1970 (2) TMI 9 - HC - Income Tax

Kerala Agricultural Income Tax Act 1950 - question raised by the widow of a deceased assessee is whether a notice exhibit P-1 issued under section 7 of the Travancore-Cochin Revenue Recovery Act 1951 to her is incompetent or not

Issues Involved:
1. Competency of notice issued under section 7 of the Travancore-Cochin Revenue Recovery Act, 1951.
2. Liability of the widow of the deceased assessee under section 24 of the Agricultural Income-tax Act, 1950.
3. Validity of the certificate issued under section 41(3) of the Agricultural Income-tax Act, 1950.
4. Applicability of Civil Procedure Code provisions to the recovery process.

Issue-wise Detailed Analysis:

1. Competency of Notice Issued Under Section 7 of the Travancore-Cochin Revenue Recovery Act, 1951:
The petitioner, the widow of the deceased assessee, challenged the competency of the notice issued by the Deputy Tahsildar of Revenue Recovery under section 7 of the Travancore-Cochin Revenue Recovery Act, 1951. The petitioner contended that no notice under section 30 of the Agricultural Income-tax Act, 1950, was issued to her after her husband's death, and therefore, she should not be considered a defaulter. Consequently, it was argued that no certificate could have been issued under section 41(3) of the Act for recovery from her.

2. Liability of the Widow of the Deceased Assessee Under Section 24 of the Agricultural Income-tax Act, 1950:
The court examined section 24 of the Act, which states that the executor, administrator, or other legal representative of a deceased person is liable to pay the agricultural income-tax from the estate of the deceased to the extent that the estate can meet the charge. The petitioner claimed she did not inherit any estate from the deceased, thus section 24 would not apply, and she should not be liable. The court noted that this issue could not be resolved in the current proceedings and should be decided by the Revenue Recovery Officer.

3. Validity of the Certificate Issued Under Section 41(3) of the Agricultural Income-tax Act, 1950:
The court discussed whether a certificate could be issued under section 41(3) of the Act without the petitioner being an "assessee in default." The revenue argued that section 41(3) does not require the assessee to be in default, unlike section 41(1). The court referenced the Supreme Court ruling in Third Income-tax Officer, Mangalore v. M. Damodar Bhat, which supported the revenue's interpretation. However, the court did not decide on this matter, as the case could be disposed of on another ground.

4. Applicability of Civil Procedure Code Provisions to the Recovery Process:
The court considered the argument that the Collector, by virtue of the proviso to section 41(3), possesses the powers of a civil court. Therefore, the Collector can take action against the legal representatives of an assessee in default. The court noted that George Peter was an assessee in default, and a valid certificate for the collection of arrears was issued before his death. The court referenced the Supreme Court ruling in Sahu Rajeshwar Nath v. Income-tax Officer, which held that the Collector could proceed against the legal representatives without a fresh request from the Income-tax Officer.

The court concluded that the second respondent had a valid certificate dated April 26, 1964, and could proceed against the petitioner if she is a legal representative of the deceased. However, the court emphasized the need for compliance with rule 22 of Order 21 of the Civil Procedure Code, which requires notice to the legal representative before proceeding against them. The notice, exhibit P-1, did not comply with this requirement.

Conclusion:
The court directed that the notice, exhibit P-1, be considered as a notice under rule 22 of Order 21 of the Civil Procedure Code. The petitioner was given a month's time to raise her objections to the recovery proposal. The objections would be considered by the second respondent, who would determine the petitioner's liability. Only after such determination could coercive steps be taken under the Revenue Recovery Act. The original petition was ordered accordingly, with each party bearing their respective costs.

← Previous Next →