Introduction

• This case revolves around the Doctrine of Waiver, which stipulates that an individual can voluntarily relinquish their fundamental rights granted by the State.
• The central issue in question is whether it's permissible for an individual to waive their fundamental rights.
• The Constitution of India assures fundamental rights to its citizens, and it explicitly prohibits individuals from waiving their fundamental rights based on personal preference.

Facts

• The appellant assessee lodged an appeal asserting that Section 8A of the Taxation on Income (Investigation Commission Act) lacks legality and is null.
• The Central Government had initial grounds to believe that assessee had evaded taxes for the assessment year spanning from 1st April 1939 to 31^st March 1947, amounting to Rs. 4,47,915.
• The commission offered the assessee an option to settle under Section 8A of the Taxation on Income (Investigation Commission Act) by paying 75% of the escaped income along with a penalty of Rs. 14,064.
• Without any other recourse, the assessee accepted the settlement. Later, it was revealed that settlements under Section 8A could not be enforced due to the unconstitutionality of Section 5, rendering it void.
• The assessee requested a refund of the amount paid under the settlement. However, the Commissioner maintained that the settlement was binding and not subject to revocation.
• Displeased with this decision, the assessee appealed to the hon’ble Supreme Court under Article 136 of the Indian Constitution.

Issues Involved

• Whether the settlement made under section 8A of the Taxation on Income (Investigation Commission Act) is illegal and void?
• Whether by accepting the settlement assessee waived his fundamental rights?

Observations

• Justice Sudhi Ranjan Das emphasized that under Article 14 of the Indian Constitution, no individual or state has the authority to waive any breach of the State's obligations.
• The SC, referencing cases such as Suraj Mall Mohta and Co. and M.CT. Muthiah, deemed Section 5 of the act discriminatory and unenforceable.
• Justice N.H. Bhagwati noted the distinction between statutory, constitutional, and fundamental rights.
• While constitutional rights may be waived by citizens as they are granted by the Constitution, fundamental rights are inherently different and immune from legislative interference, thus cannot be waived by citizens.
• Justice K Subba Rao remarked on the clarity of Article 13, which not only renders pre-constitutional laws void if inconsistent with fundamental rights but also prohibits the state from enacting laws contrary to fundamental rights.
  • He also affirmed that citizens cannot waive their fundamental rights.

Conclusion

• The SC, in this case, ruled that a citizen cannot voluntarily waive their fundamental rights.
• As a result, the proceedings under the Taxation on Income (Investigation Commission Act) were annulled, and the Union Government's order implementation was invalidated.