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TMI Blog2006 (12) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the culpable mental state of the accused, the entire basis of accusatorial jurisprudence, as accepted and recognised in India, has been shifted. The petitioners contend that while having to defend a wholly baseless and vexatious criminal proceedings, they are also expected to discharge the burden of not possessing the criminal intent and proving it beyond reasonable doubt. According to the petitioners, the impugned provision violates Article 21 of the Constitution of India and their right to pray for discharge from the criminal proceedings has been negated merely on the basis of the impugned provision. According to the petitioners, the guarantee against self-incrimination protected by Article 20(3) of the Constitution has also been taken away from them. 3. The following grounds are raised by the petitioners : (1) The procedure established by law must be just, fair and reasonable and not arbitrary, fanciful or oppressive. By shifting the burden of proving absence of culpable mental state on to the accused and requiring the same to be established beyond reasonable doubt, the rights guaranteed by the Constitution under Article 21 are violated. (2) The impugned provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislation. (10) The impugned provision is susceptible to rampant misuse and a policy of "pick and choose" by the prosecution. (11) The impugned provision is excessive since it applies to all offences under the Act, whereas the Statement of Objects and Reasons shows that it was intended to apply only to cases of evasion of tax. (12) The impugned provision offends the constitutionally guaranteed protection against self-incrimination. (13) The impugned provision also has the effect of rendering statutory remedies available to the accused illusory. (14) One cannot label a statute as one dealing with a grave social evil and from that, to infer strict liability - vide Lim Chin Aik v. Queen [1963 AC 160 (PC) ; that Courts should be slow to infer that Parliament intended to impose an onerous duty on the accused vide R. v. Hunt [1987 1 All ER 1 (HL) ; and that the ultimate test of constitutional validity is whether the device undermines the fact finder's responsibility ___ vide County Court Ulster, New York vs. Samuel Allen [1970] 60 L. Ed. 2d. 777. 4. Briefly stated, the facts of the case are as follows : 5. The petitioner in W.P. No.23581 of 2006 (her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same day, the first petitioner filed an application under Section 245 of the Code for discharging her from the prosecution proceedings. Other petitions were also filed. The respondents filed petitions before this Court for a direction to the trial court to frame charges against the petitioners. The petitioners filed application under Section 482 of the Code to quash the proceedings. The petitions filed by the respondents were dismissed by this Court. Against this, the department filed Special Leave Petitions, which were disposed of by the Supreme Court, directing the trial court to consider the matter regarding framing of charge, after hearing the parties on the petition for discharge, within a period of two months. Thereafter, the trial Magistrate dismissed the discharge petitions and fixed the date for commencement of hearing as per the directions of the Supreme Court. The Magistrate directed the accused to be present in Court on August 25, 2006. The first petitioner has filed criminal revisions against the dismissal of the discharge petition and has also filed the present writ petition challenging the constitutional validity of Section 278E of the Act. 7. Mr. Gur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which may indict them at the time of trial and therefore, it offends Article 20(3) of the Constitution. For this purpose, he relied on State of Bombay v. Kathi Kalu Oghad AIR 1961 SC 1808 the Supreme Court held as follows : "In view of these considerations, we have come to the following conclusions :-. . . 'To be a witness' means imparting knowledge in respect of relevant facts by an oral statement or a statement in writing, made or given in Court or otherwise." 12. Learned counsel pointed out that section 4 of the Indian Evidence Act, 1872 defines the word "proved", and for an accused to prove the existence of the exception given under Section 105 of the Act, he is only expected to prove it on a preponderance of probabilities, i.e., it is sufficient if the accused proves the existence of those circumstances as so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that they did exist. To support this Dahyabhali Chhaganbhai Thakker v. State of Gujarat [1964] 7 SCC 361 K.M. Nanavathi v. State of Maharashtra [1962] Supp. 1 SCR 567 were relied on. 13. Learned counsel submitted that there is no wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. Balakrishna Pillai v. State of Kerala [2003] 9 SCC 700 ; Ravula Hariprasada Rao v. State [1951] SCR 322 ; Nathulal v. State of M. P. AIR [1966] SC 43 ; State of Maharashtra v. Mayer Hans George [1965] 35 Comp Cas 557 (SC) ; [1965] 1 SCR 123 ; AIR 1965 SC 722 ; Pyarali K. Tejani v. Mahadeo Ramachandra Dange [1974] 1 SCC 167 ; Dahyabhali Chhaganbhai Thakker v. State of Gujarat [1964] 7 SCC 361 ; AIR 1964 SC 1563 ; State of U.P. vs. Ram Swarup [1974] 4 SCC 764 ; Periasami v. State of Tamil Nadu [1996] 6 SCC 457 ; A. Raghavamma v. A. Chenchamma AIR [1964] SC 136 ; Sucha Singh v. State of Punjab [2001] 4 SCC 375 ; Sanjay Dutt v. State through CBI, Bombay II [1994] 5 SCC 410 ; Uttam Chand v. Income Tax Officer [1982] 133 ITR 909 (SC) ; Asst. CIT v. BELCO Engineers P. Ltd. [1991] 54 Taxman 152 ; Smt. Pushpa Maini v. ITO [1993] (68) Taxman 300 ; Shastri Sales Corporation v. ITO [1996] Crl. L.J. 449 ; ITO v. Inderjit Chopra [1997] 224 ITR 691 (P H) ; Mahadeo Lal Agarwala v. State of Bihar [1997] 224 ITR 119 (Patna) ; G.L. Didwania v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 696 (SC) ; [1984] Supp. 437 ; R.S. Nayak v. A.R. Antulay AIR 1986 SC 2045 ; C. S. D. Swamy v. State [1960] 1 SCR 461 ; Isak Solomon Macmull v. Emperor, AIR1948 Bom 364 ; Gurbachan Singh v. Satpal Singh AIR 1990 SC 209 ; Patel v. Comptroller of Customs [1965] 3 All ER 593 (PC). 15. The relevant decisions will be taken up for discussion hereinafter. 16. Learned counsel for the petitioners also referred to various decisions of Courts of other countries. They are listed hereunder : Woolmington v. Director of Prosecution [1935] AC 462 ; [1935] All ER 1 ; Jayasena v. Reginam [1970] 1 All ER 219 (PC) : R. v. Hunt [1987] 1 All ER 1 (HL) ; County Court Ulster, New York v. Samuel Allen [1970] 60 L. Ed. 2d. 777 Salabiaku v. France [1988] 13 E. H. R. R. 379 ; Mancini v. Director of Public Prosecution [1941] 3 All ER 272 (HL) ; George Morrison v. People of State of California [1933] 78 L. Ed. 664 ; Lim Chin Aik v. Queen [1963] AC 160 (PC) ; He Kaw Teh [1985] 157 CLR 527 ; Rex v. Wamfler [1987] 11 N. S. W. L. R. 541 ; Rex v. Hingi [1996] 3 SCR 1128 ; Jacob Bruhn v. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could prove them, are all matters that must be taken into consideration. 19. In Harbhajan Singh v. State of Punjab [1965] 3 SCR 235 ; AIR 1966 SC 97, the Supreme Court, quoting Viscount Sankey in Woolmington v. Director of Public Prosecutions [1935] AC 462, emphasised the following fundamental doctrine of criminal law that the onus to prove its case lies on the prosecution : "No matter what the charge or where the trial, the principle that the prosecution must prove the guilt of the prisoner is part of the common law of England and no attempt to whittle it down can be entertained." 20. It will be seen that Woolmington's [1935] AC 462 case and the principle laid therein is constantly referred to and reiterated again and again, wherever the question of burden of proof arises. 21. In V.D. Jhingan v. State of Uttar Pradesh [1966] 3 SCC 736; AIR 1966 SC 1762, which arose out of the Prevention of Corruption Act, 1947, it was contended that (page 1763) "... mere receipt of money did not justify the raising of the presumption and that something more than the mere receipt of the money had to be proved." This argument was rejected and it was held that the mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of proving a particular fact may be laid by the law on the accused. It was submitted that by virtue of the impugned Section, prosecution was not required to prove anything. 24. The requirement of mens rea or the mental element in every crime is indisputable, since without a blameworthy mind, there can be no offence. But mens rea can be either clearly or by necessary implication ruled out as a constituent part of a crime and this has been reiterated in many decisions. The following proposition of law as laid down in J.C. Smith and Brian Hogan's Criminal Law, 6th Edition, pg. 31 was referred to by the Supreme Court in R. Balakrishna Pillai v. State of Kerala [2003] 9 SCC 700, "It is a general principle of criminal law that a person may [not] be convicted of a crime unless the prosecution have proved beyond reasonable doubt both (a) that he caused a certain event or that responsibility is to be attributed to him for the existence of a certain state of affairs, which is forbiden by criminal law, and (b) that he had a defined state of mind in relation to the causing of the event or the existence of the state of affairs. The event, or state of affairs, is called t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from which a reasonable inference can be drawn regarding the existence of certain other facts, unless the accused by virtue of special knowledge regarding such facts failed to offer any explanation which might drive the court to draw a different inference. 30. Om Kumar v. UOI [2001] 2 SCC 386 was cited to show that proportionality has been applied to legislative action even from the year 1950. The Supreme Court in that case held as follows : "By 'proportionality' we mean the question whether, while regulating exercise of fundamental rights, the appropriate or least-restrictive choice of measures has been made by the legislature or the administrator so as to achieve the object of the legislation or the purpose of the administrative order, as the case may be. Under the principle, the court will see that the legislature and the administrative authority 'maintain a proper balance between the adverse effects which the legislation or the administrative order may have on the rights, liberties or interests of persons keeping in mind the purpose which they were intended to serve'. The legislature and the administrative authority are, however, given an area of discretion or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een relevant and had been interpreted and applied entirely literally by the French courts, its compatibility with Article 6(2) would surely have been questionable." "An emergency anti-terrorist enactment was held in Heaney v. Ireland [2000] 33 E. H. R. R. 264 to violate the Article 6(1) right of the applicants to remain silent and not incriminate themselves, and also to violate the presumption of innocence guaranteed by Article 6(2) because of the close link, in this context, between it and the rights guaranteed by Article 6(1). The European Court rejected the Irish government's contention that the enactment in question was justified by its security and public order concerns since the enactment extinguished the very essence of the applicants' rights to silence and against self-incrimination. . . . In order to maintain the balance between the individual and the society as a whole, rigid and flexible standards should not be imposed on the legislature's attempts to resolve the difficult and intransigent problems with which society is faced when seeking to deal with serious crime. The court will reach a different conclusion from the legislature only when it is apparent the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through C. B. I. [1980] Supp. SCC 92 ; Stree Atyachar Virodhi Parishad v. Dilip Nathuman Chordia [1989] 1 SCC 715 ; State of Maharashtra v. Dr. Budhikota Subbarao [1993] 2 SCC 567 ; State of Maharashtra v. Som Nath Thapa [1996] 4 SCC 659 ; State of Maharashtra v. Priya Sharan Maharaj [1997] 4 SCC 393 ; Pepsi Foods Ltd. v. Special Judicial Magistrate [1998] 5 SCC 749 ; Umar Abdul Aakoor Sorathi v. Intelligence Officer, Narcotic Control Bureau [2000] 1 SCC 138 ; Kanti Bhadra Shah v. State of West Bengal [2000] 1 SCC 722 ; State of M. P. v. S.B. Johari [2000] 2 SCC 57 ; State of Tamil Nadu v. J. Jayalalitha (2000) 5 SCC 440 ; State of Delhi v. Gyan Devi [2000] 8 SCC 239 ; State of Bihar v. Baidnath Prasad [2002] 1 SCC 465 ; State of Orissa v. Debendra Nath Padhi [2005] 1 SCC 568 ; Maya Rani Punj v. CIT [1986] 157 ITR 330 (SC) [1986] 1 SCC 445 ; Mahant Abhey Dass v. S. Gurdial Singh AIR 1971 SC 834 ; Mohd. Iqbal Ahmad v. State of A. P. [1979] 4 SCC 172 ; Mansukhlal Vithaldas Chauhan v. State of Gujarat [1997] 7 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lore v. Velliappa Textiles Ltd. [2003] 263 ITR 550 (SC) ; [2003] 1 RC 635 ; [2003] 11 SCC 405 Pentapati Venkata Satyanarayana Murthy v. State of A.P. [1999] Crl. L.J. 4190 ; 35. In Standard Chartered Bank vs. Directorate of Enforcement [2006] 130 Comp Cas 341 (SC) ; [2006] 4 SCC 278, in which the constitutionality of the provisions of the Foreign Exchange Regulation Act (FERA) was challenged, the Supreme Court held that in view of the fact that FERA has been included in the IX Schedule, the challenge based on Articles 14 and 21 cannot prevail, but however, on the scheme of the Act, found that the provisions cannot be successfully challenged as being either arbitrary or discriminatory. The Supreme Court bore in mind the object of the Act, which was to protect the economic interest of the country. According to the respondents, this approach would apply here too. 36. In State of Madras v. A. Vaidyanatha Iyer AIR 1958 S.C. 61, the Supreme Court set aside the acquittal order passed by the High Court on the ground that where there is a presumption of law, it is obligatory on the court to raise this presumption, which in that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1973, Section 28B was enacted, which provided that failure to deliver the transit pass obtained in the prescribed manner to the officer in charge of the last checkpost or barrier will give rise to the presumption that the goods carried thereby have been sold within the State. It was held as follows : "In our opinion a statutory provision which creates a rebuttable presumption as regards the proof of a set of circumstances which would make a transaction liable to tax with the object of preventing evasion of the tax cannot be considered as conferring on the authority concerned the power to levy a tax which the legislature cannot otherwise levy. A rebuttable presumption which is clearly a rule of evidence has the effect of shifting the burden of proof and it is hard to see how it is unconstitutional when the person concerned has the opportunity to displace the presumption by leading evidence." 39. An important decision that was cited was Collector of Customs v. Nathella Sampathu Chetty AIR 1962 SC 316, in which it was contended that the rule of evidence casts the burden of proof upon a person from whom specific goods have been seized, to establish that they are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vis-a-vis an administrative action is different from its application in the context of determining the vires of a statute. While determining the validity of a statute, Courts may only ask the question whether there is legislative competence and whether there is any violation of human rights and in the context of violation of Article 14, Courts must look into the reasonableness, as to whether the classification is reasonable and whether there is sufficient nexus to the object that is sought to be achieved. It was open to the Parliament to make the non-filing of a return ipso facto an offence without making mens rea a requirement. But, the Parliament chose to adopt a different standard, a less strict one, stipulating willfulness as a requirement, but raising a presumption and requiring the accused to discharge the burden. In this context, the respondents referred to Devchand Kalyan Tandel v. State of Gujarat [1996] 6 SCC 255 and R. Muthukrishnan v. Agricultural Officer [1999] Crl. L.J. 1252 which is a decision of this Court, wherein it has been held as follows : "Section 10C(2) made it clear that the Parliament made a significant departure from the usual approach by int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so." 47. Section 276CC of the Income Tax Act reads thus : "276CC. Failure to furnish returns of income.- If a person wilfully fails to furnish in due time the return of fringe benefits which he is required to furnish under sub-section (1) of section 115WD or by notice given under sub-section (2) of the said section or section 115WH or the return of total income which he is required to furnish under sub-section (1) of section 139 or by notice given under clause (i) of sub-section (1) of section 142 or section 148 or section 153A, he shall be punishable, __ (i) in a case where the amount of tax, which would have been evaded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt look at the position that prevailed before the Act was amended. Section 29 of the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 introduced several changes in sections 271A, 271B, 272A, 272AA, 272B, 273, 273B, 276A, 276AB, 276B, 276DD and 276E of the 1971 Act. As per the objects of the Act, the amendments were intended to mainly implement certain proposals included in the long term fiscal policy. As per the existing provisions, penalty was leviable under section 270 of the Income Tax Act for failure to furnish information regarding securities, under section 271A for delay in filing return of income without reasonable cause, under section 271B for non-compliance of notice issued under section 143(2) or 142A(1) or 142A(2), under section 271A for failure to maintain books of account, under section 271B for failure to get the accounts audited, under section 272A for failure to answer queries, under section 272AA for failure to comply with the provisions of section 133B, under section 272B for non-compliance of the provisions of section 139A, under section 273(1)(b) for failure to furnish a statement of advance tax, under section 273(2)(b) for failure to furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in the direct tax laws in respect of penalties and prosecution so as to shift the burden of proof on the assessee and to provide that once the evasion of tax is proved, the intention to evade need not be proved by the income tax department." 53. When we see the background within which the legislature decided to enact Section 278E of the Income Tax Act, the attack on its constitutionality loses strength, for as observed in the Sodhi Transport Co.'s case [1986] 2 SCC 486 ; [1986] 62 STC 381 (SC), when the person concerned has the opportunity to rebut the presumption, it is hard to see how the provision is unconstitutional. When the legislature has the power to make a law with respect to any subject, it equally has all the ancillary and incidental powers to make the law effective. In the words of Lord Dunedin in Whitney v. IRC [1925] 10 TC 88, 110 (HL) "My Lords, I shall now permit myself a general observation. Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective. A statute is designed to be workable and the interpretation thereof by a court should be to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sine qua non for an offence is not disputed. Therefore, it is unnecessary to refer to any of the judgments which lay down that proposition. There is also no disputing the rule that it is for the prosecution to prove the guilt of the accused. This is the normal rule in criminal jurisprudence. However, there may be situations where the law provides, as in the case of statutory offences, that mens rea shall be presumed, which presumption will be rebuttable. The legislature may also provide that a particular act by itself without anything more will constitute the offence and attract the penalty, a penalty which may be quantified in terms of money or which may be a physical penalty, viz. Imprisonment. In this context, we may refer to the following observations in Sheldrake's case [2004] 3 WLR 976, 983 (supra) : "But it is of course the ordinary duty of the courts to give effect to what Parliament has by clear words or necessary implication enacted, and it is not hard to find instances in which Parliament has clearly intended to attach criminal consequences to proof of defined facts, irrespective of an individual's state of mind or moral blameworthiness. Many such instanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a genuine case." 62. This applies to the petitioners herein. 63. In X v. United Kingdom . [1972] 42 Collecting Decision 135], a provision under the Sexual Offences Act, which gives rise to a rebuttable presumption, was attacked as being violative of Article 6(2) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, 1950. The Commission rejected the attack holding that, what was created was a rebuttable presumption which the defendant should disprove and it was not a presumption of guilt and that in the present instance, the presumption was restrictedly worded and was neither irrebuttable nor unreasonable. The following sentence is very relevant - "To oblige the prosecution to obtain direct evidence of living on immoral earnings would, in most cases, make its task impossible". The following extract from the above judgment is relevant : "From this body of authority, certain principles may be derived. The overriding concern is that a trial should be fair, and the presumption of innocence is a fundamental right directed to that end. The convention does not outlaw presumptions of fact or law but requires that these should b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to restrain fraudulent trading in counterfeit goods, the framing of offences as offences of 'near absolute liability' and the dependence of the defence on facts within the defendant's own knowledge and that it is to be expected that those who supply traders with counterfeit products are unlikely to be co-operative, so in practice, if the prosecution must prove that a trader acted dishonestly, fewer investigations will be undertaken and fewer prosecutions will take place. 66. In He Kaw Teh [1985] 157 CLR 527, the issue of mens rea in statutory offences was examined in some detail. The court stated that there are three matters to be considered while deciding whether presumption has been displaced and Parliament intended the offence created by legislation to have no mental ingredient. These are : (i) the words of the statute creating the offence; (ii) the subject matter of the statute; and (iii) whether imposing absolute liability will assist in enforcing the statute. In Rex v. Wamfler [1987] 11 N.S.W.L.R. 541, the statutory offences were divided into three categories for the purpose of determining whether mens rea is required to establish liability : (i) those in whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undesirable effect upon the public, against which the law is directed. That effect may be in relation to social, economic or political interests; and the legislature has had a duty to suppress the evil or to safeguard the interest thereunder." (Validity of S. SA of the Dairy Industry Act, 1949 In Re. [1949] SCR 1)." 68. It was held that the Parliament, therefore, retains the power to designate the specific acts which it considers harmful to the State. A Privy Council case was referred to, where it is stated that if Parliament genuinely determines that commercial activities which can be so described are to be suppressed in public interest, their lordships saw no reason why Parliament should not make them crimes. It is accepted that the (statute) is to be interpreted in the widest sense, "but that breadth of scope contemplates neither a static catalogue of offences nor of sanctions. Evolving and transforming types and patterns of social and economic activities are constantly calling for new penal controls and limitations and new modes of enforcement and punishment adapted to the changing conditions are not to be taken as being equally within the ambit of parliamentar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was contrary to the settled principles of criminal jurisprudence. It was also contended that there should always be proof of culpable mental state of mind on the part of the accused; and any provision which imposes penalty by resorting to statutory presumption was per se unconstitutional. After giving their anxious and deep consideration to all the aspects, the Supreme Court rejected the contentions stating that, "They are unacceptable and if given credence, they would frustrate the very object of the amended Act" . The Supreme Court held that the liberty of the individual must be controlled in the interest of society and it cannot stand alone, but must be compared with the companion virtue liberty and morality, liberty and law, liberty and justice, liberty and common good, liberty and responsibility which are concomitants for orderly progress and social stability and that the concept of individual liberty in harmony with social order is in consonance with the universal declaration of human rights and other International Covenants. The Supreme Court held that it was no doubt true that the golden rule that runs through the web of all civilized criminal jurisprudence that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case [1993] 78 L. Ed 664) was whether placing the burden of proof on a co-accused of a charge of conspiracy so as to violate the Alien Land Law of California was violative of due process under Fourteenth Amendment. Cardozo, J. Speaking for the unanimous court held that within the limits of reason and fairness, the burden of proof may be lifted from the State in criminal prosecutions and cast on a defendant. The limits are in substance these ____ that the State shall have proved enough to make it just for the defendant to be required to repel what has been proved with excuse or explanation, or at least that upon a balancing of convenience or of the opportunities for knowledge the shifting of the burden will be found to be an aid to the accuser without subjecting the accused to hardship or oppression. Special reasons are at hand to make the change permissible. The legislature may go a good way in raising a presumption or in changing the burden of proof, but there are limits. What is proved must be so related to what is inferred in the case of a true presumption as to be at least a warning signal according to the teachings of experience. Presumptions that are not evidence in a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... movement of goods or currencies." 74. In Pyarali K. Tejani v. Mahadeo Ramachandra Dange [1974] 1 SCC 167, which dealt with food adulteration, the Supreme Court held that it is trite law that in food offences, strict liability is the rule not merely under the Indian Act, but all the world over. Nothing more than actus reus is needed where regulation of private activity in vulnerable areas like public health is intended. The Supreme Court observed as follows : "Nothing more than the actus reus is needed where regulation of private activity in vulnerable likes public health is intended. In the words of Lord Wright in Mc Leod v. Buchanan [1940] 2 All ER 179, 186 (HL), 'intention to commit a breach of statute need not be shown. The breach in fact is enough.' Social defence reasonably overpowers individual freedom to injure, in special situations of strict liability." 75. In the above case, the constitutionality of the rules banning use of Saccharine and Cyclamate was challenged. The Supreme Court further observed thus : "Constitutionality not chemistry, abuse not error, is our concern and the Executive has not transgressed limits at all here. Within the wide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been explained in this case. 79. In the present case, the prosecution must prove that the assessee has failed to furnish the returns in due time, which in law he was bound to do. From the attendant circumstances and in the absence of any defence evidence to the contrary, it is open to the Court to logically infer that there must have been a wilful disregard to comply with the legal requirement. But by the introduction of Section 278E, this inference is made a presumption as to the existence of the culpable mental state on the part of the assessee. This does not mean that the Court accepts the culpable mental state as an irrebuttable fact. All that the law requires is for the person or the assessee to prove that there were circumstances which prevented him from discharging his statutory duty. 80. What is reasonable doubt has been explained in Ramakant Rai v. Madan Rai [2003] 12 SCC 395 in the following words (page 405) : "Doubts would be called reasonable if they are free from a zest for abstract speculation. Law cannot afford any favourite other than the truth. To constitute reasonable doubt, it must be free from an overemotional response. Doubts must be actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the possession of the unauthorised article." 83. The provision which was challenged in Bhanabhai Khalpabhai v. Collector of Customs [1994] Supp. 2 SCC 143, namely Section 138-A of the Customs Act, is identical to the provision impugned herein. In that case, the Supreme Court observed thus : "It is well known, that it is very difficult for the prosecution, to prove every link, in respect of the commission of the offence under the Act by direct evidence. The whole process of smuggling, for evading payment of custom duty consists of different links. The links aid and abate each other, sometimes through a remote control. That is why, Parliament has introduced Section 138-A in the Act . . . . . It can be said that the provision aforesaid is an exception to the general criminal jurisprudence that onus never shifts on the accused and he has only to raise a doubt in the mind of the court, in respect of the correctness of the prosecution version. It is different from Sections 106 and 114 of the Evidence Act. In view of Section 138-A, once a presumption is raised about a culpable mental state on the part of the accused, that he had stored the silver ingots, to export them outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' framework. There are several stages as for instance, the intention, the planning, the preparation and the execution of the offence. Such an offence may be proved either by direct ocular evidence or by circumstantial evidence, where every link is in place, leading to the proof of guilt of the accused. This is not an offence like that. Many statutory offences do not fall within these parameters. Violations of the provisions of law either by doing what is forbidden or by not doing what is mandated, is the offence and the statute may also insist upon the mens rea element or it may not. When the element of mens rea is part of the statutory offence, then what follows is that the particular act of omission or commission should be done with the intention, with "knowledge", "deliberately", 'without reasonable cause" or as in the case of the impugned provision, "willfully". The prosecution cannot indiscriminately launch proceedings as was alleged on behalf of the petitioners herein without proving or without establishing that the particular act was done or a particular duty was not done. In the instant case, the alleged act is - wilful failure to furnish in due time the return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumption amounts to proof of guilt and it was submitted, and with much force, that the impugned provision is a legislative presumption of guilt. I am afraid not. The law does not presume and the law has not presumed that the assessee is guilty. The law has only asked the Court to presume that nothing prevented the assessee from filing his return in accordance with law and in response to the notices and therefore, the failure is wilful. If there were such compelling circumstances, it is always open to the assessee to prove them in accordance with law. That does not seem to be and cannot be a difficult thing to do. In fact, obviously, the Parliament found that it was well nigh impossible for the prosecution to prove the absence of compelling circumstances which prevented the assessee from what in law the assessees were bound to, i.e., prove the negative, so in its wisdom, decided that it would be easier and more practicable, and in the context of the objects sought to be achieved, require the assessee to show those facts which would lead the Court to infer that act "A", namely filing the return in due time was not possible. If the assessee proves it, then the prosecution wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended that there could be flagrant misuse and abuse of the law. The possibility of flagrant abuse or misuse of law has never been a ground for holding a provision ultra vires. We cannot presume that the authorities will administer the law "with an evil eye and an unequal hand". This has been so held in several cases where the constitutionality of a legal provision was attacked. The observations of the Supreme Court in Krishna Lal's [1995] Supp 2 SCC 187, case where the Kerala Abkari Act was challenged, are squarely applicable to the present case. Merely because the Act requires the assessee to prove that there were circumstances which prevented the assessee from filing the return, it would not amount to violation of Article 20(3) of the Constitution. 92. In Thangal Kunju Musaliar v. M. Venkatachalam Potti, ITO [1956] 29 ITR 349 (SC) ; AIR 1956 SC 246, which dealt with evasion of tax during war times, when Section 5(1) of the Travancore Act XIV/1124 was attacked as unconstitutional, the Supreme Court tried to ascertain the scope and purpose of the impugned Section by analysing its Preamble and then at the impugned section itself. The condition in Section 5(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstance in Krishna Lal's case [1995] Supp 2 SCC 187, and in A. Thangal Kunju Musaliar's case [1956] 29 ITR 349 (SC) stating that in the background of the ground realities, it is open to the legislature to make stringent and harsh provisions to plug loopholes, which in the case on hand, was not possible if the usual procedure under the Tax Law was applied. 95. Are the words "beyond reasonable doubt" not definite and therefore impossible for the assessee to know what exactly the words define? This question deserves to be answers in the negative outright. There is no ambiguity with regard to what the assessee has to prove - the assessee has to prove that there were reasons for not filing the return in due time. If he proves that, then the prosecution fails, and the manner in which the words "beyond reasonable doubt" should be construed has also been explained in various decisions; so, the non-usage of "preponderance of possibilities" cannot be a vitiating factor. It is not the doubt of a vacillating mind or a timorous mind, but if from the circumstances which are proved by the assessee that he was prevented from filing the return, then the assessee would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... background of factual realities, it is open to the legislature to make such provisions as are necessary to plug the loopholes in order to prevent violations, if the earlier procedure was not effective. Presumptions are really regulations of the burden of proof and not presumptions of guilt. If there are certain facts, if when established would justify excuse what is prima facie an offence, then the onus of proving those facts obviously rests on the party accused. Reasonableness can be tested against the opportunity given to the defendant to rebut the presumption; retention by the Court of the power to assess the evidence; and the difficulties and the near impossibility of obtaining direct evidence by the prosecution as to the mental state of the accused in the particular context. There is no vagueness with regard to the words 'reasonable doubt' and the standard of reasonableness has been explained in the decisions referred to above. "Reasonable" means exactly that it should be reasonable and not farfetched. When a statute creates a duty or a liability and a failure in this regard as an offence, then it is reasonable not to ask the prosecution to prove as part of its ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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