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Issues Involved:
1. Jurisdiction of the High Court to issue writs. 2. Validity of proceedings initiated by the Income-tax Officer under section 34 of the Income-tax Act. 3. Compliance with Article 14 of the Constitution regarding equality before the law. Issue-wise Detailed Analysis: 1. Jurisdiction of the High Court to Issue Writs: The preliminary objection raised by the respondents was that the High Court of Allahabad was not competent to issue writs against the Income-tax Investigation Commission, the Government of India, and the Central Board of Revenue, all situated outside its jurisdiction. This objection was based on precedents from the Supreme Court and a five-judge bench of the Allahabad High Court. The court upheld this objection, agreeing that it could not issue writs against these entities. Consequently, the petitioners' counsel focused arguments solely on the writs against the Income-tax Officer, Kanpur. 2. Validity of Proceedings Initiated by the Income-tax Officer under Section 34 of the Income-tax Act: The notices issued by the Income-tax Officer on 21st July 1952 were in compliance with the directions of the Government of India dated 7th June 1952, under section 8(2) of the Taxation on Income (Investigation Commission) Act. The court noted that since the Income-tax Officer acted on the directions of the Central Government, he could not have exercised independent discretion under section 34 of the Income-tax Act. Therefore, the proceedings were considered as initiated under section 8 of the Taxation on Income (Investigation Commission) Act. 3. Compliance with Article 14 of the Constitution Regarding Equality Before the Law: The court examined whether the proceedings under section 8 of the Taxation on Income (Investigation Commission) Act violated Article 14 of the Constitution, which guarantees equality before the law. The court noted that the procedure under the Taxation on Income (Investigation Commission) Act limited the rights of the assessee compared to the procedure under section 34 of the Income-tax Act. The petitioners were subject to a different and more restrictive procedure, which included finality of the Commission's findings, limited rights of appeal, and reduced procedural safeguards. The court referred to the Supreme Court's decision in Shree Meenakshi Mills Ltd., which held that different procedures for similarly situated individuals violated Article 14. Since the petitioners could be dealt with under the amended section 34 of the Income-tax Act, the court found that the proceedings under the Taxation on Income (Investigation Commission) Act resulted in unequal treatment and thus violated Article 14. Conclusion: The court issued a writ prohibiting the Income-tax Officer, Kanpur, from proceeding further with the cases initiated on the basis of the notices dated 21st July 1952. The court also awarded costs to the petitioners, to be paid by the Government of India, Ministry of Finance (Revenue Division), which was the prime mover of the proceedings. The costs were assessed at Rs. 500.
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