any demand is made. If the argument raised in connection with the notice of demand by the petitioner is accepted that no demand notice under Sec. 29 could be issued in regard to the liability under Sec. 34 (IB), the open­ing clause of sub-sec. (7) is not attracted and the question of the proviso does not arise. It is however conceded that sub-sec. (7) of Sec. 46 is attracted inasmuch as the words in the opening clause are not "a notice of demand under Sec. 29", but "when any demand is made". The question, therefore, which arises for con­sideration is whether the proviso (iv) applies to .the present case. When the sum is payable and is allowed to be paid in instalment the period of one year is to be counted from the date, when the last instalment was due. It is contended by the Advocate General that the last instalment was due in this case on the 25th March, 1958 and if that is the starting point of limitation the present order was well within time. The contention of the counsel for the petitioner is that the proviso is attracted only where there is no default clause, and secondly it is urged that the entire amount became due by virtue of the default clause on the 30th September, 1957 including the last instal­ment. Therefore, the last instalment was due on the 30th September, 1957 within the meaning of pro­viso (iv) to Section 46(7). A number of authorities were cited by the counsel for both sides. Refer­ence was made by the Advocate General to the case of Lasa Din v. Gulab Kunwar, reported in AIR 1932 PC 207. 'The counsel for the petitioner on the contrary relied upon the case of Lalta Prasad v. Gajadhar Shukul, reported in AIR 1933 All 235. The Privy Council was considering the case of a suit upon a mortgage under Article 132 of the Limitation Act. But the other case which is relied upon by the petitioner was a case under Art. 75 of the Limitation Act. It is not necessary to examine those cases in detail. The Privy Council was considering the case of a suit upon a mortgage under Article 132 of the Limitation Act. But the other case which is relied upon by the petitioner was a case under Art. 75 of the Limitation Act. It is not necessary to examine those cases in detail. The answer to the question depends main­ly on the interpretation of Sec. 46 (7) (iv) of the Act. The words used in Sec. 46 (7) proviso (iv) are not "when the last instalment becomes due", i but when the "instalment was due". When the j amount is payable by instalment, it could not be | said that if there has been a default in payment of any of the instalments the Department could take ; proceedings for recovery of the entire amount under Chapter VI. On a plain reading of Sec. 46(7) proviso (iv), I am of opinion that it was attracted in this case. The sum was allowed to be paid in instal­ments and consequently the period of one year was to commence from the date when the amount of the last instalment was due, that is the 25th March, 1958. Any right which might have accru­ed to the Department to enforce the default clause being a term of the contract is not relevant in interpreting the provisions of Sec. 46 (7) of the Act. (37) The Advocate General has further relied upon the proviso (iii) of Sec. 46 (7) in support of the contention that the proceedings are not barred by limitation. His contention was that the date of payment of the tax had been extended from time to time, and, as such, the period of one year was to be reckoned from the date from which the time for payment was extended. But as I am of opinion that the recovery proceedings are not bar­red, in view of proviso (iv) it is not necessary to examine this question. (38) In the result, therefore, we see no force in this petition and it is rejected with cost which we assess to Rs. 300/-. (39) C. P. SINHA, C. J. : I agree. Petition rejected.