G.M. Mir, J.
1. This is a petition under Article 226 of the Constitution of India read with Section 103 of the J & K State Constitution for the issuance of a writ of certiorari or any other writ, order or direction, quashing the order of respondent No. 1 and for declaring Section 140A(3) of the I.T. Act, 1961, as ultra vires the Constitution.
2. It has been alleged that the petitioner filed the requisite return of income-tax for the years 1972-73 and the income-tax assessed on the basis of that return was more than Rs. 500. The petitioner deposited the income-tax within 30 days from the date of the filing of the return. But the petitioner failed to deposit the tax within the time given and because of this the ITO proceeded to penalise the petitioner under Section 140A(3) of the I.T. Act, vide his show-cause notice No : Penl. /73-74, etc. He imposed a penalty of Rs. 110 on the petitioner.
3. It has been urged in this petition that Section 140A(3) of the I.T. Act of 1961 was ultra vires Article 19 of the Constitution of India as the power to levy the penalty for non-payment of tax was confiscatory in nature and as such violative of Article 19 of the Constitution. Moreover, the power to levy penalty for non-payment of tax which had become payable was neither incidental nor ancillary to the power to tax income and, therefore, Section 140A(3) of the Act was beyond the legislative competence of Parliament. It has been, therefore, prayed that Section 140A(3) of the I.T. Act, 1961, may be declared void and the respondents directed not to recover any penalty from the petitioner.
4. In the reply-affidavit respondent No. 1 has stated that the petition was misconceived and would not lie. It has been averred that Section 140A(3) of the I.T. Act was not ultra vires of Article 19 of the Constitution of India as the penalty was to be levied only in cases of breach of statutory obligations to be performed within the prescribed period and was not a confiscatory provision either. It has been next stated in the reply-affidavit that the power to levy penalty was certainly an incidental and ancillary power of the taxing authority and this power was within the legislative competence of Parliament.
5. I have heard learned counsel for the parties at length.
6. Learned counsel for the petitioner has referred me to a case decided by the Madras High Court in A.M. Sali Maricar v. ITO : 90ITR116(Mad) . In that judgment, it has been held that Section 140A(3) was ultra vires the Constitution, After the judgment of the Madras High Court, Parliament made certain amendments in Section 140A(3). It has been argued by the learned counsel for the petitioner that the reasoning given in the judgment of the Madras High Court was sound, legal and, therefore, must be followed by this court in disposing of this case.
7. On the other hand, the learned counsel for respondent No. 1 has referred the court to a Division Bench judgment of the Andhra Pradesh High Court in Kashi Ram v. ITO : 107ITR825(AP) . I have perused this judgment also. In this judgment the Andhra Pradesh High Court has at great length dealt with the above-referred judgment of the Madras High Court. The Andhra Pradesh High Court has come to the conclusion that it was not possible to agree with the conclusions arrived at in the judgment of the High Court at Madras. In the Andhra Pradesh case also, the petitioner had challenged the constitutional validity of Section 140A(3) of the I.T. Act, 1961, empowering the levy of penalty for non-payment of the self-assessment tax. The court held that Section 140A which provides for the payment of self-assessment tax was one of the modes of collection of tax devised by Parliament in exercise of its power of taxation. It was further held that every person earning an income on which tax had to be paid has to pay the tax. The section was only a measure enacted for ensuring compliance with provisions for payment of income-tax.
8. From a reading of the section itself, it appears that the discretion is conferred on the ITO in the matter of levying penalty. It is apparent from the section itself that normally an assessee was expected to pay the tax within 30 days of the filing of the return. But in certain situations the assessing authority had been permitted not to impose any penalty if the assessing authority was satisfied that reasons for not levying penalty did exist in a particular case. Further, an appeal and a second appealwere also provided against the orders of the assessing authority and, further, a reference to the High Court was also provided.
9. The argument advanced by the learned counsel for the petitioner that the levy of penalty should be restricted only to cases of concealment of income or evasion of tax has no force in it. In my view, Section 140A(3) was not confiscatory as what is due towards the tax cannot be said to be a property of the assessee since it was a debt due to the State. It could hardly, therefore, be said that Section 140A(3) infringes in any manner whatsoever Article 19(1)(f) of the Constitution of India.
10. It is well settled that where the constitutionality of a certain provision of law or an Act was taken as a ground, the initial presumption should be that the relevant provision of law or the Act was constitutional. It is for the challenger to make out a clear case of excess of jurisdiction, the burden is a very heavy one. The section itself is very clear. It is not obnoxious. It gives time for payment of arrears. After all when once a person is assessed to tax he must and should pay the same within the time given. In a way, by non-payment of tax assessed, the assessee may be said to be misappropriating the money that belonged to the State. The argument of the learned counsel for the petitioner, that non-payment of income-tax was only a civil liability and if the assessee fails to pay the tax assessed he should be proceeded against for its recovery in a civil court, could not be entertained as those assessees who had to pay large amounts of tax may evade to make the payment and use the money of tax in business and earn much more than the interest they would be asked to pay to the State, thus depriving the State the benefits of the tax money which it would have derived had the assessee deposited the arrears in full. Moreover, in C. A. Abraham v. ITO : 41ITR425(SC) , the Supreme Court has come to the conclusion that the penalty in such matters was only an additional tax and nothing more.
11. It is conceded that Parliament has the power to levy taxes. When Parliament has the power to levy a tax it has the power to enact that if the tax was not paid a certain amount could be recovered as penalty as otherwise the power to levy tax would become redundant without the power to impose penalty in case of non-payment. The matter falls within entry No. 82, which applies to this State.
12. On having considered the arguments and after having gone through the above-referred to judgments, I am of the view that there is no force in this writ petition, which is, accordingly, dismissed but no order as to costs is made.