TMI Blog1950 (12) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... month. By another indenture of lease, dated 4th January, 1949, the petitioner also obtained a lease from the respondents Nos. 4 and 6 for a period of 99 years Commencing from 1st January, 1949, at a rent of ₹ 1,000 per month of certain properties situate at Cawnpore. By a third indenture of lease, dated the 20th December, 1948, the petitioner obtained a lease of certain properties in Delhi from the respondent No. 4, Mohamad Amin, for a period of 99 years commencing from 1st January, 1949, at a rent of ₹ 100 per month. After partition of India and on 7th February, 1948, an Ordinance being Ordinance No. III of 1948, was passed by the Government of India. Under the said Ordinance to Registering Officer should register any document which is required to be registered under clauses (a), (b), (c) and (e) of sub-section (1) of Section 17 of the Registration Act, unless a certificate had been obtained from the Assistant Commissioner of Income-tax, to the effect that the person making such transfer is not liable to taxation under the Indian Income-tax Act, the Excess Profits Tax Act or the Business Profits Tax Act, 1947, or that he has either paid or made satisfactory provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the fear of such disturbances, leaves or has, since the 14th day of August, 1947, left any place in the Provinces of India for any place outside India, or who, since the said date, has been residing in any place outside India; or (ii) who, in the opinion of any of the Income-tax authorities specified in sub-section (1) of Section 5 of the Indian Income-tax Act, 1922 (XI of 1922), or a Custodian of Evacuee Property or a Collector, is likely to leave the Provinces of India with the intention of setting in any place outside the Provinces of India, and in respect of whom a declaration that he is a person to whom this Act applies has been received from any such Income-tax authority, Custodian of Evacuee Property or Collector by the registering officer of the area in which any property belonging to such person is situate . Section 3, 4 and 9 of the said Act are material. Section 3 runs as follows :- Payment of taxes before registration of documents :- (1) Where any document required to be registered under the provisions of clause (a), clause (b), clause (c) or clause (e) of sub-section (1) of Section 17 of the Indian Registration Act, 1908 (XVI of 1908), purports to transfer, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e General Clauses Act, 1897 (X of 1897), shall apply as if the Ordinance had then been repealed by a Central Act. At the time of the granting of the leases in favour of the petitioner by the respondents Nos. 4 and 5 hereinbefore mentioned, the Ordinance XXI of 1948 was already in force. On 16th May, 1950, the respondent No. 1, C. S. Peters, who was then the Income-tax Officer, acting on behalf of the Indian Union, issued diverse notices to the lessors, in relation to the properties leased out to the petitioner, under Section 4 (1) of the Payment of taxes (Transfer of Property) Act. The material portions of the said notices are as follows :- Whereas you are a person to whom the Payment of Taxes (Transfer of Property) Act, 1949 (Act XXII of 1949), applies within the meaning of Section 2 of the said Act, and (2) Whereas your right, title and interest in the movable properties mentioned below has been transferred by way of lease to Messrs. Hind Estates, Ltd., of 220/1, Lower Circular Road, Calcutta, and (3) Whereas it appears that no certificate in the terms mentioned in Section 3 of this Act would have been issued to you if the said Act had been in force on the date the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucceed only if he can establish before me that the Act itself is ultra vires the Constitution of India, then I would have referred to the matter to the Honble Chief Justice for constituting a Special Bench to decide this question, as, in my opinion, it would be much more satisfactory to have it decided by a Bench of three Judges. But, as I have already said, it would not be necessary for me for the purpose of deciding this application to go into that question. The third contention of Mr. Chaudhuri is that under Section 9 of the said Act the provisions of Section 6 of the General Clauses Act have been made operative as if the Ordinance had then been repealed by a Central Act. Mr. Chaudhuris contention is that because of that reason the Ordinance still applies and if that is so, then the action of the authorities concerned cannot be sustained. With regard to the first contention of Mr. Chaudhuri, Mr. Advocate Generals contentions before me in short are as follows :- Section 4 is an independent section, independent of Section 3 of the Act. Under Section 3 the Registering Officer shall not register certain classes of transactions, lease being admittedly excluded. All that it mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 3. Registration of documents. - No Registering Officer, Revenue Officer, Custodian or other officer appointed to deal with property shall register any document, relating to property other than agricultural land, which is required to be registered under the provisions of clause (a), (b), (c) or (e) of sub-section (1) of Section 17 of the Indian Registration Act, 1908 (XVI of 1908), unless it is certified by the Inspecting Assistant commissioner of Income-tax of the area in which the property is situate in respect of every person whose right, title or interest in the property is or will be transferred, assigned, limited or extinguished under the terms of the document, either that such person is not liable to taxation under the Income-tax Act, 1922 (XI of 1922), the Excess Profits Tax Act, 1940 (XV of 1940), or the Business Profits Tax Act, 1947 (XXI of 1947), or that he has either paid or made satisfactory provision for the payment of all existing or anticipated liabilities under any of the said Acts, or that he is otherwise satisfied that the registration should be allowed . Section 4. Recovery proceedings. - If any right, title or interest in any property, whether m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the learned Advocate-General wants me to put on Section 4 of the present Act, is to be accepted, then I see no reason why these words are introduced in the said section of the present Act. Apart from any reference to the provisions of the previous Ordinances, on a proper consideration of the section itself and also as read with other provisions of the Act, it seems to me that Section 4 of the Act applies to the class of transfers mentioned in Section 3. The heading of the Act, the preamble of the Act and the heading of the section itself also support the view which I have taken in this matter. The heading and the preamble of the Act show that the object, or, as Mr. Sen puts it, the main theme of the Act, is to provide for payment of taxes before transfers of property are registered in certain cases. Such a provision is made in Section 3 of the Act so far as future transfers are concerned, and in Section 4 of the Act in cases of transfers which took place prior to the commencement of the Act. But both the sections, in my opinion, refer to the same class of transfers. This view makes the heading of the Act, the preamble and the heading of the section itself consistent with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to issue the notices which have been issued. I am fully aware of the possibility of dishonest parties avoiding the provisions of the Act by taking resort to leases instead of transfers. But I have to interpret the Act as it has been enacted, and if on such interpretation the leases do not come within the purview of Section 4 (1) of the said Act, then the Income-tax Officer cannot take the action under the said section. With regard to the contention of Mr. Chaudhuri, which is based on Section 9 of the present Act, I must confess that I am unable to see any force in the said contention. Section 9, as Mr. Advocate-General has rightly pointed out, only keeps alive the proceedings which started under the previous Ordinances, because, it is now well-established that the General clauses Act does not apply to temporary Acts. That is why a provision had to be made in this Act providing for the application of Section 6 of the General Clauses Act. The effect of Section 9 is nothing more than that. That being so, I cannot accept Mr. Chaudhuris contentions on this point. But on the view which I have taken as to the effect of Section 4 (1) of the Act and having come to the conclusion tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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