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Seth Harish Chandra v. Union Of India
Factual and Procedural Background
Messrs. Model Food Dehydrating Company, Shidipura, Delhi (an unregistered firm) was assessed to income-tax for the assessment years 1942-43 and 1943-44 by the income-tax authorities on 28 February 1947 and 25 March 1948 respectively (assessment orders exhibited as D-1 and D-2). In those assessment orders Sohan Mal Golcha was shown as one of the partners. The tax due for the two years was Rs. 1,34,486-10-0.
Because partners are jointly and severally liable, the Income-tax Officer issued a recovery certificate directing the Special Assistant Collector, Delhi, to recover the amount from Sohan Mal Golcha. Sohan Mal Golcha filed a writ petition under article 226 in the Punjab High Court at Simla challenging the recovery; that petition was dismissed on 30 July 1951. He petitioned the Supreme Court under article 32, which was dismissed on 11 November 1952.
After giving the notice required by section 80 of the Civil Procedure Code, Sohan Mal Golcha (plaintiff) filed the present suit against the Union of India on 15 September 1953 seeking a declaration that, not being a partner of the assessee firm, he could not be proceeded against for recovery of the tax, and seeking an injunction restraining demand or recovery; alternatively he sought a declaration that assessment and recovery proceedings, insofar as they affected him, were illegal, ultra vires, collusive and mala fide.
The defendant raised a preliminary objection that the suit was barred by the provisions of section 67 of the Indian Income-tax Act. Both lower courts upheld that objection and dismissed the suit. During the litigation the original plaintiff Sohan Mal Golcha died; his son Harish Chander Golcha was substituted as legal representative and filed the second appeal in this Court.
Legal Issues Presented
- Whether the present suit is barred by the provisions of section 67 of the Indian Income-tax Act, 1922.
Arguments of the Parties
Appellant's Arguments
- The suit was not, in substance, a proceeding to set aside or modify an assessment made under the Income-tax Act and therefore was not barred by section 67.
- The assessment orders were without jurisdiction as to the appellant because: (a) he was not served in his capacity as a partner under section 20(2)/34 — notices were sent "care of" him; and (b) in fact he was not a partner of the firm.
- Alternatively, no assessment could properly be made more than one year beyond the date of the alleged service of the notice; such an assessment, the appellant argued, could not be called "an assessment made under the Act".
- No notice of demand under section 29 had been served on the appellant, and so recovery proceedings could not validly be taken against him.
- The assessment orders were mala fide, fraudulent and collusive — alleged misrepresentations by Shri Bhagwan (one of the partners) induced the income-tax authorities to assess the appellant; therefore civil courts had jurisdiction to try the suit on those grounds. The appellant contended that, for maintainability, only the allegations in the plaint needed to be examined.
- Reliance was placed on several authorities (notably as to challenges to vires or illegal threats of assessment) including State of Tripura v. Province of East Bengal, Himmatlal Harilal Mehta v. State of Madhya Pradesh and S. C. Prashar v. Vasantsen Dwarkadas.
- It was also contended (as submitted to the Court) that the Supreme Court judges in disposing of the earlier writ petition had observed that the proper remedy might be to file a regular suit.
Respondent's Arguments
- The suit is barred by section 67 of the Income-tax Act because, in substance, a decree in favour of the plaintiff would have the effect of setting aside or modifying assessment orders made under the Act.
- The income-tax authorities are empowered under the Act (including sections such as 3, 23(5), 26 and 44) to determine partners and fix liability; procedural matters like service of notices fall within the machinery of the Act (e.g., section 63) and errors or irregularities must be corrected within the Act's appellate/review framework rather than by civil suit.
- Reliance was placed on authorities (e.g., Kalwa Devadatham v. Union of India; Secretary of State for India v. V. M. Meyyappa Chettiar; C. A. Abraham v. Income-tax Officer, Kottayam) holding that where the Income-tax Act provides a complete remedy and machinery, the civil courts cannot be resorted to for setting aside or questioning assessments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Raleigh Investment Co. Ltd. v. Governor-General in Council | Defines the phrase "assessment made under this Act" as an assessment originating from the assessing officer acting as such; the test is the use of machinery provided by the Act, not the accuracy of the result. | The Court relied on this definition to hold that the impugned assessments were "assessments made under the Act" even if erroneous; thus they fall within the prohibition of section 67. |
| State of Tripura v. Province of East Bengal | Where a person has been served with a notice calling for a return of income, he may file a suit challenging the vires of the provision under which he is sought to be assessed (no assessment had yet been made in that case). | The Court observed this decision distinguished Raleigh and held that it allows suit pre-assessment; but held the facts of State of Tripura are clearly distinguishable from the instant case, so it did not assist the appellant. |
| Himmatlal Harilal Mehta v. State of Madhya Pradesh | Recognises that a person challenging the vires of taxing provisions may proceed by writ petition and need not be limited to the machinery provided by the taxing statute. | The Court noted this modifies Raleigh in certain contexts but held it did not apply to the facts of the present case. |
| S. C. Prashar v. Vasantsen Dwarkadas | Where only a notice under section 34 (for return) had been issued and no assessment made, the assessee could challenge the competency of the authority by writ petition. | The Court stated this authority distinguished Raleigh but found it not helpful to the appellant because, here, final assessments had been made. |
| Johilla Coalfields Co. Ltd. v. Commissioner of Income-tax | Held an original assessment invalid where not made within one year from the date of service of the notice (decision given on reference under section 66(1)). | The Court observed this case concerned a reference under section 66(1) and did not involve the question whether a civil suit could be filed; it was therefore inapplicable to the present suit. |
| Moti Lal Purshottam Das v. Income-tax Officer, Kanpur | Held that recovery proceedings cannot be taken against a person under the Income-tax Act unless a notice of demand is first served on that person. | The Court considered this distinguishable because in the instant case a notice had been given to one partner and, under section 63 and related provisions, such notice may be effective against other partners; also those decisions were in the context of writ petitions rather than a regular civil suit. |
| T. Govindaswamy v. Income-tax Officer, Special Survey Circle, Bangalore | Similar principle: service of notice of demand is a prerequisite to recovery proceedings under the Act. | The Court treated it as distinguishable on the same grounds as Moti Lal Purshottam Das, noting notice to one partner can suffice under the Act. |
| E. M. Muthappa Chettiar v. Income-tax Officer, Special Circle, Coimbatore | Illustrates that notice to one partner may be tantamount to notice to other partners and that other partners may be "assessees in default" and amounts due may be "arrears" under relevant sections. | The Court relied on this to support the proposition that notice to one partner can suffice for recovery against other partners under sections 63/46 of the Act. |
| Lahore Electric Supply Co. Ltd. v. Province of Punjab | Full bench decision where an executive order under the Defence of India Act was challenged in civil court; no elaborate appeal machinery existed under that Act. | The Court held this authority distinguishable because, unlike the Income-tax Act, the Defence of India Act lacked an elaborate internal machinery of appeal/review; hence it did not help the appellant's case. |
| Kailash Nath v. State of U. P. | Where a tax is levied without due legal authority and it infringes the right to carry on trade, the aggrieved may seek a writ (article 32) invoking article 19(1)(g). | The Court noted the principle but found it irrelevant to the present facts. |
| Sardara Singh v. Custodian, Muslim Evacuees Property | Where a quasijudicial officer ignores a mandatory rule, he acts without jurisdiction and his order may be quashed under article 226. | The Court stated this authority has no application to the facts of the instant case. |
| Rayalseema Constructions v. Deputy Commercial Tax Officer, Mannady Division, Madras | Emphasises that mistakes by administrative officers are ordinarily corrected by the statutory remedies of appeal/reference/revision; where an officer acts outside jurisdiction his acts are null and void and the citizen may seek High Court relief (e.g., under article 265). | The Court observed that this authority did not involve the question of filing a suit in a civil court and thus did not support the appellant's position. |
| Kalwa Devadatham v. Union of India | Where an assessee fails to pursue the remedies provided in the Income-tax Act, he cannot resort to a civil court to question the correctness of an assessment. | Relied upon by the respondent; Court accepted the principle as supportive of the position that the statutory machinery must be used. |
| Secretary of State for India v. V. M. Meyyappa Chettiar | Matters left to the Income-tax authorities under the Act cannot be questioned by suit in a civil court; the test is whether the authority had power to enter on the enquiry, not whether its conclusions were true or false. | Relied upon by the respondent and cited by the Court to support the conclusion that statutory machinery is exclusive for review of such assessments. |
| Reg. v. Bolton | Test of jurisdiction is whether the authority had the power to enter upon the enquiry, not whether its conclusions were true or false. | Quoted (with approval in the Secretary of State case) and used in the Court's analysis of the proper jurisdictional test in revenue enquiries; the Court cited it indirectly as authority for the jurisdictional test. |
| C. A. Abraham v. Income-tax Officer, Kottayam | The Income-tax Act provides a complete machinery for assessment and penalties and for relief from improper orders; a taxpayer cannot abandon that machinery and invoke writ jurisdiction where an adequate statutory remedy (e.g., appeal to the Appellate Tribunal) exists. | Relied upon by the respondent; the Court accepted the proposition that statutory remedies must be pursued rather than instituting a civil suit. |
Court's Reasoning and Analysis
The Court opened by identifying the single question for decision — whether the suit was barred by section 67 of the Income-tax Act. The Court proceeded by a textual and functional reading of section 67, which provides that "No suit shall be brought in any civil court to set aside or modify any assessment made under this Act...".
The Court reasoned that although the plaintiff's pleadings sought declarations and injunctions rather than an express order setting aside the assessments, a decree in his favour would, in substance, have the effect of setting aside the assessment orders passed against him. Therefore the suit, in substance, sought to set aside or modify assessments and was barred by section 67.
On the appellant's contention that the assessments were without jurisdiction because he was not properly served or was not a partner, the Court observed that the Income-tax authorities are empowered by sections of the Act (specifically sections 3, 23(5), 26 and 44 were referred to) to determine partners and fix liability. The procedure for service of notices is governed by section 63 and it was for the income-tax authorities to ensure proper service. The appellant had produced notices addressed to him (under sections 22(4) and 37) and the assessment orders themselves recorded that the authorities had served and assessed him after enquiries.
As to the time-limit contention under section 34(3) (that an assessment could not be made beyond one year after service of notice), the Court noted the procedure and period contained in that section and observed that this point had not been argued before the Senior Subordinate Judge. The Court emphasised that where income-tax authorities have the statutory power to make assessments and the machinery for review and appeal exists under the Act, mistakes of fact or law by those authorities should be corrected by the appellate and review mechanisms provided by the Act rather than by a civil suit.
The Court addressed the objection based on absence of a notice of demand under section 29 by noting that this objection had not been taken below or in the grounds of appeal; further, section 63(2) permits a notice to be addressed to any member of a firm, and issues about procedural irregularities could be agitated before the authorities designated by the Act. The Court reiterated that procedural irregularities do not render an order beyond jurisdiction unless there is an inherent lack of jurisdiction or the provisions of the Act are alleged to be ultra vires the Constitution — in such exceptional cases civil courts or writ jurisdiction might be invoked.
Regarding allegations of mala fides, fraud and collusion, the Court observed these had been urged at trial but not pressed before the lower appellate court; the trial court had found against the appellant on those allegations. The Court found the full-bench authority relied upon by the appellant (Lahore Electric Supply Co. Ltd. v. Province of Punjab) distinguishable because that case concerned an Act lacking an elaborate appeal/review machinery; the Income-tax Act does provide such machinery. Thus, allegations of mala fides should be pursued under the statutory framework rather than by a civil suit.
The Court further noted that even if the plaint's allegations were accepted for present purposes, this was not a case appropriate for trial in a civil court; the proper course was to use the statutory remedies, and, if dissatisfied on questions of law, to seek reference by the Appellate Tribunal to the High Court under section 66.
The Court also observed that no copy of the Supreme Court judgment (allegedly directing the appellant to file a suit) had been placed on the record and that the point had not been taken in the lower courts.
Finally, the Court rejected the appellant's contention that Raleigh Investment Co. Ltd. no longer represented good law after the coming into force of article 265 of the Constitution; the Court treated the appellant's authorities as inapposite to the facts and circumstances of this case and concluded that the statutory machinery of the Income-tax Act was the appropriate forum for redress.
Holding and Implications
APPEAL DISMISSED
Holding: The Court held that the present suit is barred by section 67 of the Income-tax Act because the substantive effect of the relief sought would be to set aside or modify assessments made under the Act. The appeal was therefore dismissed.
Immediate consequences: The dismissal means the civil suit could not be maintained in the courts; the appropriate remedy for grievances about the assessments and procedural matters lies within the Income-tax Act's internal machinery (appeals, revisions, and, where appropriate, references of questions of law to the High Court under section 66). The Court directed that, in the peculiar circumstances of the case, the parties should bear their own costs.
The opinion does not announce any new legal principle beyond the application of section 67 and existing precedents; the decision applies the established rule that where the Income-tax Act provides a complete statutory machinery for assessment and review, civil courts are ordinarily precluded from entertaining suits that in substance seek to set aside or modify assessments.
The only question for decision in this case is whether the present suit is barred by the provisions of section 67 of the Indian Income-tax Act, 1922.
Messrs. Model Food Dehydrating Company, Shidipura, Delhi, admittedly an unregistered firm, was assessed to income-tax for the assessment year 1942-43 and 1943-44 by the income-tax authorities on 28th February, 1947, and 25th March, 1948, vide assessment orders exhibits D-1 and D-2, respectively. In these assessment orders Sohan Mal Golcha was shown as one of the partners of this firm. The tax due from this firm for these two assessment years was Rs. 1,34,486-10-0. All the partners of the firm being jointly and severally liable for this tax, the Income-tax Officer issued the recovery certificate asking the Special Assistant Collector, Delhi, to recover this amount from Sohan Mal Golcha. Thereupon, Sohan Mal Golcha filed the writ petition under article 226 of the Constitution of India challenging this recovery in the Punjab High Court at Simla, and the same was dismissed on 30th July, 1951. Thereafter, he moved the Supreme Court by a petition under article 32 of the Constitution of India, which was also dismissed on 11th November, 1952. After giving the required notice under section 80, Civil Procedure Code, the present suit was filed by him against the Union of India on 15th September, 1953, for a declaration that the plaintiff not being a partner of the assessee firm could not be proceeded against for the recovery of the tax. In this suit he also claimed an injunction restraining the defendant from demanding or recovering the said tax from him. In the alternative, declaration was claimed that the assessment and recovery proceedings, in so far as they affected him, were illegal, ultra vires, collusive and mala fide and were, consequently, ineffective and inoperative against him.
A preliminary objection was taken by the defendant that the suit was barred under the provisions of section 67 of the Indian Income-tax Act. This objection found favour with both the courts below and the suit was, consequently, dismissed.
It may be mentioned that Sohan Mal Golcha died during the pendency of the litigation before the lower appellate court and his son, Harish Chander Golcha, was substituted in his place as his legal representative and he has filed the present second appeal in this court.
Learned counsel for the appellant strenuously urged that the present suit was not for setting aside or modifying any assessment made under this Act and was, therefore, not barred by the provisions of section 67 of the Act. He further submitted that the assessment orders passed by the income-tax authorities were without jurisdiction so far as Sohan Mal Golcha was concerned, because (a) he was not served in his capacity as a partner of this firm with a notice under section 20(2)/34 of the Act since the same was sent to the firm "care of" him and, in fact, also he was not a partner of this firm, and (b) in any case, no assessment could be made one year beyond the date of the alleged service of this notice and such an assessment could not be called "an assessment made under the Act". He also urged that no notice of demand under section 29 of the Income-tax Act having been served on the appellant, no recovery proceedings could have been taken against him. He also contended that the assessment orders passed by the income-tax authorities were mala fide, fraudulent and collusive because Shri Bhagwan, one of the partners of the firm, had made misrepresentations to the income-tax authorities and got these orders of assessment passed against the appellant fraudulently and as such the civil courts had jurisdiction to try the suit. For the determination of the question of the maintainability of the suit, only his allegations in the plaint had to be seen. Lastly, the leaned counsel submitted that the honble judges of the Supreme Court, while disposing of the writ petition, had observed that the proper remedy of the appellant was to file a regular suit.
Section 67 lays down :
"No suit shall be brought in any civil court to set aside or modify any assessment made under this Act, and no prosecution, suit or other proceeding shall lie against any officer of the Government for anything in good faith done or intended to be done under this Act."
A bare reading of this section would show that the civil courts cannot entertain any suit in which the relief claimed is the setting aside or modification of any assessment order made under the Act. The contention of the appellant that the present suit was not for setting aside or modifying the assessment orders is not correct, because, in reality, if his suit is decreed, the result would be that the assessment orders passed against him would have to be set aside. Though in form the relief claimed does not profess to modify or set aside the assessment, in substance, it does. As such, the provisions of section 67 of the Act would be attracted and the suit would be barred.
As regards the contention that the assessment orders were without jurisdiction on the grounds mentioned above, there is no force in the same because the income-tax authorities by virtue of the provisions of section 3,23(5),26 and 44 of the Income-tax Act are authorised to determine the partners of the assessee firm and fix their liability.
The procedure regarding service of notices is given in section 63 of the Act. It was for the income-tax authorities to see whether proper service had been effected or not. Besides, the appellant himself has produced notices under section 22(4) and 37 of the Act, dated 24th January, 1948, and 5th February, 1945, which were addressed to him. Moreover, the assessment orders show that, according to the income-tax authorities, the appellant was duly served and assessed to income-tax as a partner of the firm, after making the necessary enquiries.
The procedure regarding the income escaping assessment is given in section 34(3) of the Act and the income-tax authorities are empowered to make the assessment within the period prescribed in this section. It may also be mentioned that this point was not argued before the learned Senior Subordinate Judge, as would be clear from paragraph 6 of his judgment.
Thus, it would be seen that the income-tax authorities were authorised to deal with all these matters. If the Income-tax Officer had, according to the appellant, made some mistakes in arriving at a decision either on fact or in law on any of these points, he could go up in appeal to the higher authorities provided under the Act, in which effective and appropriate machinery is provided for the review of any assessment. It cannot be said that where an assessment is erroneous or wrong, a suit can be brought in the civil courts to set aside or modify the assessment.
There is no merit in the contention that the assessment made by the income-tax authorities could not be called "an assessment made under the Act" because the meaning of the phrase "assessment made under this Act" is :
"... an assessment finding its origin in an activity of the assessing officer acting as such.... 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 (vide Raleigh Investment Co. Ltd. v. Governor-General in Council).
Regarding the contention that no demand notice was issued under section 29 of the Act, it may be mentioned that this objection was not raised in any of the courts below. It has not even been taken in the grounds of appeal filed in this court. Besides, under section 63(2) of the Act, a notice under the Act could be addressed to any member of the firm. Moreover, this matter could also be agitated by the appellant before the higher authorities provided under the Act. The jurisdiction of the civil courts cannot be invoked for the purpose of correcting procedural irregularities committed by the income-tax authorities in the assessment and recovery proceedings under the Act. For this purpose, the aggrieved party should knock at the door of the higher authorities provided under the Act itself. It cannot be said that such like irregularities would make the orders of the authorities without jurisdiction. Even if the income-tax authorities make mistakes either on fact or in law, the proper forum for curing the defects is the one provided under the Act itself. It is not where there is inherent lack of jurisdiction or the provisions of the Act itself are alleged to be ultra vires of the Constitution that a litigant can go to the civil court and seek redress of his grievance.
As regards the contention that the impugned assessment orders passed by the income-tax authorities were mala fide, fraudulent and collusive, this point also does not seem to have been raised before the lower appellate court though it was urged before the trial court and the finding on the same was against the appellant. Reliance for this submission was made on a full bench decision in Lahore Electric Supply Co. Ltd. v. Province of Punjab. That case, however, is distinguishable because there an executive order under the defence of india act was sought to be challenged in the civil court. Unlike the Income-tax Act, no elaborate machinery by way of appeal, revision, etc., for the redress of grievances was provided under the defence of india act. In the present case, the appellant could file an appeal before the income-tax authorities and could agitate this point there. His remedy does not lie by way of a suit in a civil court.
Even if the allegations in the plaint are seen as alleged by the learned counsel for the appellant, I am of the view that this is not a case which should be tried by a civil court. All the points raised by the plaintiff appellant should have been agitated before the higher authorities provided under the Act itself. In case he was still dissatisfied with their decision on any point of law, he could ask the Appellate Tribunal to refer the question of law to the High Court under section 66 of the Act.
Regarding the last contention, no copy of the judgment of the Supreme Court has been produced on the record to show that the learned judges had directed the appellant to file the present suit. Moreover, this point also was not taken in any of the courts below.
Learned counsel for the appellant submitted that the case of Raleigh Investment Co. Ltd. v. Governor-General in Council, on which reliance had been placed by both the courts below, did not lay down good law after the coming into force of the provisions of article 265 of the Constitution, which says that no tax shall be levied or collected except by authority of law. In this connection, he cited a number of authorities, but mainly relied on State on State of Tripura v. Province of East Bengal; Himmatlal Harilal Mehta v. State of Madhya Pradesh and S. C. Prashar v. Vasantsen Dwarkadas.
In the State of Tripura v. Province of East Bengal it was held that where a person had been served with a notice calling for a return of income, it was open to him to file a suit for a declaration that the provision of law, under which he was sought to be assessed, was ultra vires and void and for a perpetual injunction to restrain the State and the taxing authority from taking any steps to assess him. In this case, the decision of the Privy Council in the case of Raleigh Investment Co. Ltd. was distinguished and it was held that such a suit was not a suit to set aside or modify an assessment, because no assessment had yet been made when the suit was instituted. The decision of the Supreme Court, it is true, has considerably whittled down the effect of the Privy Council decision in Raleigh Investment Co. Ltd.s case because, according to the learned judges, a suit could be filed in a civil court if illegal and unauthorised assessment proceedings were started against the plaintiff by the income-tax authorities. It may, however, be mentioned that the rule of law laid down by the Supreme Court does not help the appellant as the facts of the instant case are clearly distinguishable.
Himmatlal Harilal Mehta v. State of Madhya Pradesh was a case in which Explanation II to section 2(g) of the Central Provinces and Berar Sales Tax Act (21 of 1947), as amended by Act 15 of 1949, was challenged by a writ petition as being ultra vires the State Legislature and the learned judges of the Supreme Court did not follow Raleigh Investment Co. Ltd.s case. The rule of law laid down in Raleigh Investment Co. Ltd.,s case had been modified to this extent, that a person who challenges the vires of the Act, under which action is taken by the authorities, can file a writ petition and is not bound to use the machinery expressly provided under the Act for this purpose. It may again be mentioned that this authority does not apply to the facts of the present case.
In S. C. Prashar v. Vasantsen Dwarkadas no assessment had yet been made, but only a notice under section 34 of the Income-tax Act for filing a return had been issued and the assessee, immediately on the receipt of the notice, challenged the competency of the authority of the Income-tax Officer to take any assessment proceedings pursuant to that notice by means of a writ petition in the High Court. In this authority, Raleigh Investment Co. Ltd.s case was distinguished and reliance was placed on State of Tripura v. Province of East Bengal for holding that an illegal threat to assessment could be challenged otherwise than by the machinery provided by the Income-tax Act. It would be seen, therefore, that this case also does not help the appellant.
In support of his other submissions, learned counsel for the appellant further relied on Johilla Coalfields Co. Ltd. v. Commissioner of Income-tax, Moti Lal Purshottam Das v. Income-tax Officer, Kanpur, T. Govindaswamy v. Income-tax Officer, Special Survey Circle, Bangalore, Kailash Nath v. State of U. P., Sardara Singh v. Custodian, Muslim Evancuees Property and Rayalseema Constructions v. Deputy Commercial Tax Officer, Mannady Division, Madras.
In Johilla Coalfields Co. Ltd. v. Commissioner of Income-tax, it was held that the original assessment was invalid since it was not made within one year from the date of the service of the notice. It would be seen that this decision was given by the High Court on a reference under section 66(1) of the Income-tax Act and the question of filing a suit in a civil court regarding this matter was not involved in this authority and as such it has no application to the facts of the present case.
In Moti Lal Purshottam Das v. Income-tax Officer, Kanpur and T. Govindaswamy v. Income-tax Officer, Special Survey Circle, Bangalore, it was held that no recovery proceedings could be taken against a person under the Income-tax Act unless first a notice of demand was served on that person. These authorities are distinguishable on the ground that the notice of demand in the instant case was, at any rate, given to one partner of the firm and such a notice was tantamount to a notice served on the other partners by reason of section 63 of the Act and the other partners would be "assessees in default" within section 46(1) of the Act and amount of tax and penalty due from them would be "arrears" within section 46(2) of the Act (vide E. M. Muthappa Chettiar v. Income-tax Officer, Special Circle, Coimbatore). Moreover, these decisions were given in writ petitions and not in a regular suit like the present one.
In Kailash Nath v. State of U. P. it was observed that if a tax was levied without due legal authority on any trade or business, it was open to the citizen aggrieved to approach the Supreme Court for a writ under article 32 of the Constitution, since his right to carry on a trade was violated or infringed by the imposition and such being the case, article 19(1)(g) of the Constitution came into play. This has nothing to do with the facts of the present case.
In Sardara Singh v. Custodian, Muslim Evacuees Property it was held as under :
"Though a Custodian of evacuee property appointed under the Act cannot be described as a court of law, his functions are quasijudicial and it is incumbent upon him to follow the provisions of law as well as the rules that have the force of law. Consequently, when he ignores a mandatory rule, that is, rule 14(4) and cancels or varies and allotment without giving notice to the persons likely to be affected by his order, he acts without jurisdiction and his order must be quashed under article 226 of the Constitution."
This authority has no application to the facts of the present case.
In Rayalseema Constructions v. Deputy Commercial Tax Officer, Mannady Division, Madras it was held :
"Laws have to be worked through human agency, and men are liable to err. The Constitution does not guarantee that the persons employed to administer the law will not make mistakes when exercising the powers conferred on them. If they make mistakes in the exercise of their powers, the persons affected must ordinarily use the remedies of appeal, reference or revision, as the case may be. But, where there is an absence of jurisdiction, the situation is materially altered. And, it would not make any difference whether the absence of jurisdiction arises out of an attempt to usurp jurisdiction or because the officer has through ignorance or otherwise strayed beyond the limits of his jurisdiction. In relation to a tax, where an assessing officer acts outside the boundaries of his jurisdiction, his acts would to that extent be null and void. No one would have any power to call upon a citizen to make payment of a tax so imposed and, if any authority seeks to collect a tax so imposed, the citizen can call in aid article 265 and seek the assistance of the High Court."
It is clear that the question of filing a suit in a civil court was not involved in this authority.
In may be mentioned that no authority has been cited by the learned counsel for the appellant in which it was held that in similar circumstances a suit could be filed by the aggrieved party in a civil court. It is beyond dispute that the powers of the Supreme Court and the High Courts in matters of issuing writs in exercise of their special jurisdiction are very wide. From this, it does not follow that the civil courts have got the jurisdiction to try all suits, including those the jurisdiction of which has been specifically or impliedly taken away by any statute.
Learned counsel for the respondent, on the other hand, inter alia, relied on Kalwa Devadatham v. Union of India, Secretary of State for India v. V. M. Meyyappa Chettiar and C. A. Abraham v. Income-tax Officer, Kottayam.
In Kalwa Devadatham v. Union of India it was held :
"If the assessee has failed to pursue the remedies provided in the Income-tax Act against an assessment he cannot resort to a civil court for questioning the correctness of that assessment.
In Secretary of State for India v. V. M. Meyyappa Chettiar also it was held :
"In respect of matters which the Income-tax Act has left to be determined by the Income-tax authorities their decision cannot be questioned by a suit in the civil court.
The plaintiff who was assessed to income-tax in British India on the income received by him from his business in Saigon (Burma) instituted a suit for a declaration that he was not liable to be assessed under the Indian Income-tax Act inasmuch as he was not a resident of British India but was permanently residing in French territory when the income accrued to him. The income-tax authorities had found after proper inquiry that he was residing in British India during the period in question and had assessed him to income-tax accordingly : Held, that the assessing authorities had power to determine the question whether the plaintiff resided in British India, and as they had found after due enquiry that he was a resident of British India, the civil court had no jurisdiction to entertain the suit. Held, further, that the fact that the assessee had been assessed under section 23(4) and had no other remedy would not give him a right to maintain a suit of this nature in the civil court."
It was also observed at page 344 :
"............it seems to me unwarranted to assume that in all cases in which a prerogative writ can, according to those observations, issue from a superior court, there must also exist a right of civil suit in the ordinary courts of the land."
On the very page, the learned judges approved of the following observations :
"In Reg. v. Bolton, which is referred to with approval in L.R. 5 P.C. at page 443 and numerous later decisions, it was observed that the test of jurisdiction (for this purpose) was whether or not the authority in question had power to enter upon the enquiry, no whether its conclusions in the course of it were true or false."
In C. A. Abraham v. Income-tax Officer, Kottayam, their Lordships of the Supreme Court held :
"The Income-tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining relief in respect of any improper order passed by the income-tax authorities. The tax-payer cannot be permitted to abandon resort to that machinery and to invoke the jurisdiction of the High Court under article 226 of the Constitution when he has adequate remedy open to him by way of an appeal to the Appellate Tribunal."
In view of what I have said above, I would dismiss this appeal. In the peculiar circumstances of this case, however, I would leave the parties to bear their own costs throughout.
Appeal dismissed.
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