1. The petition was argued by the petitioner in person with considerable ability and learning. He prayed in the petition that this court should issue an order or direction to the respondent, the Commissioner of Income-tax, Madras, to refund the sum of Rs. 100 paid by the petitioner as fee under Section 33(3), Income-tax Act, and to declare under Article 226 of the Constitution of India that the portion of Section 33 (3) relating to payment of fee is illegal.
2. In the affidavit in support of the petition It was stated that the petitioner was assessed to income-tax in respect of his personal income by the Second Additional Income-tax Officer, Salaries Circle, Madras, on the dividend warrants received by him from agricultural companies. He preferred an appeal against that assessment to the Appellate Assistant Commissioner of Income-tax who how- ever confirmed the decision of the Income-tax Officer. There was a further appeal to the Income-tax Appellate Tribunal. As required by Sub-section (3) of Section 33, Income-tax Act he paid the required fee of Rs. 100 as a condition for preferring the appeal to the Appellate Tribunal. The Appellate Tribunal allowed the appeal upholding the contention of the petitioner that the dividends received by the assessee share-holder were not liable to tax. He requested the Tribunal to award him costs as he was successful, or in any event, to refund the fee paid by him, namely, the sum of Rs. 100, as the appeal terminated in his favour, The Tribunal, as is obvious, has no jurisdiction to award costs, as there is no provision in the Income-tax Act to award costs. It could not even direct the refund of the fee paid, as there is no power.
Thereafter the petitioner wrote a letter to the Commissioner of Income-tax, Madras, requesting him to direct refund of the fee actually paid by him. In that letter he pointed out the circumstances under which he deposited the sum of Rs. 100 and also the fact that the appeal had ended in his favour. In that letter he added:
"I am sure you will agree that a principle of some importance is involved here. To my mind it is a matter of elementary justice that a party, out to expenditure by reason of a decision, adjudged to be wrong by a lawfully constituted authority, be paid back his costs. In all civil proceedings this is ordinarily done, no exception being made in favour of Government or any department of Government."
To this letter there was no reply from the Commissioner of Income-tax. He thereafter filed this application under Article 226 of the Constitution.
3. Though in the affidavit filed in support of the petition, the petitioner impugned Section 33 (3) as being illegal and void as it contravened Article 14 of the Constitution of India, in the arguments he raised the further contention that the Central Legislature when it enacted the section had no power to levy the fee. The section was enacted, it may be remembered when the Government of India Act, 1935 was in force. The contentions raised before us therefore were two-fold: (1) that the impugned section was 'ultra vires' the Legislature under the Government of India Act, 1935, and (2) that in any event, it was opposed to the principle of equality before law and equal protection of laws guaranteed to a person under Article 14 of the Constitution.
4. Section 33, Income-tax Act was introduced by the Amending Act, 1939, under which the Income-tax Appellate Tribunal was for the first time constituted. The Appellate Tribunal is to consist of as many persons as the Central GOVernment thinks fit to appoint to exercise the functions conferred upon the Appellate Tribunal by the Act. The Appellate Tribunal should consist of judicial members and accountant members as denned by the Act. Under Section 33, an appeal is provided for against an order of an Appellate Assistant Commissioner under Section 28 or Section 31, and it should be preferred within 60 days from the date on which the order is communicated to the assessee.
Under sub-section (2) of that section the Commissioner of Income-tax is also given the right of preferring an appeal against an order of the Appellate Assistant Commissioner under Section 31 within 60 days from the date on which the order is communicated to the Commissioner by the Appellate Assistant Commissioner. He is, however not required to make any deposit as a condition precedent for the filing of an appeal, but in the case of an assessee under Sub-section (3) of the section it is required that the appeal should be preferred in the prescribed form and verified in the prescribed manner and shall except in the case of an appeal referred to in Sub-section (2) that is, an appeal by the Commissioner be accompanied by a fee of Rs. 100.
5. The argument that the said section is 'ultra vires' the Legislature under the Government of India Act, 1935, is founded on the language of item 59 in List I in the Federal Legislative List in the Seventh Schedule to the Act. It confers authority on the Dominion Legislature to legislate "fees in respect of any of the matters in this List, but not including fees taken in any court." Under item 54 of the said List it was empowered to legislate with reference to taxes on income other than agricultural income. It would therefore have power to enact the provision relating to fees in respect of an Income-tax unless it be that the power is excluded by the latter part of item 59 under which the power to enact laws relating to fees leviable in any court is excluded from the List. That exception would apply, if the section requiring fee to be paid when an appeal to the Appellate Tribunal is preferred is "fee taken in any court". In other words, can an Appellate Tribunal constituted under the Income-tax Act be considered a Court? If it is a Court, undoubtedly the Federal Legislature would not have the power to enact the impugned Sub-section (3) of Section 33. If it is not a Court, the Federal Legislature would have undoubted power. The argument therefore stressed before us was that the Appellate Tribunal constituted under the Income-tax Act was a "Court".
6. The point for consideration therefore is whether the Appellate Tribunal can be aptly described as a Court. It is somewhat curious that notwithstanding the long lapse of time when the Courts were established in all civilised countries, there is no precise definition of the word "court". Historically, the right to establish a court vested in the Sovereign, whose duty it was considered
"was to exercise judicial power to decide disputes between its subjects or between itself and its subjects whether the rights related to life, liberty or property."
The power to establish Courts under the Constitution and under the Government of India Act was vested in the Legislature, which exercised the Sovereign power. A definition of "judicial power" is to be found in -- 'Huddart Parker and Co. v. Moorehead', 8 Com-w LR 330 at p. 357 (A) approved by the Judicial Committee in -- 'Shell Co. of Australia v. Federal Commissioner of Taxation', 1931 AC 275 at pp. 295, 296, 297 (B). As pointed out therein the exercise of this judicial power does not begin until some Tribunal which has power to give a binding and authoritative decision is established and is called upon to take action.
A definition of Court is to be found in Stroud's Judicial Dictionary in which it is stated that "a Court is a place where justice is judicially administered". The difficulty at the present juncture is created on account of the establishments of administrative Tribunals, which are vested with jurisdiction to decide certain matters of a quasi judicial nature. It is often a very difficult task to draw the line, and distinguish a Court from an administrative tribunal exercising quasi judicial functions. Merely because the administrative Tribunals have the trappings of a Court, they are not courts in the sense of exercising judicial power (vide 8 Halsbury's Laws of England, 2nd Edn., p. 526 and -- '(1931) AC 275 at p. 297 (B)' (1) A Tribunal is not necessarily a court in the strict sense because it gives a final decision (2) nor because it hears witnesses on oath (3) nor because two or more contending parties appear before it between whom It has to decide (4) nor because it gives decisions which affect the rights of subjects (5) nor because there is an appeal to a Court, (6) nor because it Js a body to which a matter is referred by another body: -- '1931 AC 275 (B)'.
7. 'Shell's case', 1931 AC 275 (B) was concerned with the interpretation of the Constitution of Australia. Under Section 71 of the Constitution a restriction was imposed on the Legislative power of the Parliament that it should vest the judicial power of the Commonwealth only in a Federal Supreme Court and other Federal Courts which the Parliament creates. The Judges of such courts could be appointed only for life and not for a term. Under the Income-tax Assessment Act, 1932, a Board of appeal was established to hear appeals, against the assessment, orders, but the members were appointed for a term of seven years. The High Court of Australia decided that since the Judicial power of the commonwealth could only be vested in Courts, i.e., Court of law in the strict sense if any such court be created by Parliament the tenure of office of such judges by whatever designation they may be called should only be for life subject, however, to the power of removal under Section 72. Thereafter in 1925, the Income-tax Act was amended and a Board of Review was substituted for the Board of Appeal. Under the Act of 1925, Sec. 50, option was given to the tax payer who was dissatisfied with the decision of the Commissioner to request him (a) to refer the decision to a Board of Review or (b) to treat his objection as an appeal and to forward it either to the High Court or the Supreme Court of the State.
8. The Judicial Committee decided that the decisions of the Board of Review were in the nature of Administrative awards, and that its functions were not strictly Judicial. It was not vested with any judicial power and it was not a judicial tribunal or Court. The members of the Board of Review could therefore be appointed for a term.
9. This decision does not help the petitioner for it establishes that unless judicial power is vested, a tribunal does not become a judicial tribunal or Court, and that by the mere fact that a tribunal is clothed with some of the judicial functions it does not attain the status of a Court. The decisions of Courts are arrived at usually by the application of objective standards which are fixed, i.e., in accordance with the principles of procedure and the mode of taking evidence in the manner laid down by the Evidence Act. No fixed standards are laid down in the case of administrative authorities, and very often they are not bound to observe the judicial procedure, though on the principles pi natural justice they must conform to a certain extent to the forms of judicial procedure. It is very often a difficult question to decide whether an administrative tribunal or authority is acting quasi judicially or merely discharging its functions in its administrative capacity.
10. Whatever may be the precise definition of a Court it is not difficult to reach the conclusion that the Income-tax Appellate Tribunal as constituted under the Income-tax Act is not a "court". Its proceedings are not public--vide Section 54. It has no doubt to decide about the legality or otherwise of the determination of the assessments made by the Income-tax Department, but in that event, as an appeal is merely a continuation of an original proceeding, it does not acquire any higher judicial status to equate it to a Court, notwithstanding the fact that it is a tribunal independent of the Commissioner of Income-tax. Under Section 37, Income-tax Act it is no doubt true that the authorities therein referred to including the Income-tax Officer, and the Appellate Tribunal were vested for the purpose of that Chapter with the same powers as are vested in a Court under the Civil Procedure Code, 1908, when trying a suit in respect of the following matters, namely, (a) enforcing the attendance of any person and examining him on oath or affirmation (b) compelling the production of documents and (c) issuing commissions for the examination of witnesses, and the proceeding is deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purposes of Section 196, I. P. C. But this section has not the effect of converting an Appellate Tribunal by reason of its exercising some of the powers exercisable by a court under Civil P. C. into a court.
The Income-tax Officer is not bound to conduct an enquiry relating to assessment in the manner in which a suit is tried in a court of law. He is not prevented from importing his personal knowledge and information otherwise obtained by him in reaching a decision. It is no doubt true that the Income-tax Officer and the Tribunal are empowered to examine witnesses on oath; but they are not bound to conduct the enquiry before them in the same manner as is done in a court. Reference was made also to Section 67 of the Income-tax Act which precludes the jurisdiction of a civil court to set aside or modify any assessment made under the Act and also conferring immunity from prosecution, suit or other proceeding to officers of the Government acting in good faith in carrying out the provisions of the Act. Neither the finality of the decision of the tribunal subject to the provisions of Section 66 of the Act nor the immunity granted by Section 67 would make the tribunal "court" as it is commonly understood.
11. The decisions under the Income-tax Act 2 of 1886 to which reference was made in the course of the arguments before us have no bearing as the scheme of the present Act is altogether different from the scheme of the Act of 1886. It is therefore needless to refer to them in detail. An Interesting discussion on the question as to what distinguishes a court from a tribunal or authority exercising quasi-judicial functions is to be found in volume 8 of Halsbury's Laws of England, Lord Hailsham's Edn. at pages 525 and 526.
12. For these reasons we are unable to agree with the contention of the petitioner that the Appellate Tribunal is a "court". It follows from this conclusion that the Central Legislature had power to levy a fee as a condition for preferring an appeal to the Appellate Tribunal under Section 33(3), Income-tax Act.
13. The next contention that this sub-section offends Article 14 of the Constitution need not detain us long. It is said that Section 33, Income-tax Act introduces a discrimination, in that while it requires an assessee to pay a fee for filing an appeal to the Tribunal no such condition is imposed when the Commissioner has to file an appeal, and this, it is stated, is opposed to the principle of equality before law and equal protection of laws guaranteed to a person under Article 14 of the Constitution. This article which is modelled on the lines of the American Constitution has been the subject matter of several decisions of the Supreme Court of the United States, and also after the Constitution came into force by the Supreme Court of our country. It is needless to refer to all the decisions which laid down the principles. As pointed out by Jennings, "Equality before the law means that among equals the law should be equal and should be equally administered, that like should be treated alike". Class legislation discriminating against some and favouring others is prohibited; but legislation which in carrying out a public purpose is limited in its application is not prohibited if within the sphere of its operation it affects alike all persons similarly situated. See -- 'Power Mfg. Co. v. Saunders', (1927)
274. US 490 (C).
But a classification if reasonable and is not arbitrary and is reasonably related to the object or the purpose for which the classification is introduced is not prohibited. Law in the ordinary sense is not confined merely to the substantive law but includes also the procedural law. The classification on which the Income-tax Act proceeds is the classification into persons who are liable to pay income-tax ox assessees and those who are outside it. This law is intended therefore to apply to assessees, who are subjected to income-tax. The classification has a reasonable basis and has a reasonable connection to the purpose for which the legislation was enacted. The Commissioner of Income-tax is really a representative of the Government, and he is not one of the assessees. The law does not introduce any invidious distinction between one set of assessees and another set of assessees. But the distinction is between the assessees and the Commissioner.
14. The word "person" in Article 14 includes not only human beings but also juristic persons such as corporations. Whether a State when it carries on a trade or business like a private person, to that extent it may be treated as a person within the meaning of the Article does not arise for consideration now, and we express no opinion on that question. The State when it levies income-tax is not acting like a private person, but is exercising its sovereign function, and therefore the State represented by the Commissioner cannot be taken for the purpose of comparison in order to see whether there is equality before the law. Even if the view of some of the Judges in -- 'Motilal v. Govt. of the State of Uttar Pradesh', (D), were correct as we are concerned in this case with the sovereign function of a State of levying a tax that function cannot be treated as a private function of the State which constitutes it a person within the meaning of Article
14. We therefore hold that Section 33(3), Income-tax Act does not offend Article 14 of the Constitution.
15. It is unnecessary to consider the further question whether even if we hold that the impugned section is 'ultra vires' we should give relief to the petitioner in this case by issuing a direction to the Commissioner; the petition fails on other grounds. We think, however, that this is not a case in which we should award costs to the respondent. No doubt it is somewhat inequitable that for a wrong committed by the Department which had to be corrected by a superior authority a citizen should be called upon to pay a fee. That is no doubt a real grievance of the petitioner but we do not think that on that ground we can give him any relief. The petitioner agitated the question only for the benefit of the public and not to vindicate his private right.
16. The petition is dismissed but without costs.
17. Petition dismissed.