9911796707
TMI Blog1974 (9) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... iness premises in Delhi were searched on October 15/16, 1971. On the 15th his premises in Bombay were also searched and at that time it appears the petitioner was present in Bombay ...... The search in the business premises was made when a number of persons who usually worked there were present. Books of account, documents, some jewellery and a large amount of cash amounting to about Rs. 61,000 were seized. On october 16 there was a search in the branch offices of the Laxmi Commercial Bank and the Punjab National Bank. 84 silver bars were seized from Laxmi Commercial Bank and 30 silver bars were seized from the Punjab National Bank. (It appears that the bars themselves were not actually seized but were only attached under the provisions of sub-section (3) of section 132 of the Income-tax Act, 1961). The value of these silver bars comes to nearly Rs. 18 lakhs. It is the case of the petitioner that these bars belong to M/s. Pooranmal and Sons of Bombay who sent the same to the Motor and General Finance Company of which the petitioner is a partner and this finance company, it is alleged, kept these bars with the two banks. 84 bars were kept in the account of M/s. Udey Chand Poor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in two months, The writ is accordingly accepted and disposed of in terms of the submissions of the parties recorded above, but with no order as to costs. " In that writ petition the contention of the petitioners was that the silver bars were the property of the first respondent-firm and not that of Pooran Mal, the individual, who was only one of the partners. After the disposal of the writ petition the Income-tax Officer duly held a fresh enquiry and passed an order on June 5, 1972, holding that the silver bars belonged to Pooran Mal, the individual, and not to the first respondent-firm. Respondents Nos. 1 and 2 thereafter filed Civil Writ Petition No. 595 of 1972, out of which this appeal arises, contending that the silver bars belonged to the first respondent-firm and that the order of the Income-tax Officer holding that they represented the undisclosed income of Pooran Mal, the individual, was illegal. It was also contended that the Income-tax Officer had no jurisdiction to pass the impugned order beyond the period prescribed in sub-section (5) of section 132. This second contention found favour with the learned judges of the High Court. As a result they set aside the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive. The court in exercising its powers under article 226 has to mould the remedy to suit the facts of a case. If in a particular case a court takes the view that the Income-tax Officer, while passing an order under section 132(5), did not give an adequate opportunity to the party concerned it should not be left with the only option of quashing it and putting the party at an advantage even though it may be satisfied that on the material before him the conclusion arrived at by the Income-tax Officer was correct or dismissing the petition because otherwise the party would get an unfair advantage. The power to quash an order under article 226 can be exercised not merely when the order sought to be quashed is one made without jurisdiction in which case there can be no room for the same authority to be directed to deal with it. But, in the circumstances of a case, the court might take the view that another authority has the jurisdiction to deal with the matter and may direct that authority to deal with it or where the order of the authority which has the jurisdiction is vitiated by circumstances like failure to observe the principles of natural justice, the court may quash the order an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a taxing statute will fall within this rule. The question whether a certain provision of law is directory does not fall to be decided on different standards because it is found in a taxing statute. There is no rule that every provision in a taxing statute is mandatory. The strict construction that a citizen does not become liable to tax unless he comes within the specific words of a statute is a different proposition. That a person cannot be taxed on the principle of estoppel does not admit of much argument. Article 265 of the Constitution lays down that no tax shall be levied except when authorised by law. It was also argued based on Explanation 1 to section 132 and similar provision in certain other sections which lay down that in computing the period of limitation any period during which any proceeding is stayed by an order or injunction of any court shall be excluded, that where it is intended that the period of limitation prescribed by any of the provisions of the Income-tax Act should not be strictly enforced the law itself makes a specific provision. It is a well-established principle of judicial procedure that where any proceedings are stayed by an order of a court or by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, to agree to a fresh disposal of the case by the Income-tax Officer and thereby waive the period of limitation. Even apart from the consent of the parties it was open to the court in Writ Petition No. 82 of 1972, to have set aside the earlier order of the Income-tax Officer and direct a fresh disposal of the matter by the Income-tax Officer on the ground which was in fact agreed to by the parties, that the aggrieved party had no reasonable opportunity of putting forward its case. It was within its power to do so. If respondents Nos. 1 and 2 wanted to urge that the order of the Income-tax Officer impugned in W.P. No. 82 of 1972 was liable to be set aside as they had no reasonable opportunity to put forward their case they could have done so. They need not have agreed to the matter being considered afresh. The court would in any case have passed such an order. Having agreed and thus persuaded the court to direct the Income-tax Officer to pass a fresh order respondents Nos. 1 and 2 cannot question the order of the Income-tax Officer on the basis of such direction. They should be deemed to be estopped from so contending. They had by their consent made the Income-tax Officer to put ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order that the caveator should file her case, which she accordingly did. It was held that he had thereby waived his right to have the caveat set aside as lapsed under section 23. The Privy Council held that the limitation of time contained in section 23 was introduced for the benefit of the applicant to enable him to obtain a speedy determination of his right to have the land brought under the provisions of the Act and that it was competent for the applicant to waive the limit of three months, and that he did waive it by stating a case and applying for and obtaining an order upon the appellant to state her case, both which steps assumed and proceeded on the assumption of the continued existence of the caveat. They referred with approval to the decision in Phillips v. Martin , where the Chief Justice said : " Here there is abundant evidence of waiver, and it is quite clear that a man may by his conduct waive, a provision of an Act of Parliament intended for his benefit. The caveator was not brought into court in any way until the caveat had lapsed. And now the applicant, after all these proceedings have been taken by him, after doubtless much expense has been incurred on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of limitation prescribed by section 132(5) is intended for the benefit of persons like the respondents, it is competent for them to waive it, that the respondents have in fact waived it, and the order of the High Court in W. P. No. 82 of 1972 is a consequence of such waiver, that the Income-tax Officer had, therefore, the jurisdiction to pass a fresh order. It follows, therefore, that as the High Court did not go into the question of the correctness or otherwise of the fresh order of the Income-tax Officer that the property belonged to Pooran Mal, the individual, and not to the 1st respondent-firm, it was not competent for the High Court to order the return of the 114 bars of silver to the 1st respondent-firm. There is still another reason why the order of the kind which the High Court made could not be made. We may refer to the decision of this court in Lokenath Tolaram v. H. N. Rangwani . There certain goods were seized from the possession of the appellants. They filed a petition challenging the legality of the order of the excise authorities granting extension of time to serve notice under section 124(a) of the Customs Act, 1962, after the expiry of the period of six months ..... X X X X Extracts X X X X X X X X Extracts X X X X
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