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Judgment
WHETHER the assessment & levy of Income Tax is a "service" extended out by the Central Government, (or its Tax Officers) within the meaning of its definition in Section 2(1)(o) of the Act ? This is the threshold core question in this complaint.
IN view of the pristinely legal nature of the issue aforesaid the facts would pale into relative insignificance. Nevertheless the salient features thereof have to be noticed to provide the terra-firma for the alleged list. The Complainant Mr. R.P. Kapur is a doyen of the legendary erstwhile, INdian Civil Service, which has been called the steel frame of the pre and post independence administrative organization of the Country. The primal grievance of the complainant is that in the evening of his life in his eighteenth year and indifferent health he has been harassed with regard to his INcome-tax assessment by the two INcome Tax Officers namely Amrik Singh Sandhu and Mewa Ram impleaded as opposite parties. The Union of INdia or the INcome Tax Department as such have not been so impleaded. The primal allegation is that the INcome-tax return of the complaint-assessee filed by him on the 28th of March, 1980 had dragged on for well nigh 13 years to his chagrin. It is the allegation that in order to deliberately harass the complainant he was saddled with an INcome-tax levy of Rs. 1,69,850/- vide Annexure 1 (A,B,C,& D). The relevant orders have been labeled as unconscionable and outrageous and were taken in appeal to the Commissioner of INcome Tax at Rohtak, who quashed the same vide Annexure II dated 3rd of August, 1992. The allegation is that the opposite parties not only declined to implement the appellate order, but instead opposite party No. 2 launched a coercive process for the recovery of the tax through the INcome Tax Officer at Ambala. The complainant was consequently compelled to rush and resort to the Commissioner of INcome Tax (Appeals) at Patiala and after great hardship apparently secured an order just in time to save him from the immed iate payment of Rs. 1,69,000/-odd or face the humiliating prospect of auction of his property which would ruin his family prestige. It is then the case that the opposite parties did not relent and the complainant had to request the Chief Commissioner, INcome Tax, Chandigarh to intervene in the matter and the grievance is that no action has been taken against the two opposite parties at all and his case was merely transferred to Shri R.C. Ahuja, INcome Tax Officer of Ward I where his assessment lay. It is pleaded that though the arguments in the case were concluded before the said Officer on the 26th of November, 1993 the re-assessment order has not been formally notified and it is prayed that the same will be submitted where received. Strong language has been employed against the two opposite parties for both the assessment and the levy of the tax and the attempt to make expeditious recovery thereof. The merits of the INcome-tax case of the complainant have been then enumerated in detail to which reference becomes unnecessary in view of the threshold legal question of the maintainability of the complaint. Apart from the two opposite parties the alleged blame for the delay of 13 years in finalizing the assessment is also laid at the door of the one Hem Raj Singh and Shri Amrik Singh Sandhu. Relying on Lucknow Development Authority v. M.K. Gupta, III (1993) CPJ 7 (SC), it is the plea that the opposite parties be rendered personally accountable for their inaction and harassment and the compensation of minimum of Rs. 20 lacs has been claimed as relief. Somewhat altruistically it has been curiously prayed that the same may be placed, at the disposal of the Hon''ble Chief Justice of INdia and Hon''ble Chief Justice of Punjab & Haryana High Court for being used for the needy and similarly harassed assesses of the INcome Tax Department. In the detailed written statement filed on behalf of the two opposite parties it has been clarified that the correct name of opposite party No. 1 is Shri Amarjit Singh Sandhu and not Amrik Singh Sandhu as stated in the complaint. Preliminary objection No. 2 in detail asserts that the complainant does not come within the ambit of the definition of a consumer at all nor the opposite parties have extended out any service for consideration according to its definition under the Act and consequently the complaint warrants outright dismissal for lack of maintainability. The alternative legal plea is that Section 293 creates a legal embargo against the initiation of the present complaint which is consequently not maintainable. The allegations of the complainant having not come with clean hands for invoking the beneficent consumer jurisdiction have been then raised in para 3 of the preliminary objections whitest the succeeding paragraph 4 pleads the legal infirmity of non-joinder of necessary parties including Shri Hem Raj, Shri Vijay Aggarwal, Shri R.C. Ahuja against whom allegations have been raised. Lastly the bar of limitation is also raised apparently because the assessment order being that of the year 4980.
On merits, the allegations in the complaint have been denied parawise and controverted with added explanations but any detailed reference thereto is unnecessary for the adjudication of the threshold question posed at the outset about the maintainability of the complaint.
MR. Varindar Ishar, the learned Counsel for the opposite parties had placed in the forefront has spear-headed argument that by not stretch of imagination can be complainant come within the ambit of the definition of a consumer under the Act. Relying upon the relevant provisions of the statute it was the firm stand that the opposite parties had extended out no service whatsoever within the meaning of the definition under-Section 2(1)(o), nor had the complainant hired or availed any such service and in any case paid no consideration therefore. Consequent submission was that no consumer dispute can arise even accepting the averments in the complaint, and the same is hence not maintainable at the very threshold. In the alternative the firm reliance was placed on under Section 293 of the Indian Income Tax Act for contending that the same provided complete immunity to the opposite parties with regard to proceedings in any civil suit, prosecution or other proceedings which would include the consumer jurisdiction. Reliance was placed on 1984 (150) Income Tax Reports 578, Sh. Sukhdav Chand, Asstt. CIT, Acquisition Range v. Sh. Kashmir Singh Bhullar & Others and 1987 (2) I.L.R. Punjab & Haryana 197, Income Tax Officer, A Ward, Hissar v. Shanti Parshad Jain and Others. As would be manifest from what follows hereinafter reference to the other preliminary objections raised becomes unnecessary.
ON the other hand Mr. R.P. Kapoor in a persistent and erudite argument had contended that the assessment and levy of Income-tax is a service extended out to the citizens. Relying firmly on terminology it was contended that the very name (Indian Revenue Service) would show that it was a service and therefore ipso facto within the ambit of the Consumer Protection Act. Further the stand was that the said service was manned by public servants as defined in Section 21 of the Indian Penal Code, and the very fact that they were public servants would make the opposite parties amenable to the consumer jurisdiction. In the alternative or in addition Mr. R.P. Kapoor''s stand was that firm allegations of malice and mala fides had been raised against the opposite parties and what the law protects under-Section 293 is only officials action in good faith and not otherwise. The prayer was that the question of mala fides be decided on merits and the mere allegation thereof would automatically bring the lis within the ambit of a trial here. In order to appraise the rival stand it becomes necessary at the outset to notice the statutory provisions in the light of which the issue has to be adjudicated and decided. Herein it is common ground that the complainant wishes to bring his case within the scope of the hiring of services and no question of any purchase of goods or unfair trade practice or other causes of action under the Act arise. It, therefore, suffices to notice in extenso the definition of a consumer with regard to the hiring of service under-Section 2(1)(d)(ii) and the definition of service under Section 2(1)(o) of the Act :- (a) "consumer" means any person who : - (i) X X X (ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who (hires or avails of) the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person." "service" means service of any description which is made available to potential users and includes the provisions of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board, or lodging or both (housing constructions) entertainment, amusement or the purveying of news or other information, but does not include" the rendering of any service free of charge or under a contract of personal service."
ERE one gets enmeshed in the language of the statute or the morass of precedent, it is refreshing to examine the question on principle. The larger issue that looms is with regard to the very nature of the taxing power of the State. The core question remains whether the levy and assessment of Income tax, or for that matter any other tax, is in the nature of a service to the citizens. From time immemorial it is settled that the power of levy tax on the subjects is one of the sovereign functions of the State without which it cannot possibly even survive, particularly in the present commercial age. One can recall the hallowed qualifications of the sovereign powers of taxation in the well-known dictum of "No Taxation Without Representation". The very essence of a tax is that it is levied as the command, of the State with all the power and sanction behind it for its imposition and collection. A tax stricto-sensu is not even remotely a quid-pro-quo for any service rendered or likely to be rendered. That is the hallmark f its distinction from a fee. Whilst the latter requires a nexus with some service rendered, a tax in sharp contradiction thereto is in a sense a command of the sovereign State levied and'' executed by the legislative sanction. As a matter of generic law this is so well settled that further elaboration would be wasteful particularly in the summary consumer jurisdiction. It suffices to notice the authoritative and binding annunciation on the point by the Final Court in A.I.R. 1954 S.C. 282, The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Sivamiar of Sri Shirur Mutt : - "A neat definition of what " tax " means has been given by Latham C.J. of the High Court of Australia in - "Marrhews v. Chicory Marketing Board.'' 60 CLR 263 at page 276 (M). "A tax" according to the learned Chief Justice is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment "for services rendered." This definition brings out, in our opinion, the essential characteristics of a tax as distinguished from other forms of imposition which, in a general sense, are included within it. It is said that the essence of taxation is compulsion, that is to say, it is imposed under'' statutory power without the tax-payer''s consent and the payment is enforced by law vide - ''Lower Mainland Diary v. Ciystal Dairy Ltd.'' 1933 AC 168 (N)."
ONCE the nature of the taxing power of the State is noticed as above, it may be perspectively viewed against the back-drop of the "service" under the Act. Can it be said that the levy, assessment and the compulsive recovery of a tax is a service of any description which is made available to the potential users. On principle, it does not appear to be so and further the enumerated classes of service like banking, financing, insurance etc. given in the definition under-Section 2(1)(o) are poles apart from and what has been called the regal sovereign function of taxing its subjects. Now once it is held on principle that the State''s taxation power is not a service nothing also would perhaps survive. What however further buttresses the opposite parties'' stand is the fact that in order to be a consumer a person has to show that he has hired or availed any such service for a consideration. Even when pin-pointed it could not be elaborated on behalf of the complainant as to what consideration had he paid to the opposite parties or the State for the onerous assessment and levy of Income-tax against him by which he stands aggrieved. Viewed from any angle therefore it seems impossible to bring the complainant within the scope of a consumer who has hired for consideration a service as defined under the Act.
Apart from the larger principle and the particular language and definition of a consumer and service under the Act the matter seems to be equally covered by authoritative precedent which have held the field for more than a century. It suffices to notice the binding reiteration of the principle in A.I.R. 1960 S.C. 675, The Corporation of the City of Nagpur v. Its employees and Fulsing Mystry and Others. Therein after referring to the well known enunciation of Lord Watson in Coomber v. Berks Justices, (1883) 9 AC 61 (at page 74) it was observed that the administration of justice, maintenance of order and repression of crime were among the primary and inalienable functions of a constitutional Government which have been colourfully labeled as the sovereign regal functions of the State. The celebrated dictum of the Law Lords may be noticed in terms. Lord Blackburn observed as follows : - " I do not think it can be disputed that the administration of justice, both criminal and civil, and the preservation of order and prevention of crime by means of what is now called police, are among the most important functions of Government, nor that by the constitution of this country these functions do, of common right, belong to the Crown."
Again Lord Watson held : - "And seeing that, in my opinion, the administration of justice, the maintenance of order, and the repression of crime, are among the primary and inalienable functions of a constitutional Government."
YET again the view of Isaacs, J. in the dissenting judgment in Federated State School Teachers Association of Australia v. State of Victoria (1928-29) 41 C.L.R. 569 (at page 585) was apparently relied upon for the view that the legislative power, the administration of laws, the exercise of judicial power were the sovereign regal functions of the State. However those were not even remotely intended to lay down any exhaustive list of sovereign regal functions. Indeed it was authoritatively observed in the said case that taxation, defense of the realm, and the conduct of the foreign relations, patently and abundantly qualified as the sovereign regal functions of the State as well. Now once it is held as above, as it must necessarily be, that the power of taxation is a sovereign regal function then the same would stand poles apart from what is defined as a service under the Act and the hiring or availing of such a service for a consideration by a consumer-citizen. Indeed the two concepts appear to be geometrical opposites, or to use a term of art, they are antonyms.
BEFORE we part with this aspect of the case the compliment of a rational refutation has to be necessarily extended to the forceful and persistent argument of Mr. Kapoor that the opposite parties being the members of the Indian Revenue Service was itself proof positive that they were rendering a service within the meaning of the Act. We regret our inability to agree. Merely because the Indian Revenue Service is so named can not become conclusive on the legal issue that they are extending out services under the consumer jurisdiction to the assessee. Whilst one must compliment the complainant for the ingenuity of the submission, the same is not obviously tenable. Indeed he may be reminded of the fact that he himself has been a distinguished member of the Indian Civil Service but the mere fact of that name would not render the members thereof amenable to the consumer jurisdiction whilst discharging their official duties flowing from the executive functions of the State, Indeed it appears to us that the contention is no more than a pun on mere terminology, and the naming of the Central services. One in indeed reminded of the hallowed words of Shakespeare "What''s in a name? A rose by any other name would smell as sweet". The stand taken on behalf of the complainant in this context must in our view necessarily fail. What is said above would apply muta-tis -mutandis to Mr. R.P. Kapoor''s ancillary argument that the opposite parties under-Section 2(37) of the Income Tax Act are public servants within the meaning of Section 21 of the Indian Penal Code. Relying yet again on terminology it was the plea that being public servants they are necessarily rendering service to the complainant as also all other Income-tax assesses within the scope and meaning of the definition of ''service'' under the Act. We are afraid that the aforesaid contention apart from being untenable would indeed boom-rang upon the complainant''s plea. It bears repetition that mere terminology or the fact that Income-tax officers would be public servants is again not conclusive on the point that they are hiring out their services for a consideration within the meaning of the definition in the Consumer Protection Act. This apart a reference to Section 21 of the Indian Penal Code on which persistent reliance was placed would indeed repel the complainant''s stand. To enumerate only a few under the aforementioned Section 21 of the Indian Penal Code, the Commissioned Officers in the Armed Forces, every Judge, every Officer of a Court of Justice, every Juryman or Assessor, are all public servants. It is manifest that it would be difficult to hold that Commissioned Officers of the Armed Forces, Judges and Officers of the Court and Jurymen, are extending out services for a consideration to the citizens. Plainly enough these categories of persons are discharging functions which come within the ambit of the sovereign regal functions of the State or its executive or judicial powers. They can not possibly be equated with any hiring out of services for monetary consideration or any deficiency therein.
YET again notice must be taken of Mr. R.P. Kapoor''s stand that the very fact that the allegations of mala fides and malice have been levied would confer jurisdiction on the redressal agencies under the Act which they may otherwise lack wholly. It is some what elementary that a Court or Tribunal must at its very portals have jurisdiction to try the lis before it can enter into the question of mala fides or in fact any other issue at all. If the litigant is not otherwise within the jurisdiction, the mere allegation and even concrete proof of malice would not alter the threshold jurisdictional question. We refrain from elaborating, what is somewhat manifest on principle and the more so in view of the precedent cited before us on behalf of the opposite parties in Shri Sukhdev Chand Asstt. ClT, Acquisition Range v. Shri Kashmir Singh Bhullar and Others (Supra). Therein an identical argument that the allegation of mala fides would confer jurisdiction despite the bar under-Section 293 of the Income Tax Act, was forcefully and categorically repelled in the following terms by S.S. Sodhi, J. "It is indeed an unheard of proposition of law that allegations of mala fides can confer jurisdiction upon a Court which the Court otherwise lacks and where its jurisdiction is specifically barred as in the present case under-Section 293 of the Act."
The aforesaid ratio concludes the matter against the complainant and his alternative plea on this aspect must consequently fail.
LASTLY in all fairness we must record the persistent reliance of Mr. Kapoor on III (1993) CPJ 7 (SC) Lucknow Development Authority v. M.K. Gupta. Passages there from were quoted extensively and it was argued that the opposite parties are personally liable for damages and compensation to the exclusion of the Income Tax department of the Union of India. We are afraid that the aforesaid landmark case is in no way relevant to the core issue which has to be decided in the first instance. It is manifest that the whole question before their Lordship in the said case was whether housing construction was within the definition of service even earlier to the amendment of the Act in1993. The whole thrust of the case was focused on that issue and the same is consequently alien to the question whether the Taxing Officers of the State are rendering service within the meaning of the Act. We must hold that the Lucknow Development Authority v. M.K. Gupta (supra) is wholly distinguishable.
In the light of the somewhat exhaustive discussion above the answer to the question posed at the outset has to be necessarily rendered in the negative. It is held that the assessment and the levy of Income-tax is not a service extended out either by the Central Government or its Tax Officers within the meaning of the definition in Section 2(1)(o) of the Act. Inevitably it would follow that the complainant is not a consumer for the purpose of the statute and the complaint is not maintainable on that threshold ground.
THE aforesaid ratio would conclude the matter but we feel duty bound to notice the opposite parties'' alternative stand resting on Section 293 of the Indian Income Tax Act. It becomes wholly unnecessary in view of what has been held above to finally pronounce on this issue, with particular reference to the consumer jurisdiction and the matter must await a more appropriate case. It only suffices to mention that the stand of the opposite parties that the aforesaid Section affords immunity to the Income Tax Department and its Officers is seemingly plausible. One may notice the language of the said provision which is in the following terms : - "No suit shall be brought in any Civil Court to set aside or modify any proceeding taken or order made under this Act; and no prosecution, suit or other proceeding shall lie against the Govt, or any officer of the Govt, for anything in good faith done or intended to be done under this Act."
Construing the above the Punjab & Haryana High Court in Shri Sukhdev Chand, Asstt CIT, Acquisition Range v. Shri Kashmir Singh Bhullar and Others (supra) upheld the contention that the said Section equally bars the jurisdiction of the Civil Court in matters covered by the Income Tax Act. This view was then followed in Income Tax Officer, A Ward, Hissar v. Shanti Parshad Jain and Others I.L.R. 1987(2) Punjab & Haryana 197 (supra). THErein it was categorically held as follows : - "This plea, even if has to be given any weight, for the sake of argument, can not be my mind, lift the bar of jurisdiction created by Section 293 of the Income Tax Act against a Civil Court. THE pleas which the learned Counsel for the assesses wants to raise obviously concern the merits of the case for which he has to seek him proper remedies under the Income Tax Act and before the authorities mentioned therein."
To finally conclude, we hold that the complainant does not come within the pale of a consumer as defined in the Consumer Protection Act and this complaint is not maintainable and is hereby dismissed as such. It goes without saying that this would in no way preclude the complainant from resorting to all other remedies which may be available to him at law. Complaint dismissed.