Mehrotra, J.:— The petitioner Hardeodas Jagannath is a partnership firm carrying on business at Mawkhar, Shillong in the district of United Khasi and Jaintia Hills. By an order dated 14th March, 1959, the Income-tax Officer, Shillong who has been impleaded as opposite party No. 1 to this petition assessed the petitioner under section 23(4) of the Indian Income-tax Act (hereinafter called the Act) for the assessment year 1958–1959. The total estimated income was Rs. 9 lacs and the tax demanded was Rs. 63,750/- from the petitioner. The income of the firm was allocated according to the shares of the two partners — J.N Bawri and N.M Bawri at Rs. 4,50,000/- each.

2. By this petition under Article 226 of the Constitution, it is prayed: (1) that a writ of mandamus be issued calling upon the respondent to withdraw and cancel and forbear from giving effect to the notice under Secs. 28(3), 46(5A) and proceedings under Section 46(2) of the Act; (2) a writ of certiorari calling upon the respondent to send for the records of the case and to quash assessment for 1958–1959; and (3) a writ of prohibition calling upon the respondent to cancel and forbear from giving effect to or in any way to take any steps in respect of the notices issued under Sections 28(3), 46(5A) and proceedings initiated under Section 46(2) of the Act.

3. Briefly the facts on which the petitioner has based his claim are that on the 20th January, 1959, notice purporting to be one under Section 22(4) of the Act was issued against the petitioner which was served on it on or about 24th January, 1959. By this notice, the petitioner was called upon to produce account books, bank pass books for the Sambat year 2014 being the previous year for the assessment year 1958–1959, on the 29th January, 1959. Although there is no mention of the date of the service of the notice under Section 22(2) of the Act in the notice issued under Section 22(4), it is asserted by the opposite party that a notice was issued on the 31st May, 1958 under Section 22(2) of the Act calling upon the applicant to submit his return of the total income. The notice, according to the opposite party, was served on the petitioner on the 3rd July, 1958. On the 27th January, 1959, the petitioner applied for the adjournment of the proceedings initiated by the notice under Section 22(4) and the time was extended up to 27th February, 1959. At this stage, there is some controversy between the parties as to the actual facts. According to the petitioner, on the 27th February, 1959 Sri K.M Brahmin, advocate, appeared on behalf of the petitioner before the opposite party No. 1 and the case was adjourned to the 12th March, 1959. The respondent denies that Shri K.M Brahmin ever appeared before the Income-tax Officer on the 27th February, 1959 and thereafter the case was adjourned for the 12th March, 1959.

4. According to the petitioner, on the 12th March, 1959, Sri S.P Sarma. Chartered Accountant appeared on behalf of the petitioner before respondent No. 1 and informed that the books of account of the petitioner of relevant years had been seized by the Superintendent of Taxes, Government of Assam, Shillong on the 6th March, 1959 and they could not therefore be produced on the said date in terms of the notice issued under Section 22(4) of the Act and prayed for further adjournment. This verbal request was followed by a petition dated 16th March, 1959. Thereafter on the 17th March, 1959, the petitioner received from the respondent No. 1 a copy of the order of assessment dated 14th March, 1959 and a notice under Section 28(3) of the Act. The respondent's contention with regard to this fact is that Sri S.P Sarma never appeared before him on the 12th March, 1959 and no adjournment was granted at his request.

5. After the receipt of the order of the 17th March, 1959, the petitioner on the 26th March, 1959 made an application under Section 27 of the Act praying for the cancellation of the assessment under Section 23(4) of the Act and for making a fresh assessment and by a separate application of the same date, he prayed for the stay of the realisation proceedings. On that date, a chalan for payment of Rs. 10,000/- was issued and delivered to Sri J.N Bawri, a partner of the firm towards the tax. The amount was paid by Sri J.N Bawri. Thereafter another application was made on the 8th April, 1959 to the respondent praying for a formal order staying the realisation of the tax demand.

6. On the 14th April, 1959 an appeal was preferred against the assessment order to the Appellate Assistant Commissioner and on the 16th April, 1959, the petitioner made an application to the respondent No. 1 under Section 45 of the Act praying for an order not to treat the petitioner as a defaulter till the final disposal of the appeal. On the 22nd April, a notice alleged to be under Section 46(5A) was issued to the United Bank of India, Shillong, United Commercial Bank, Shillong and the State Bank of India, Shillong prohibiting them from making any payment to the petitioner.

7. Copies of these notices were received by the petitioner on the 24th April, 1959. Certificated under Section 46(2) was also issued to the Collector by the respondent No. 1. On the 29th April, 1959 the application under Section 27 was fixed for hearing. On that date Sri Sarma, the advocate for the petitioner asked for the inspection of the service report or acknowledgment in token of the alleged service on the petitioner, of notice under Section 22(2); but according to the petitioner, the inspection was refused. On 26th April, 1959 the petitioner made another application to the respondent No. 1 to know about the orders passed on his previous application for the stay of realisation.

8. Thereafter on 4th May, 1959, an application was made to the Commissioner of Income-tax to a direction to the respondent No. 1 not to treat the petitioner as a defaulter till the disposal of the appeal filed before the Appellate Assistance Commissioner. The application made under Section 27 was subsequently found to have been dismissed on the 4th May, 1959 and the copy of the order was delivered on the 5th May, 1959. The Commissioner of Income-tax by his two orders date 8th May, 1959 and 14th May, 1959 rejected the application of the petitioner and refused to issue any direction to respondent No. 1 to treat the petitioner not to be a defaulter.

9. The petitioner on the 11th May, 1959 received a copy of the order passed by the respondent No. 1 by which he purported to have rejected the petition made by the petitioner under Section 27 of the Act and on that very day, action was taken by the respondent No. 1 under Section 46(2) of the Act. On these facts, it is contended that the order of assessment is illegal and volume and should be quashed. It is further contended that the subsequent proceedings for recovery of the tax amount are also illegal and should be cancelled. It is also contended that in the circumstances of the case, the opposite party No. 1 should be directed not to treat the petitioner as a defaulter till the disposal of the appeal. Various point of fact and law have been raised in this case an the arguments covered very wide range.

10. The main contention raised by the application is that there was no service of the notice under Section 22(2) of the Act and consequently the order of assessment under Section 23(4) is without jurisdiction and should be quashed by the Court. The argument is that the condition precedent for the exercise of power under Section 23(4) is the failure to file a return required be any notice given under Sub-section (2) of Section 22. A notice under Section 22(2) can be said to have been given only if it has been served. Men issue of a notice unless it has been served of the assessee cannot be regarded as a “notice give under Section 22(2).” Section 22(2) contemplate service of notice upon the assessee and not mered issue of notice.

11. On behalf of the Opposite parties the Advocate General has taken a number of preliminary objections to the grant of relief of certiorari quashing the order of assessment. He contends that the petitioner had an alternative remedy as much as he can file an appeal against the under of assessment. An assessee has a further remedy to ask for the cancellation of the assessment under Section 27 of the Act. An appeal is provided against an order rejecting an application under Section 27. The assessee therefore has ??? adequate alternative remedy available to him had this Court should therefore not exercise its discretion in its favour under Article 226 of the Constitution until the alternative remedy under the Act has been exhausted.

12. In the present case it is pointed out that the petitioner has not only an alternative remedy available to him, but in fact he has availed of the remedy inasmuch as he has filed an appeal against assessment. He had filed an application to he Commissioner of Income-tax under Section ??? which has also been rejected. A number of authorities were cited to show that when an alterative remedy is available, this Court will not exercise its powers under Article 226 of the Constitution. As regards the maintamability of an application under Article 226 of the Constitution, here an alternative remedy exists, the following reservation of the Supreme Court in the case of State Of U.P v. Mohammad Nooh ., reported in AIR 1958 SC 86 will be apposite:

“There is no rule, with regard to certiorari as here is with mandamus, that it will he only when here is no other equally effective remedy. Provided the requisite grounds exist certiorari will ??? although a right of appeal has been conferred by statute. The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at conclusion as to whether it should, in exercise ??? its discretion, issue a writ of cretiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, ??? any. But the rule requiring the exhaustion of statutory remedies before the writ will be granted ??? a rule of policy, convenience and discretion other than a rule of law. The superior court will readily issue a certiorari in a case where there has been a denial of natural justice before a court of summary jurisdiction.

13. If, therefore, the existence of other adequate legal remedy is not per se a bar to the issue of a writ of certiorari and if in a proper case it may ??? the duty of the superior court to issue a writ ??? certiorari to correct the errors of an inferior court or tribunal called upon to exercise judicial ??? quasi judicial functions and not to relegate the petitioner to other legal remedies available ??? him and if the superior court can in a proper ??? exercise its jurisdiction in favour of a petitioner who has allowed the time to appeal to spire or has not perfected his appeal, e.g by furnishing security required by the statute, it cannot then be laid down as an inflexible rule of ??? that the superior court must deny the writ then an inferior court or tribunal by discarding ??? principles of natural justice and all accepted ??? of procedure arrived at a conclusion which shocks the sense of justice and fair play merely because such decision has been upheld by another inferior court or tribunal on appeal or revision.

14. There may conceivably be cases where the error, irregularity or illegality touching jurisdiction or procedure committed by an inferior court or tribunal of first instance is so patent and loudly obtrusive that it leaves on its decision an indelible stamp of infirmity or vice which cannot be obliterated or cured on appeal or revision. The superior court may, quite properly, exercise its, power to issue the prerogative writ of certiorari to correct the error of the court or tribunal of first instance, even if an appeal to another inferior court or tribunal was available and recourse was not had to it or if recourse was had to it, it confirmed what ex facie was a nullity.”

15. The reason why the courts refuse to entertain writs when an alternative remedy is available is that legislature has set up tribunals for decisions in appeals and, that the remedy which the court could give the petitioner could obtain from these tribunals. But whether the petitioner should be disentitled to maintain the petition or not is a matter of discretion with the court and it the court is satisfied that the petitioner will not get justice from the appellate tribunal or that he would have no confidence in the decision of the tribunal, or that the appeal would be nothing more than to use the language of Sir Trevor Harris an “appeal from Caesar to Caesar” then the court is not bound to accede to the submission of the department that it should not hear the petitioner.

16. It is true that we cannot judge administrative officers discharging judicial functions with the same strictness that we would judge a judge sitting in court. A judge has to maintain certain standards of detachment and objectivity apart from being impartial but an administrative officer has to do a considerable amount of administrative work, decide questions of policy, give directions, give instructions which would be intolerable if they were done by a judge sitting in court; but this does not mean that although he may clearly express his opinion, although he may emphatically indicate what his views are the assessee must still be compelled solemnly to go before him in appeal to hear in appeal the decision which he has practically already given (Glaxo Laboratories (India) Private Ltd. v. A.V Venkateswaran*, AIR 1959 Bom 372).

17. There is no inflexible rule that the existence of an alternative remedy is a bar to the issue of a writ of certiorari. The issue of various writs or directions is in the discretion of the court and the court while exercising its discretion may take into consideration the existence of the alternative remedy as a matter of policy, but the existence of an alternative remedy is not per se a bar to the issue of a writ of certiorari.

18. The second lino of argument developed by the Advocate General is that having regard to the nature of the objection raised by the petitioner, this Court will not issue a writ of certiorari quashing the order. The order of certiorari cannot be a substitute for the right of an appeal and if this Court before issuing an order of certiorari has to go into questions of fact, the Court will refuse to issue any order or writ in the nature of certiorari. In what circumstances an order in the nature of certiorari will be issued by this court has been the subject matter of numerous pronouncements of the Supreme Court. The position has been summarised by the Supreme Court in the case of Hari Vishnu Kamath v. Ahmad Ishaque, reported in (S) AIR 1955 SC 233 as follows:—

“There was considerable argument before us as to the character and scope of the writ of ‘certiorari’ and the conditions under which it could be issued. The question has been considered by this Court in ‘Parry and Co. v. Commercial Employees' Association, Madras“, AIR 1952 SC 179, ‘Veerappa Pillai v. Raman and Raman Ltd.’, AIR 1952 SC 192, Ebrahim Aboobakar v. Custodian General of Evacuee Property, New Delhi, AIR 1952 SC 319, and in T.C Basappa v. T. Nagappa, AIR 1954 SC 440. On these authorities, the following propositions may be taken as established:—

(1) ‘Certiorari’ will be issued for correcting errors of jurisdiction, as when an inferior Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it (2) ‘Certiorari’ will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. (3) The Court issuing a writ of ‘certiorari’ acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal, even if they be erroneous. This is on the principle that a Court which has jurisdiction over a subject-matter has jurisdiction to decide wrong as well as right, and when the Legislature does not choose to confer a right of appeal against that decision, it would be defeating its purpose and policy, if a superior Court were to re-hear the case on the evidence, and substitute its own findings in ‘certiorari’. These propositions are well settled and are not in dispute.”

19. In the case of Nagendra Nath Bora v. Commr. of Hills Division and Appeals, Assam reported in AIR 1958 SC 398, the Supreme Court laid down what the expression ‘error apparent on the face of the record’ connotes. The jurisdiction of the High Court on certiorari may be invested if it is only an error of law apparent on the face of the record and not every error either of law or fact which can be corrected by a superior court in the exercise of its statutory powers as a court of appeal or revision.

20. Where the errors cannot be said to be errors of law apparent on the face of the record but they are merely errors in appreciation of documentary evidence or affidavits, errors in drawing inferences or omission to draw inferences, or in other words, errors which a court sitting as a court of appeal only, could have examined and, it necessary, corrected, there is no case for the exercise of jurisdiction under Article 226 of the Constitution. The principles underlying the jurisdiction to issue a writ or order of certiorari are no more in doubt, but the real difficulty arises in applying the principles to the particular facts of a given case.

21. The contention of the petitioner is that the condition precedent for the exercise of the power under Section 23(4) is the failure to filed the return on the giving of the notice under Section 22(2) of the Act. Unless, therefore, the preliminary fact of the giving of notice under Section 22(2) is complied with the Income-tax Officer will have no jurisdiction to assess under Section 23(4). Any determination by the Income-tax Officer of the existence or non-existence of this preliminary fact is examinable by this Court in its supervisory jurisdiction under Article 226 of the Constitution.

22. It is further significant that Section 23(4) does not lay down that the best judgment assessment can be made if the return has not been filed. On a notice being issued under Section 22(2) Section 23(4) will be attracted only if the notice has been given, while in the case where the non compliance with the notice under Section 22(4) has been made a ground for best judgment assessment, the section will be attracted if the notice has been issued. Sub-section (2) of Section 22 provides that the Income-tax Officer will serve a notice upon the assessee requiring him to furnished return while the other sub-sections of Section 22 only speak of the issue of the notice.

23. Unless, therefore, in the present case it is established that the notice was served on the petitioner in accordance with the law, there was no notice given under Section 22(2) and consequently the assessment under Section 23(4) would be without jurisdiction. It is further pointed out that it may not be within the ambit of the power of the appellate authority to determine if then was a valid notice under Section 22(2) of the Act or not. Section 27 which gives power to cancel the assessment also lays down that the Income-tax Officer shall cancel the assessment if he is satisfied that the assessee was prevented by sufficient cause from making the return required under Section 22.

24. This section presupposes that there has been a service of the notice as contemplated by Section 22(2), and the Income-tax Officer while dealing with applications under Section 27 is not competent to go into the question as to whether there was any notice at all given under Section 22(2). When this part of the section is contrasted with the subsequent portion of Section 27, will be clear that in cases where the assessment made on account of failure to comply with the notices under Section 22(4) or Section 23(2) can be cancelled, the words ‘did not receive the notice’ have been used.

25. It was also urged by the counsel for the assessee that in the present case there was in notice under Section 22(2) as the service of the notice has not been established. What is the scop of the power of the superior court to examine ??? lateral facts for issuing a writ of certiorari has been summarised in the Halsbury's Laws of England Third Edition, volume II in paragraph 270 at page 142 as follows:—

“The case is more difficult where the jurisdiction of the inferior tribunal depends, not upon some preliminary proceeding, but upon the existence of some particular fact. If the fact is collated to the actual matter which tile inferior tribunal has to try, that tribunal cannot, by a wrong session with regard to it, give itself jurisdiction which it would not otherwise possess unless by statute the inferior tribunal is given power to determine conclusively questions relating to its own jurisdiction.

The inferior tribunal must, indeed, decide as of the collateral fact, in the first instance; but the superior court may upon certiorari, inquire to the correctness of the decision, and may dash the proceedings in the lower court if such decision is erroneous. On the other hand, if the ??? in question is not collateral, but a part of the very issue which the lower court has to require into, certiorari will not be granted, although the lower court may have arrived at an erroneous conclusion with regard to it.”

26. Dealing with the question of want of jurisdiction the law has been thus summarised in paragraph 268 of the Halsbury's Laws of England:

“Where the inferior tribunal has acted without jurisdiction certiorari to quash the proceedings may be granted. Want of jurisdiction may arise from the nature of the subject-matter; so that the inferior tribunal had no authority to enter on the enquiry, or upon some part of it. It may also arise from the absence of some essential preliminary proceedings. Thus, although the inferior tribunal may have jurisdiction over the subject-matter of the inquiry, it may be a condition precedent to the exercise of its jurisdiction that the proceedings should be begun within a specified time, or that some step should have been previously taken by the person who institutes proceedings before the tribunal. Under various statutes certain notices re requisite before the commencement of proceedings; and the omission to serve such notices derives the inferior tribunal of jurisdiction and affords ground for certiorari.”

27. The next argument pressed by the Advocate General was that there was an adequate and appropriate machinery in the Income-tax Act itself even for the determination of the question as to whether a notice under Section 22(2) was served on the petitioner and to find out if there as been a proper assumption of jurisdiction to make best judgment assessment under Section 23(4) of the Act. Any view taken by the Income-tax Officer as regards the service of notices under section 22(2) may be erroneous, but such an error an be remedied in appeal or ultimately by a reference to this Court under Section 66.

28. The Income-tax Act is a complete code and any grievance of the assessee can be remedied only by having recourse to the Act itself. Reliance was placed on the case of Raleigh Investment Co. Ltd. v. Governor-General in Council, reported in AIR 1947 PC 78. Particular reference was made to he following passage at page 81 of the report:—

“Under the Act the Income-tax Officer is charged with the duty of assessing the total income of the assessee. The obvious meaning, and in their Lordships' opinion the correct meaning, of the phrase “assessment made under the Act” is an assessment finding its origin in an activity of the assessing officer acting as such. The circumstance that the assessing officer has taken into account an ultra vires provision of the Act is in this view immaterial in determining whether the assessment is ‘made under the Act’.

The phrase describes the provenance of the assessment; it does not relate to its accuracy in point of law. The use of the machinery provided by the Act, not the result of that use, is the test….Jurisdiction to question the assessment otherwise than by use of the machinery expressly provided by the Act would appear to be inconsistent with the statutory obligation to pay arising by virtue of the assessment.”

29. That was a case where the question related to the maintainability of a suit and the proper interpretation of Section 67 of the Income-tax Act. It was a case prior to the Constitution and the question of the power of the High Court to issue direction or writs under Article 226 was not before the Privy Council.

30. The next case relied upon is the case of K.S Rashid and Son v. Income-tax Investigation Commission, reported in 1954-25 ITR 167 : (AIR 1954 SC 207). The following observation at p. 174 (of ITR): (at p. 210 of AIR) of the report has been relied upon:—

“For purposes of this case it is enough to state that the remedy provided for in Article 226 of the Constitution is a discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere.”

31. As I have already indicated above, the existence of an alternative remedy under the Act is no absolute bar to this Court granting relief under Article 226 of the Constitution. But as the remedy provided for under Article 226 of the Constitution is a discretionary remedy the fact of an alternative remedy has to be considered by the High Court in granting relief under Article 226 of the Constitution. The proposition put widely that in no case where there is a complete machinery provided for under an Art. for the redress of wrong the High Court will exercise its powers under Article 226 of the Constitution, cannot be accepted.

32. The next case relied upon is the case of In the matter of Lachhman Das Nayar, reported in AIR 1953 Punj 55. The facts of the case were that prior to the assessment year 1937–1938 the petitioner along with his several sons formed a Hindu undivided family. They were assessed as such. For the year 1938–1939 returns were made on the basis of partnership. The Income-tax Officer refused to recognise this partnership. Ultimately on appeal by the assessees the Privy Council held that the firm was registrable as it was a valid partnership on the 29th July, 1947.

33. For the assessment years 1940–1941 to 1944–1945 the assessment had been completed but as the High Court had held that the firm was not registrable as there was no genuine partnership, the assessment was cancelled. On the returns which had been filed by the firm as constituted except for the year 1941–1942 no assessment had been completed. Thereafter proceedings under Section 34 were taken and the total income of the firm was assessed in the hands of the Hindu undivided family on 14th February, 1945 before the judgment of the Privy Council.

34. On the 16th March, 1949 a number of notices were issued by the Income-tax Officer on the Hindu undivided firm. The returns were made under protest on the 13th June, 1949, and on the 15th March, 1950 the Income-tax Officer made five separate orders of assessment under Section 23(5) read with Section 34. Further orders of reassessment on the undivided Hindu family were made. Several proceedings thereafter took place. On the 26th March, 1951 the Income-tax Officer issued several notices under Section 34 for the years 1942–1943, 1943–1944 and 1944–1945 the validity of which was challenged by the petition before the High Court under Article 226 of the Constitution. In that case the following propositions were laid down:—

“(1) The Income-tax Act has entrusted to the Income-tax Officer the decision of the facts and the law to decide whether the provisions of S. 34 are applicable;

(2) the exigencies of the State require that there should be a tribunal to expeditiously and at a small expense decide questions which arise in the matter of assessment;

(3) machinery has been created by the Act for the determination of the liability of an individual for assessment and the extent thereof;

(4) it is that machinery and that alone which can be used for the purposes of assessment and all complaints against such assessment are to be adjudicated upon in accordance with the machinery provided by the Act;

(5) it is the statutory duty of the Income-tax Officer to make the assessment which can only be challenged by way of appeal under this Act and the case stated to the High Court; and

(6) whether the attack on the proceeding under Section 34 of the Act is due to the want of preliminary conditions or conditions precedent or to the bar of time, or illegality due to the matter being ‘res judicata’, or due to the provision being ‘ultra vires’ or the amendment being prospective, they are all questions of law and do not affect the jurisdiction of the Income-tax Officer.”

35. This decision is distinguishable on facts although the principle laid down therein cannot be doubted. Under Section 34 the Income-tax Officer is given exclusive jurisdiction to reassess an assessee and further, to conclusively determine the existence of the preliminary conditions necessary to the exercise of the powers under Section 34. The same principle does not apply to the cases of best judgment assessment under Section 23(4). The condition precedent for exercise of power under Section 23(4) is the failure to file a return on the notice being given under Section 22(2) of the Act.

36. Under Section 23(4) the Income-tax Officer has not been given any exclusive jurisdiction to determine the fact whether notice under Section 22(2) was, or was not served and any determination by the Income-tax Officer is amenable to writ of certiorari by this Court. Even if the existence of the preliminary condition has been assumed by the Income-tax Officer, it is examinable by this Court in a writ of certiorari if the condition did or did not exist in the present case. In the case of R. v. Bolton reported in (1841) 1 QB ??? which is considered to be landmark in the historic of certiorari, it was observed as follows:—

“It is contended that affidavits are receivable for the purpose of shewing that they acted wit out jurisdiction and this is, no doubt, true, take literally; the magistrates cannot, as it is off said, give themselves jurisdiction merely by the own affirmation of it. But it is obvious that the may have two senses: in the one it is true; in the other, on sound principle and on the best considered authority, it will be found untrue.

37. Where the charge laid before the magistrate stated in the information, does not amount in ??? to the offence over which the statute gives his jurisdiction, his finding the party guilty by he conviction in the very terms of the statute would not avail to give hun jurisdiction; the convicted would be had on the face of the proceedings, a being returned before us. Or if, the charge being really insufficient, he had misstate it in drawing up the proceedings, so the they would appear to be regular, it would ??? clearly competent to the defendant to should to us by affidavits what the real charge was, and that appearing to have been insufficient, we should quash the conviction.

38. In both these cases a charge he been presented to the magistrate over which he had no jurisdiction, he had no right to entertain the question, or commence an inquiry into the merits; and his proceeding to a conclusion will not give him jurisdiction. But, as in this latter case we cannot get at the want of jurisdiction but by affidavits, of necessity we must receive then. It will be observed, however, that there we received them, not to show that the magistrate has come to a wrong conclusion, but that he never ought to have begun the inquiry. ((1841) 113 ER 1054 at p. 10571.”

39. The observation of Lord Esher M. ??? in the case of R. v. Commrs. for Special Purpose of Income-tax, (1888) 21 QBD 313 has been quoted with approval by their Lordships of the Supreme Court and has been universally adopted as laying down correctly the circumstances when any decision by a tribunal of limited jurisdiction on collateral facts will be examinable by a writ of certiorari:

“When an inferior court or tribunal or body which has to exercise the power of deciding facts is first established by Act of Parliament, the legislature has to consider what powers it will give that tribunal or body. It may in effect say that, if a certain state of facts exist and is shown to such tribunal or bod before it proceeds to do certain things, ??? shall have jurisdiction to do such tilings, bu not otherwise. There it is not for them conclusively to decide whether that state of facts exist, and, if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction.

But there is another state of things which may exist. The legislature may entrust the tribunal or body with a jurisdiction, on finding that it does exist, to proceed further or do something more. When the legislature are establishing such a tribunal or body with limited jurisdiction, they also have to consider, whatever jurisdiction they give them, whether there shall be any appeal from their decision, for otherwise there will be lone. In the second of the two cases I have mentioned it is an erroneous application of the formula to say that the tribunal cannot give themselves jurisdiction by wrongly deciding certain acts to exist, because the legislature gave them jurisdiction to determine all the facts, including the existence of the preliminary facts on which the further exercise of their jurisdiction depends.”

40. In the case of R. v. Nat Bell Liquors Ltd., reported in 1922–2 AC 128, Lord Sumner dealing with the power of the superior Court to interfere with the order of the inferior Court by issuing a writ of certiorari observed in the following terms:—

“That the superior Court should be bound by the record is inherent in the nature of the case. Its jurisdiction is to see that the inferior court has not exceeded its own, and for that very reason it is bound not to interfere in what has been done within that jurisdiction, for in so doing it would itself, in turn, transgress the limits within which its own jurisdiction of supervision, not of review, is confined. That supervision goes to two points: one is the area of the interior jurisdiction and the qualifications and conditions of its exercise; the other is the observance of the saw in the course of its exercise.”

41. It may be pointed out that the effect of he decision of the Privy Council in Raleigh Investment Company's case, AIR 1947 PC 78, has been considerably modified by the decision of the supreme Court in the case of State of Tripura v. Province of East Bengal reported in 1951–19 ITR 32 : (AIR 1951 SC 23). In the Supreme Court case, it was held that when a notice has been issued under an ultra vires provision and the gist of the wrongful act complained of was subjecting the plaintiff to the harassment and trouble by commencing against him an illegal and unauthorised assessment proceeding which might eventually result in an unlawful imposition and levy of tax a suit could be brought that the act was ultra vires. In the case of S.C Prashar v. Vasantsen Dwarikadas, reported in 1956-29 ITR 857 : (S) AIR 1956 Bom 530), it was held that the High Court could issue a writ of prohibition under Article 226 of the Constitution if the notice issued under Section 34 of the Income-tax Act was beyond eight years. It was observed that

“Except for the territorial limitation placed upon it by the Constitution there is no limit upon the right or the power of the High Court to issue ??? writ under Article 226 or Article 227. Undoubtedly, the Courts for their own guidance have put limitations upon their very wide rower, but those are self-imposed limitations; they are not legal or constitutional limitations.”

42. No Tribunal and no Officer can confer jurisdiction or authority or competence upon itself or himself by misconstruing a section. An authority cannot claim to exercise jurisdiction by construing a section erroneously and thereby contending that the section so wrongly construed gives him the necessary power. In such a case, if the section has been wrongly construed, it would be a clear case of absence of jurisdiction apparent on the face of the record because the Court has got to look at the section and to decide whether the officer construing the section was in the right or in the wrong.

43. The next line of argument of the Advocate General was that the jurisdiction of the Income-tax Officer to assess, does not depend upon the validity or otherwise of the notice under Section 22(2) of the Act. Even though therefore it may be accepted that the notice is not proved to have been properly served on the assessee, the assessment under Section 23(4) cannot be said to be without jurisdiction. Reliance has been placed for this proposition on the case of Chatturam v. Commissioner of Income-tax, Bihar, reported in AIR 1947 FC 32.

44. The assessees in this case were residents of Jhumritalaiya, a place in the district of Hazaribagh in Chotanagpur Division of Bihar, and were assessed for the year 1940–1941, the accounting year being 1939–1940. On the 20th April, 1940 a notice under Section 22(2) of the Income-tax Act was published in the newspapers requiring them to furnish a return in the prescribed form. On the 22nd April, 1940, a notice under section 22(1) of the Income-tax Act was published in the newspapers requiring persons generally to submit the returns in the prescribed form.

45. The Indian Finance Act of 1940 had not been extended by any notification up to that time to this partially excluded area. On 26th May, 1940, a notification was issued under Section 92(1) of the Government of India Act, 1935 extending the Indian Finance Act of 1940 to that area. The returns were submitted by the assessees to the Income-tax Officer and the assessments were completed on the 9th March, 1941. The assessments were challenged. A number of points were taken before the Federal Court as to the validity of the notification issued by the Governor and the applicability of the Income-tax Act to the excluded areas.

46. One of the contentions raised was that the notification of the 26th May, 1940 by which the Indian Finance Act was made applicable to the excluded areas was issued after the notices had been issued under Section 22(1) and (2) by the Income-tax Officer. The notices, therefore, when issued were without jurisdiction. By a subsequent notification the Governor could not give jurisdiction to the Income-tax Officer in respect of his ultra vires notices. That contention was repelled and the following observation in that connection was relied upon by the Advocate General in support of his contention:

“This contention is founded on a misunderstanding of the jurisdiction of the Income-tax Officer and the operation of the Income-tax Act. The Income-tax assessment proceedings commence with the issue of a notice. The issue or receipt of a notice is not, however, the foundation of the jurisdiction of the Income-tax Officer to make the assessment or of the liability of the assessees to pay the tax. It may be urged that the issue and service of a notice under S. 22(1) or (2) may affect the liability under the penal clauses which provide for failure to act as required by the notice.

The jurisdiction to assess and the liability to pay the tax, however, are not conditional on the validity of the notice…..The liability to pay tax is founded on sections 3 and 4 of the Income-tax Act which are the charging sections. Sec. 22 etc. are the machinery sections to determine the amount of tax.”

47. Various English authorities were considered and the following observation in the judgment of Sargant L.J in Whitney v. Commr. of Inland Revenue, (1926) 10 Tax Cas 88 was approved:—

“I cannot see that the non-assessment prevents the incidence of the liability, though the amount of the deduction is not ascertained until assessment. The liability is imposed by the charging section, namely, Section 38 (of the English Act) the words of which are clear. The subsequent provisions as to assessment and so on are machinery only. They enable the liability to be quantified, and when quantified to be enforced against the subject, but the liability is definitely and finally created by the charging section and all the materials for ascertaining it are available immediately.”

48. I do not think that this case is of much assistance. The observation of Kania, J. in the Federal Court decision referred to above clearly goes to show that the service of notice under Section 22(1) and (2) may affect the liability of the penal clauses; but the jurisdiction of the Income-tax Officer to assess is not founded on the notice. In the present case the contention of the assessee is that before Section 23(4) could be invoked it was necessary that the notices under section 22(2) should have been served and any wrong decision on the question of giving of the notice under section 22(2) cannot give jurisdiction to the Income-tax Officer to assess under Section 23(4).

49. In the case of Commr. of Agricultural Income-tax v. Sultan Ali Gharami, reported in (1951) 20 ITR 432 (Cal) the question which came up for decision was one under the Bengal Agricultural Income-tax Act. Section 24 of that Act which was similar to Section 22 of the Income-tax Act and section 38 which was similar to Section 34 of the Income-tax Act were considered. It was held in this case that mere issue of notice under Section 22(1) does not commence the assessment proceedings. The assessment proceedings commence if in pursuance of a general notice under Section 22(1) the return has been filed, but if a notice under Section 22(2) has been served, the assessment proceedings commence as soon as the notice has been served.

50. It is not necessary for the proceedings to wait to commence till the filing of the return in pursuance of the individual notice. In this case the return which was filed was treated not to be a return filed in pursuance of the notice under section 22(2). It was held that unless a notice was issued under section 38 which corresponds to Section 34 of the Income-tax Act, no assessment proceedings could be taken. The contention that the assessment proceedings commenced after the general notice had been issued under Section 22(1) was repelled. Dealing with the Federal Court decision, it was observed as follows:—

“I read that decision as meaning that the provisions relating to notices being merely procedural they could be made applicable with retrospective effect and that acts done under the sections being procedural acts they could be retrospectively validated. Although the liability to charge the tax may be there the charge could be brought home only by the officer whom the Act authorises acting in the manner that the Act enjoins. Neither in the case before the Federal Court nor in any of the English cases relied on in the judgment was there any departure from the provisions of the relevant Act.

Besides it may be that when any particular notice is in fact issued a defect in it or an irregularity concerning it will not affect the validity of the assessment. But the question in the present case is not so much the invalidity of the notice under section 24(2), as the validity of the proceedings which were commenced without complying with the statutory requirement of a notice under Section 38. The decision of the Federal Court does not cover an omission of a step which the statute regards as a condition precedent to the commencement of proceedings in exercise of jurisdiction. The absence of a notice under Section 38 in the present case and the invalidity of the notice under Section 24(2) cannot there fore be brushed aside as inconsequential.”

51. I am in complete agreement with the observations quoted above. In the case of Ram Niranjan Lal v. Addl. Dist. Magistrate, Kanpur reported in AIR 1952 All 822, the allotment of certain land to one Sardar Kartar Singh was challenged. The applicants in that case were the owners of 40 acres of land. They alleged that they were since their purchase in 1946 in the cultivator possession of the land. The Additional Collector, however, allotted the land to Sardar Kartar Singh under Section 3 of the U.P Lane Utilisation Act No. V of 1948.

52. The order of allotment was ex parte and was passed by the Additional Collector on the ground that notice had been issued to the Zamindar applicants; that they had taken the notice but had refused to endorse the acknowledgement. That was considered to be sufficient notice on the Zamindar by the Additional Collector and the allotment was therefore made. The service of notice on the landlord in that case was held not properly proved. The report of the process server in that case was to the effect that the notice was taken by the landlord but he refused to sign the acknowledgement.

53. But there was nothing in the record to show that the report had been verified by an affidavit of the serving officer of the serving officer was examined on oath. It was observed that the finding of the Additional Collector that the notice had been served on the applicants was based on evidence which was not admissible in law at all. The order of allotment was therefore without jurisdiction. Regarding the contention of the power of the High Court to quash such an order under Articles 226 and 227 of the Constitution, it was observed that

“the powers of issuing writs, directions or orders or of superintendence over inferior Courts or tribunals cannot be curtailed, modified or ??? by any enactment of the Indian Parliament or of the State Legislature. The power has been given to the High Court by the Constitution. No doubt the power of issuing a writ, direction or order was discretionary, but in exercise of its discretion the High Court must be guided by judicial considerations. The High Court in determining whether a particular writ, direction or order will or will not issue will take into consideration the historic background of that writ, direction or order. In cases where the citizen has been left by an Act without any remedy in the shape of an ordinary suit, it may be desirable, in the interest of sate-guarding the liberties for which these writs, directions or orders are intended, to help the citizen by the issue of a proper writ, direction or order.”

54. The law as to the circumstances under which the writ of certiorari could be issued as set out he Halsbury's Laws of England and referred to by me earlier in my judgment, was quoted with approval. Another argument to which I have already referred in my judgment earlier may be considered. The alternative remedy suggested by the Advocate General is the appeal against the order of assessment already filed in the present case. Section 30 of the Act which provides for an appeal, gives to my mind, restricted right of appeal against an order of assessment under Section 23(4).

55. In an appeal against such an order, the amount of income assessed under Section 23 or 27 or the amount of tax determined under Section 23 or 27 can be examined. No power has been given to the appellate authority to go into the question of the service of notice under Section 22(2). The appeal, therefore, against an assessment order cannot be regarded to be any adequate alternative remedy available to an assessee. Section 27 does provide the method by which the validity of the service of notice under Section 22(2) may be challenged. But that section gives power to the Income-tax Officer to decide if the assessee was prevented by sufficient cause from making the return required by Section 22.

56. In that connection it may be open to the assessee to say that as there was no service of notice under section 22(2), he was prevented by sufficient cause from filing his return. But in the present case the alternative remedy if any, by making an application under Section 27 was resorted to and a right of appeal against the order passed under Section 27 cannot be said to be an adequate remedy available to the petitioner. Similar view has been taken by the Bombay High Court in the case of Mauladin Ayub Firm, Akola v. Commr. of Income-tax, Bombay South, reported in AIR 1959 Bom 342.

57. In the result, therefore, in our opinion, the preliminary objections raised by the Advocate General cannot be accepted. Coming to the merits the case set out by the petitioner is that on the 20th January, 1959 a notice under Section 22(4) of the Act was issued on the petitioner calling upon him to produce account books, bank pass books for the accounting year by the 27th. January, 1959. In this notice there was no mention of the fact that any individual notice under Section 22(2) was served on the petitioner and that the notice under Section 22(4) had been issued as a notice under Section 22(2) had been served.

58. The petitioner denies the service of any notice under Section 22(2). On the 27th January, the case is said to have been adjourned to 27th February, 1959 and thereafter to the 12th March. On the 12th March again a prayer was made for adjournment as the account books of the assessee firm had been taken possession of by the Superintendent of Taxes, Government of Assam on the 6th March, 1959. On the 12th March, the petitioner was intimated that an ex parte order had already been passed on the 14th March, 1959 by the respondent. As I have already said, there is some controversy with regard to the fact whether the case was adjourned to 27th February at the request of the counsel for the assessee and that on the 12th March, 1959 the counsel for the assessee made a request for adjournment of the case.

59. In the counter-affidavit it is stated that on applicant's application dated the 27th January, 1959, the date for supplying the account books in compliance with the notice under Section 22(4) was adjourned to 27th February, 1959. But it is denied that Shri Kedarmal Brahmin appeared for the respondent on the adjourned date and at his request it was adjourned to 12th March, 1959. The correct position was that the applicant had defaulted with the notice under Section 22(4) on 27th February, 1959 and continued to be in default till the assessment was completed under Section 23(4).

60. It is asserted that as there was on the 27th February a default both under Section 22(2) and 22(4), the assessment could have been made on that very date under Section 23(4). As to the service of the notice, it is alleged in paragraph 5 of the counter affidavit that the notice was in fact issued on the 31st May, 1958 and served on 3rd July, 1958, and that the omission to mention the date of service of the notice under Section 22(2) in the notice issued under Section 22(4) was only a clerical omission. The assessment order dated the 14th March, 1959 under Section 23(4) clearly shows that it was not made for the default of a notice under Section 22(4), but for failure to file a return after individual notice had been served under section 22(2).

61. The contention of the assessee is that a notice under Section 22(4) could only be issued if a notice under Section 22(2) had been served on the assessee. In the present case as no notice was served under section 22(2) on the assessee, no valid notice could be issued under Section 22(4) and the question of committing any default of such a notice would not arise. But as I have said the order of assessment under Section 23(4) was made not for non-compliance with the notice under Section 22(4) but for non-compliance with a notice under Section 22(2).

62. The main question, therefore, to be considered is whether any notice under section 22(2) was served on the assessee. Section 63 of the Income-tax Act provides that a notice or requisition under this Act may be served on the person therein named either by post or, as if it were a summons issued by a Court under the Code of Civil Procedure, 1908. Sub-section (2) of Section 63 provides that any such notice or requisition may, in the case of a firm or a Hindu undivided family, be addressed to any member of the firm or to the manager, or any adult male member of the family and, in the case of any other association of persons, be addressed to the principal officer thereof.

63. It is argued on behalf of the assessee that in the present case the notice was not served by post. It has, therefore, to be established by the department that the service was effected as it the notice was a summons issued by a Court under the Code of Civil Procedure. The notice is said to have been served through a peon of the department. It is addressed to the firm and there is some signature indicating that it had been received by someone on behalf of the firm. The process server signed it saying that it has been served on the 3rd July, 1958.

64. In the order-sheet dated 31st May, 1958 it is mentioned that the notice under Section 22(2) has been issued calling upon the assessee to file return of total income of previous year. The order-sheet shows that the notice under section 22(2) was put up before the officer and there is an endorsement below it showing the issue of notice. Thereafter there is no mention in the order-sheet when was it considered by the Income-tax Officer as to whether the notice had been properly served on the assessee. There is at no stage any determination by the Income-tax Officer of the fact whether there was proper service of the notice issued under Section 22(2), on the assessee.

65. Order 5 Rule 16 of the CPC provides that where the serving officer delivers or tenders a copy of the summons to the defendant personally or to an agent or other persons in his behalf he shall require the signature of the person to whom the copy is so delivered or tendered, to an acknowledgement of service endorsed on the original summons. Rule 18 of O. 5 provides that the serving officer shall in all cases in which the summons has been served under Rule 16, endorse or annex or cause to be endorsed or annexed on or to the original summons returned stating the time when and the manner in which the summons had been served and the name and address of the person, if any, identifying the persons serving and witnessing the delivery or tender of the summons.

66. The Calcutta High Court added Rule 19A by which a declaration made and subscribed by the serving officer shall be received as evidence of the facts as to the service or attempted service of the summons. These provisions clearly point out that the evidence admissible to prove proper service of notice is an affidavit by the peon who is said to have effected the service. No averment has been made in the counter-affidavit by any person who had the personal knowledge of the service of the summons. The service has, therefore, not been proved by admissible evidence.

67. In the case of Gopiram Agarwalla v. First Addl. Income-tax Officer, reported in AIR 1959 Cal 420, the matter went up in appeal to a Division Bench from the Single Judge's decision in a matter under Article 226 of the Constitution. The Income-tax Officer in that case intended to proceed under Section 34(1)(a) of the Act. The first step to proceed further under the aforesaid section is to serve a notice containing the essentials required to be mentioned in a notice under Section 22(2) and unless a notice contemplated by Section 34(1) is served on the assessee, no further steps can be taken by the Income-tax Officer.

68. It was submitted in that case on behalf of the appellant that there was no proper service of the initial notice under Section 34 of the Act and as such further proceedings were invalid. It was submitted on behalf of the department that the strict requirement of the provisions of the Code of Civil Procedure could not be insisted upon in the matter of service of notice under the Income-tax Act as the provisions of the Code of Civil Procedure were not applicable directly to the proceedings before an Income-tax Officer; but they were attracted through the medium of Section 63 of the Act.

69. It was further submitted in that case that if the strict requirement of the Code of Civil Procedure was insisted upon in these proceedings serious consequences were likely to ensue. That contention was repelled by the Bench. The fact that certain serious consequences will ensue is no ground for the Courts to relax the rule of service. It was held that where there has not been a valid service of notice issued under Sec. 34 in accordance with the procedure provided under the Code of Civil Procedure read with Section 63 of the Income-tax Act, the proceedings taken by the Income-tax Officer on the assumption that there has been a valid notice under Sec. 34 was without jurisdiction. In my opinion the service of notice under Sec. 22(2) has not been proved in this case and as the condition precedent preliminary fact on which the jurisdiction of the Income-tax Officer to make ex parte assessment under Sec. 23(4) depends, has not been established, the assessment is without jurisdiction. The petitioner is entitled to a writ of certiorari quashing the order of assessment.

70. There is no verification as required under the Code of Civil Procedure by the peon who is said to have served the notice. There is no affidavit filed on behalf of the peon who is said to have served the notice to the effect that the service was properly effected. There is no material on the record before us from which it can be interred that the notice was received by one who was the authorised agent of the firm or that he was looking after the affairs of the firm in connection with the Income-tax matter, nor there is any material to establish the fact that the person who is alleged to have signed on behalf of the firm and received he notice was carrying on the business on behalf if the firm.

71. Advocate General has contended that Sec. 63 is not exhaustive. It only provides for some of the modes of service of notice. In the present case in application was filed by the assessee on the 27th January, 1959 for adjournment of the date to file the account books in pursuance of the notice under Sec. 22(4). No objection was raised by he assessee in that application to the effect that he notice had not been served on him. It cannot, therefore, be said that the assessee had no knowledge of the fact that a notice under Sec. 22(2) had been issued against him and that it should be presumed that the notice had been properly served.

72. As I have already pointed out, at no stage the Income-tax Officer investigated the matter as to whether the notice had been properly served on the assessee. The Income-tax Officer assumed that the notice as it was issued in the name of the ??? and is reported by the process server to have been served on someone who accepted it on behalf if the firm, has been served on the assessee and thus he had jurisdiction to make an ex parte assessment under Sec. 23(4). The service of the notice being a condition precedent to the exercise of the lower under Sec. 23(4), this Court can under Article 226 examine the matter and see if notice has been properly served.

73. No attempt has been made in these proceedings even to file an affidavit on behalf of the peon to the effect that the notice was served by him on the person who represented himself to be the agent if the firm. Nor has any attempt been made to show that the person who received the notice was fully authorised to do so. When there is a categorical denial by the assessee of the fact of the receipt if the notice, it could not be said that the department has discharged the burden to show that the notice had been served on the assessee in accordance with the provisions of Sec. 63 or otherwise.

74. As to the argument that adjournment was thought to comply with the notice issued under Sec. 22(4), that by itself does not establish the fact that the notice had been served under Sec. 22(2). Notice had been issued under Sec. 22(4) and if the assessee found that he was unable to comply with that notice, in asking for adjournment he could have only mentioned the circumstances under which he was unable to comply with the notice issued under Sec. 22(4). At the nighest it could be inferred that the assessee had acknowledge that notice under Sec. 22(4) had been issued against him, but that cannot be substituted for the mandatory requirement of the service of notice under Sec. 22(2) before an action under Sec. 23(4) could be taken.

75. It was also urged by the Advocate General that even in the application made under Sec. 27 or cancellation of the assessment, there is no mention of the fact that no notice under Sec. 22(2) was served. The opening part of this application mentions that the petitioner had been assessed under Sec. 23(4) for alleged defaults under Sections 22(2) and 22(4) of the Income-tax Act. This shows that the petitioner was under the impression that he had been assessed under Sec. 23(4) for the default of the notice under Section 22(4) and as such, he was called upon only to justify his failure to comply with the notice under Sec. 22(4).

76. The subsequent paragraphs only, therefore, set out the reasons under which he could not comply with the notice under Sec. 22(4). It is significant to note that Sec. 23(4) is attracted when the assessee fails to make the return required by any notice given under sub-section (2) of Sec. 22 or revised return under sub-section (3) of the same. Mere failure to file a return after service of notice under Sec. 22(2) is not enough under Sec. 23(4), but that he has also not made a return under sub-section (3) of Sec. 22. Sec. 22(3) gives right to the assessee to file a return any time before the assessment has been made.

77. On the 27th February, 1959 when the default had been made under Sec. 22(4), the assessee might have thought that either he would be granted some time to comply with the notice under Sec. 22(4) thereby giving him sufficient time to file a return under Sec. 22(3) or if the adjournment was refused and he was assessed under Sec. 23(4) for default of notice under Sec. 22(4), he had sufficient grounds to get the assessment cancelled. He could not have anticipated that although the date was fixed for complying with the notice under Sec. 22(4), and the default it any, has been committed of the notice under Sec. 22(4), still the Income-tax Officer will regard it as a default under Sec. 22(2) and proceed to assess under Sec. 23(4) and thereby deprive him of an opportunity under Sec. 23(3) to file a return.

78. No adverse inference, therefore, can be drawn against the assessee regarding the service of notice under Sec. 22(2) on him by his failure to mention that fact in his application for adjournment dated the 27th January, 1959, or in the application under Sec. 27. It was contended by the Advocate General that on the 27th February, there was a default under Sec. 22(2) by the petitioner in not filing his return by that time. Till 14th March, 1959 when the assessment was made under Sec. 23(4), no return had been filed and therefore the assessee had not even availed of the opportunity to file return under Sec. 22(3) and under these circumstances, the Income-tax Officer was bound to assess him.

79. He had no option to wait. The Income-tax Officer, as I have pointed out in his order, has not assessed him for non-compliance with the notice under Sec. 22(4) which suggests that he had not come to a conclusion that there was a non-compliance with the notice under Sec. 22(4). But he assessed the firm under Sec. 23(4) for non-compliance with notice under Sec. 22(2). Not only that in the order itself the Income-tax Officer has stated that a notice under Sec. 22(2) was issued to him on the 31st May, 1958, but up to that date he had not filed the return under that section either, and Sec. 23(4) was therefore clearly attracted and by issuing a notice under Sec. 22(4) the Income-tax Officer only made an attempt to examine the assessee's account with a view to collect materials for the purpose of making his best judgment assessment under Sec. 23(4), but the assessee did not choose to produce the account books.

80. This also suggests that even on the 20th January when he had issued notice under Sec. 22(4) the Income-tax Officer had made up his mind that default of the notice under Sec. 22(2) had been committed and that it was a case for ex parte assessment under Sec. 23(4). Under these circumstances, it was incumbent on the Income-tax Officer to mention in his notice issued under Sec. 22(4) that the notice under Sec. 22(2) had been served. On the date when he issued the notice under Sec. 22(4) he had therefore come to the conclusion that it was a case for best judgment assessment under Sec. 23(4), he should therefore have mentioned in the notice under Sec. 22(4) that notice under Sec. 22(2) had been served on the assessee. The failure to do so cannot now be explained by saying that it was a clerical error and to my mind it is a very strong circumstance which goes to suggest that the service had either not been effected in accordance with the law or at any rate by that time the Income-tax Officer had not decided after examining all the circumstances that the notice had been effected.

81. The next point which was urged by the petitioner's counsel was that in the circumstances of the present case the Income-tax Officer should have declared the assessee not to be a defaulter under Section 45 of the Act. The argument, has been stressed from two-fold aspects. Firstly that the discretion which has been given to the Income-tax Officer under Sec. 45 to treat the assessee as not being in default is a statutory duty cast upon the said Officer and there is a corresponding right in favour of the assessee which he can enforce against the Income-tax Officer by invoking the jurisdiction of this Court under Article 226 of the Constitution.

82. Secondly even if it is a discretion vested in the Income-tax Officer the discretion has to be exercised in a judicial manner and it is open to this Court to examine the circumstances of each case under Article 226 of the Constitution and find out if the discretion has been exercised on sound judicial principles. If this Court finds that the discretion has been exercised by ignoring certain relevant considerations, it will not be an exercise of discretion at all and this Court can issue a direction to the Income-tax Officer to exercise the discretion having regard to all the relevant considerations.

83. The facts relevant for the decision of the submissions made in this behalf have been set out in my order earlier. But to recapitulate them — on the 14th March, 1959 the assessment order under Sec. 23(4) was made. On the 26th March, 1959, an application was made for cancellation of the assessment under Section 27 of the Act & on the same date an application was made to the Income-tax Officer for the stay of the realisation of the tax amount. No appeal till then had been filed against the assessment order and consequently the proviso to Section 45 of the Act was not attracted. By another application dated 8th April, 1959 made to the Income-tax Officer, the petitioner formally prayer for the stay of the realisation of the tax demand.

84. Thereafter on the 14th April, 1959 an appear was filed against the assessment order and on the 16th April, 1959 an application was made under Section 45 of the Act praying for an order not to treat the petitioner as a defaulter till the fins disposal of the appeal. On the 22nd April, 1959 notice alleged to be one under Sec. 46(5)(a) to the Act was issued to various banks by the Income tax Officer. The application under Sec. 27 was fixed up for hearing on the 29th April, 1959. Before this on the 26th April, 1959 the assessee made an application to the Income-tax Officer to the effect that the should be intimated if any order have been passed on his application dated the 16th April for stay of realisation. As the assessee was not informed of the orders passed on his application dated the 16th April, the petitioner by his application dated the 4th May, 1959 approached the Commissioner of Income-tax for a direction to the Income-tax Officer not to treat the petitioner a defaulter till the final disposal of the appeal.

85. By an order dated the 4th May, 1959 the opposite party No. 1 is purported to have rejected the application made by the petitioner under Sec. 27. On the 11th May, 1959, the petitioner received the certified copies of the order by which the Income-tax Officer had ex parte rejected on the 28th April, 1959 the petition made by the applicant under Section 45 of the Act. On the same date action under Section 46(2) of the Act was also take by the Income-tax Officer. The order is very bring and mentions that out of the sum of Rs. 73,000 and odd due from the petitioner as a tax he has only paid Rs. 10,000/- and the balance was still outstanding. His petition was thus rejected. The order does not mention the reasons which led the Income-tax Officer to reject the prayer of the petitioner. In the counter-affidavit filed, it is state that in response to the application of the petition dated the 26th April, 1959 the copy of the order of the 20th April, 1959 rejecting the application was supplied to the applicant on the 7th May, 1959.

86. It is further submitted in the counter-affidavit that as the petitioner did not choose to furnish security for tax dues immediately, in spite of I having large cash in hand to the extent of Rs. ??? lacs on the 28th February, 1959, the Commission refused to interfere with the order of the Income-tax Officer rejecting the petitioner's application dated the 16th April, 1959. The Commissioner in his order which I shall examine later has ??? doubt referred to certain circumstances which his opinion disentitle the assessee to get the protection of the proviso to Sec. 45. But the order of the Income-tax Officer gave no opportunity ??? the petitioner to furnish any security for due payment of tax and to establish his incapacity to ??? the tax immediately. The finding that the petitioner had Rs. 17 lacs on the 28th February, 1959 cash in hand was based on the examination of certain account books of the petitioner in the custody of the Superintendent of Taxes, Shillong.

87. The account books were examined behind the back of the assessee. No opportunity was given to him to explain the entries in the account books. The best judgment assessment under Sec. 23(4) was itself based on those account books and on the assumption that the petitioner had a cash balance of Rs. 17 lacs in hand on the 28th February, 1959. This order was itself the subject-matter of the appeal. Under those circumstances, if the Income-tax Officer wanted to exercise his discretion judicially and rely upon the fact that the petitioner had a cash balance of Rs. 17 lacs on the 28th February, 1959, he should have given him an opportunity to explain the position and should have himself determined the fact of the incapacity of the assessee to pay up the tax demand immediately.

88. The Advocate-General very strongly relied upon the two orders of the 8th and 14th day of May, 1959 of the Income-tax Commissioner in connection with the application made by the petitioner for issue of a direction to the Income-tax Officer not to treat the petitioner as a defaulter in support of his contention that there did exist circumstances' which prompted the Income-tax Officer to reject the petitioner's prayer. He submits that it cannot therefore be said that the discretion was not exercised by him in a judicial manner. On the 8th of May, 1959 the Commissioner ordered the assessee to furnish the following information:

“(1) An affidavit (a) stating the amount of cash, which Sri J.N Bawri and N.M Bawri individually or collectively have in the name of the firm, Hardeodas Jagannath or otherwise, actually and in their hands and safes or anywhere else on 28-2-59 as also the cash which they similarly have on the date of the affidavit,

(b) explaining the difference, if any between the amount and the amount of the cash in hand shown in the Milan Bahi,

(c) pointing out how the balance, if any, was used or invested and

(d) setting out all the immovable properties and moveable wealth, in any shape or form (apart from the things of small value), owned by the aforesaid persons in their own name or through benamidars as on the date of the affidavit and on the date on which the notices of demand had been served on them as well as the amounts of debts and liabilities owed by the assessees to the stated parties along with their full present address.

(2) Title deeds of immovable property.

(3) An undertaking to the effect that the movable assets and things will not be used or dissipated before the tax habilities are finally determined and discharged.

(4) A letter addressed to the Superintendent of Taxes, Shillong, requesting him to hand over the seized account books to the Income-tax Officer, as that the assessee may be able to make the necessary adjustments in the presence of the Income-tax Officer for the purpose of determining the correct amounts of assessable incomes and wealth.”

89. He further ordered that if the assessee did not comply with the above direction, orders will be passed by him on the 14th instant. In the opening portion of his order he had observed that prima facie the petition had no merit because according to the assessee's own books he had a cash balance of Rs. 17 lacs on the 28th February, 1959 out of which it was very easy for him to pay up the tax demand of Rs. 7 lacs. The counsel for the assessee repudiated that allegation, but the Commissioner observed in his order that it was difficult to believe the allegation and further it was not possible for him to allow the relief prayed for without satisfactory proof and without full security for the safety of the tax demand.

90. On the 4th, the Commissioner observed that if the assessees were sincere about getting relief without causing any harm to the department they could have easily produced the tide deeds of immovable property along with the undertaking referred to in item No. 3 and the letter referred to in item No. 4. They could also have stated the actual cash in hand with them today without referring to the account books not in their custody to the extent it was necessary for them to refer to these account books in order to prepare their affidavit; they could have applied to the Superintendent of Taxes that they could be given an opportunity for looking into those papers in presence of the Officer. The simple letter of refusal that the petitioners have submitted today, could have been submitted on the very day on which he passed the interim order.

91. The stand taken by the assessee was that he was prepared to furnish security for the amount found ultimately due and as to the cash balance on that date it was stated that it was not possible for them to supply that as the account books were in the custody of the Superintendent of Taxes. Whether that was a reasonable explanation or not is not a matter which we at this stage will consider. But it does appear that the assessee was prepared to furnish security and that all the time the matter which weighed with the departmental authorities to refuse the prayer of the petitioner was the fact that firm had a cash balance of Rs. 17 lacs on the 28th February, 1959 and that he had kept double set of accounts. These were the matters for decision in appeal.

92. It was not fair to the assessee to assume these facts to be correct and to refuse the relief to the petitioner. Moreover, as I said the discretion has got to be exercised by the Income-tax Officer himself under Sec, 45 and any orders passed by the Income-tax Commissioner or any opportunity given by him to the petitioner, to explain his position, cannot substitute the discretion of the Income-tax Officer. The point submitted by the petitioner is that the Income-tax Officer did not discharge his duty in accordance with law and consequently it is no exercise of the discretion by him at all. The fact that the opportunity was given by the Commissioner to the petitioner and the fact that the Commissioner has stated that in spite of the said opportunity the assessee had not fully co-operated with the department, points to the conclusion that the Income-tax Officer had not applied his mind to these facts and he cannot be said to have exercised his discretion at all in the matter.

93. Section 45 of the Act lays down that any amount specified as payable in a notice of demand under sub-section (3) of Sec. 23A or under Sec. 29 or an order under Sec. 31 or Sec. 33 is to be paid within the time at the place and to the person mentioned in the notice. Or order and that any assessee failing so to pay will be deemed to be in default provided that if an assessee has presented an appeal under Sec. 30, the Income-tax Officer may in his discretion treat the assessee as not being in default as long as such appeal is undisposed of Sec. 46 then provides the mode of recovery on the assessee being in default in making payment of the tax demand. The proviso to Sec. 45 in terms gives power to the Income-tax Officer “in his discretion” to treat the assessee as not being in default.

94. It will be convenient to examine the authorities cited by the parties. The petitioner has referred to the case of Ladhuram Taparia v. B.K Bagchi, reported in (1951) 20 I.T.R 51 (Cal). In that case the petitioners carried on business in co-partnership under the name and style of Ladhuram Taparia from the 28th February, 1941. For the assessment years 1943–1944 and 1944–1945 the firm was registered under Section 26-A of the Act, but for the assessment year 1945–1946 the Income-tax Officer refused to renew the registration of the said firm. The assessment was made on the 29th March, 1950 and the notice of demand was dated 30th March, 1959. The petitioners were required to pay a sum of Rs. 8,67,239/10/- on or before the 20th of April, 1950. The petitioners filed an appeal both against the assessment and against the order refusing to renew the registration.

95. On 20th April, the petitioners' firm applied to the Income-tax Officer for granting them sufficient time to consider the matter and for payment of the legitimate tax. But that was refused by the Income-tax Officer. Thereafter an application was filed under Section 45 of the Specific Relief Act for cancelling the notice of demand and for directing the Income-tax Officer to forbear from taking further steps. Bose, J. held in the circumstances of that case that it was a fit case for mandamus and quoted with approval the following observation of Cairns, L.C in Julius v. Bishop of Oxford, (1880) 5 AC 214 at p. 222:

“They confer a faculty or power and they do not themselves do more than confer a faculty or power. But there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so.”

96. Bose, J. observed that the discretion was conferred on the Revenue Authority, but if in proper cases he did not exercise that power he could he compelled to do so by in order under Section 45 of the Specific Relief Act. The decision of Bose, J. was reversed in appeal on the ground that no appeal had been filed against the order of assessment. This case, however, is an authority for the proposition that the discretionary power conferred upon an Income-tax Officer is coupled with the duty and if he did not exercise it when the occasion called for it, or if he exercised it in a manner that it is no exercise of discretion at all he could be compelled co-discharge his duty.

97. The next case referred to is the case of Sreeramamurthy v. Income-tax Officer, reported in AIR 1957 Andh Pra 114. In the Andhra case, Ramaswami, J. had dismissed the petition filed by the assessee for quashing the proceedings taken under the Revenue Recovery Act for the sale of the properties and for stay. An appeal was filed to a Bench of two Judges against the aforesaid decision which was rejected. The matter has no doubt been exhaustively dealt with in this case and interpreting Section 45 of the Income-tax Act it was held that the discretion of the Income-tax Officer could not be said to be a limited one.

98. The section no doubt does not give an absolute right to an assessee who has preferred an appeal to get an order from the Income-tax Officer treating him as not in default pending the appeal independently of the judgment or discretion of the Officer. But if any Income-tax Officer declines to hear and consider the application of the assessee under Sec. 45 for an order for stay, he fails to perform a duty cast upon him by the section which is enforceable by a mandamus. The Income-tax Officer has no free option or absolute and uncontrolled discretion in this matter, but is bound to receive, consider and give his decision on an application by an assessee invoking his jurisdiction under Sec. 45. Where the Officer has considered the application but in the exercise of his discretion has refused the application in those cases also if the Officer has given no reasons at all for rejecting the application, he may be required to take up the application and dispose it of by giving the assessee an opportunity to be heard and giving reasons for his decision.

99. Where the Income-tax Officer in refusing the assessees application has allowed himself to be influenced by irrelevant and extraneous matters in point of fact he has exercised no discretion of has exceeded his jurisdiction, and the High Court can interfere by a writ. There may be cases where the exercise of discretion by the Income-tax Officer is so arbitrary and capricious that no reasonable man would have acted likewise. It is no exercise of discretion at all, and in suet cases too the High Court might interfere.

100. The Advocate General relied on the case of Lord Krishna Sugar Mills Ltd. Saharanpur v. Income-tax Officer, Ambala reported in AIR 1953 Punj 113. There the petitioners were assessed to income-tax and a tax of Rs. 3 lacs and odd was imposed on them. The notice of demand was sent to them on 6th October, 1951 and an application was made under Section 27 of the Income-tax Act for cancellation of the assessment. On the 17th November, 1951 that was dismissed and an appeal was taken to the Appellate Commissioner In May, 1952, an appeal was filed before the Income-tax Appellate Tribunal which was pending. As against the original order of assessment, all appeal was taken to the Appellate Assistant Com missioner in October, 1951 and an application was made to the Income-tax Officer under Sec. 45 of the 26th October, 1951. The Income-tax Office considered the tax to be paid in monthly instalments. But as nothing was paid, a penalty of Rs. 20,000/- was imposed.

101. A time was then given till the 10th March, 952 and extended further to 20th March, 1952. An interim order of stay was obtained by the assessee from the Central Board of Revenue which was also allocated on the 19th June, 1952. The assessee was then finally asked to pay the amount by 8th July, 1952 and the writ was filed in the High Court in the 9th July. The assessee had approached the Income-tax Officer again on the 8th July for stay of the recovery and the Commissioner again fixed instalments, the last of which was to be paid in the 31st March, 1953. Under those circumstances, the High Court held that there was no case for the issue of a writ of mandamus directing the Income-tax Officer to exercise his discretion in favour of the assessee under Section 45.

102. The next case relied upon is the case of Goverdhan Lal Jagdish Kumar v. Commr. of Income-tax, U.P Lucknow reported in AIR 1956 All. 130. That happens to be my judgment and in the circumstances of that case the writ was refused. It was held in that case that the filing if an appeal does not amount to an automatic stay of the realisation of the tax amount. It is discretionary with the Income-tax Officer not to consider an assessee a defaulter. There may however, be cases where the exercise of discretion may be regarded as capricious or arbitrary and unreasonable and this Court may in those circumstances direct the Income-tax Officer to consider the matter and exercise his discretion.

103. In the appeal filed against the judgment of Bose, J. in the Calcutta case, it was observed by Harris, C.J that once an appeal was filed, it would be for the Income-tax Officer then to consider whether in the particular circumstances, it would be just and proper to treat them as defaulters. If for example, the questions involved in he appeal were difficult and the prospects of success in the appeal were bright, it would be a very bold Income-tax Officer who could hold that he assessees were defaulters. The matter however, ??? in his discretion having regard to the circumstances of the case. In the case of Kashiram Agarwalla v. Collector of 24-Parganas, reported in AIR 1958 Cal. 524, it was observed by Das Gupta, J. that whether or not an assessee would be considered to be in default after an appeal is filed against the assessment, is a matter entirely in he discretion of the Income-tax Officer, who has however, to exercise his discretion after due regard to the circumstances of the case.

104. If in a particular case, the question of exercise if discretion has not been considered properly by he Income-tax Officer, that might be a good ground or issuing a writ directing him to treat the assessee to be not in default. In the case of Aluminium Corporation of India Ltd. v. C. Balakrishnan, reported in AIR 1959 Cal. 114, this interpretation if the law was accented by Sinha, J. There an appeal had been preferred under Section 23 of the Wealth Tax Act and thereafter an application had been made to the Wealth Tax Officer for stay under Section 31(3) of the Act corresponding to Section 45 of the Income-tax Act. An application was made to the Commissioner of Wealth Tax praying for a direction not to treat the assessee to be to default till the disposal of the appeal which was rejected by him.

105. A similar application was then made before the Wealth Tax Officer which was also rejected by him. The petition under Article 226 of the Constitution was filed to the High Court against that order which was allowed and the matter was sent back to the Wealth Tax Officer directing him to consider the matter on merit. It was observed by Sinha, J. that the matter was no doubt in the discretion of the Wealth Tax Officer, but the discretion had to be exercised judicially and a judicial exercise of the discretion involves a consideration of the facts and circumstances of the case in all its aspects. The difficulties involved in the issues raised in the case and the prospects of the appeal being successful is one such aspect. The position and economic circumstances of the assessee is another. If the Officer feels that the stay would put the realisation of the amount in jeopardy that would be a cogent factor to be taken into consideration. The amount involved is also a relevant factor. If it is a heavy amount, it should be Presumed that immediate payment, pending an appeal in which there may be a reasonable chance of success, would constitute a hardship. Quick realisation of tax may be an administrative expediency, but by itself it constitutes no ground for refusing a stay. While determining such an application, the authority exercising discretion should not act in the rule of a mere tax gatherer.

106. After having considered all the authorities, in my opinion, each case will depend upon its own circumstances. The extreme proposition that Section 45 confers a power on the Income-tax Officer to stay realisation of the tax dues when an appeal has been filed is a power coupled with the duty to grant such a stay whenever such an occasion arises, cannot be accepted. Sec. 45 gives discretion to the Income-tax Officer not to treat the assessee as a defaulter. It may be that it casts a duty upon the Income-tax Officer to consider such a prayer if made by the assessee on its own merits and to exercise his discretion judicially. It is very difficult to exhaustively lay down the circumstances under which the exercise of discretion can be said to be a judicial exercise. But there are certain relevant considerations which go to point out if the exercise of the discretion has or has not been judicial.

107. It will really be a non-exercise of the discretion. If the Income-tax Officer has not considered the application at all or in considering the application has taken into consideration matters which are extraneous to the object of the Act, or has failed to apply his mind to the relevant considerations. In such cases the exercise of his discretion may be considered to be no exercise of discretion at all and the High Court can issue a mandamus directing him to consider the application or to exercise his discretion according to law. The exercise of discretion in such cases, is capricious, arbitrary and unreasonable. The extreme proposition contended for by the Advocate General that once an assessee has failed to pay up the tax demand, he is a defaulter and the Income-tax Officer is bound to proceed with the realisation of the tax, and if he has acted within the ambit of his jurisdiction, this Court cannot interfere with the exercise of his discretion and issue a mandamus directing him to stay the realisation, can also not be accepted.

108. Examining the facts of the present case in the light of the observations made above, it will appear that the order passed by the Income-tax Officer; refusing the prayer of the petitioner contains no reasons. No opportunity was given to the petitioner to explain the circumstances under which he was unable to pay up the tax demand within such a short time. The application was made on the 16th April, 1959. The best judgment assessment had been made on the 14th March and on the same date demand notice had been issued. In the appeal filed against the assessment there were substantial questions to be determined. It was, therefore, a fit case where the Income-tax Officer should have applied his mind to the facts before exercising his discretion after giving an opportunity to the assessee to explain his position. The Income-tax Officer in effect did not exercise his discretion at all and acted in an arbitrary manner in disposing of the application of the assessee under Section 45 of the Act.

109. Even in these proceedings, no counter affidavit has been filed stating that the Income-tax Officer considered the circumstances pointed out in the counter affidavit or in the order of the Commissioner justifying the refusal to exercise the discretion given to the Income-tax Officer under Sec. 45. As I have pointed out earlier the Commissioner could not substitute his discretion to that of the Income-tax Officer, and any proceedings before the Commissioner or opportunity given by him to the assessee are not relevant in considering the validity of the order passed by the Income-tax Officer.

110. The petitioner is, therefore, entitled to a mandamus directing the Income-tax Officer to exercise his discretion under the proviso to Sec. 45 treating the assessee as not a defaulter. In fact, in the view which we have taken that the order of assessment under Sec. 23(4) cannot be maintained it was not necessary to go into this matter; but as the point was canvassed I have considered it.

111. A number of points were raised challenging the constitutionality of the provisions of Sec. 46(5)(a) on the ground that it infringes Articles 19 and 14 of the Constitution. I do not think however, that there is any substance in those points. We have already elaborately dealt with this matter in the case of Murlidhar Jalan v. Income-tax Officer Dibrugarh, Civil Rule No. 29 of 1959 decided on 18-7-59: (AIR 1960 Assam 76) and it is not necessary, therefore, to go into detail and examine the various submissions made in this behalf. In the result, therefore, we allow this petition quashing the order of assessment and issue a writ of mandamus directing the opposite party not to give effect to that order with costs which we assess to be Rs. 250.

112. C.P Sinha, C.J:— I agree.

ED/V.B.B

113. Petition Allowed.