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TMI Blog1967 (3) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... marily rejected by the learned judge. The only point that the learned judge seriously considered and then decided against the appellant-petitioner was the point as to reasonable opportunity. At the time of hearing of this appeal Mr. A. K. Sen, appearing on behalf of the appellant, also confined himself to the point of reasonable opportunity. Therefore, in relating the facts and circumstances of this case we confine ourselves only to those which are relevant for consideration of the point of reasonable opportunity. On October 19, 1963, the Commissioner of Income-tax (hereinafter referred to as the Commissioner) issued a notice addressed to the appellant concerning a proposed revision under section 33B of the Indian Income-tax Act of the assessments of the appellant-petitioner for the years 1959-60 to 1961-62. In the letter constituting this notice it is stated that according to the Commissioner the orders of assessment passed by the Income-tax Officer , " D " Ward on 28th November, 1961, in respect of the aforesaid assessment years had been " erroneous in so far as they were prejudicial to the interests of revenue ". The Commissioner in that letter gave reasons as to why he conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow. Accordingly, I have fixed up a time and have left a slip, requesting Mr. Ghosh to wait for me. Sd./- H. P. Neogi, 21-10-63. Seen report. Re : Inspector will please try to serve the notices tomorrow on Sree Ramendra Nath Ghosh & Ors., failing which the notices should be served by affixation. Sd./- Illegible, 21-10-63. " Report dated 22nd October, 1963. " Reg : Sri Ramendra Nath Ghosh for and on behalf of Sailendra Nath Ghosh & Ors. of 2, G. T. Road, Ballykhal, Howrah. Sm. Sibani Rani Ghosh, 2, G. T. Road, Ballykhal, Howrah. Sm. Rashmoni Ghosh, 2, G. T. Road, Ballykhal, Howrah. Sri Ramendra Nath Ghosh, 2, G. T. Road, Ballykhal, Howrah. Today also I had been to the above address again but unfortunately Mr. Ramendra Nath Ghosh was not available at the appointed time. However, I contacted the said persons whom I saw there yesterday. Enquired about Mr. Ramendra Nath Ghosh, they informed that Mr. Ghosh has left the station and is expected back after a month or so. On further enquiry they informed that there was no second man to receive the notice in the absence of Mr. Ghosh. Mr. Ghosh's correct address and the place for which he left were not also furnished. From my conver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied that the notice has been served properly and therefore proceed to pass order ex parte on the basis of the merits of the case. As the points involved in all the assessments are common, they are disposed of by a consolidated order. " It will be noticed that the Commissioner was satisfied that proper service of the notice had been effected and that on the basis of this satisfaction be passed an order ex parte. The Commissioner cancelled the previous assessments of the petitioner under section 33B of the Income-tax Act and directed fresh assessments after proper enquiries and investigation. By a letter dated 24th January, 1964, addressed by the appellant's solicitors, Messrs. Mukherjee & Biswas, to the Commissioner, a protest was lodged against this order dated 2nd November, 1963, It was stated in that letter that the notice to the appellant about a hearing on 2nd November, 1963, had in fact been delivered to the appellant on 18th November, 1963. The letter called upon the Commissioner to recall and rescind the notice of 19th October, 1963, as well as the order passed on 2nd November, 1963. There was further correspondence between the income-tax authorities and the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax department made enquiries of the postal authorities and a copy of the letter written to the postal authorities and the reply from them are annexed herewith in a bundle and marked with the letter 'A'. It appears that the assessee was avoiding service. 3. I further state that attempt was made to serve on Ramendra Nath Ghosh at No. 2, Grand Trunk Road, Ballykhal, Howrah. The Inspector went on the 21st October, 1963, and as he could not find the petitioner, made a report to the Income-tax Officer. The Income-tax Officer gave certain directions for the purpose of service. Thereafter, the service was effected. The report made by Sri H. P. Neogi, Inspector, who went to serve as well as the order of the Income-tax Officer dated 21st October, 1963, and the report of the process-server are annexed herewith in a bundle and marked with the letter 'B'." It will be noticed that the income-tax authorities were at this stage making out two cases. First, their case was that with regard to the notices sent out on 19th October, 1963, under registered post, the assessee was avoiding service. Secondly, they say on the basis of the report of their Inspector that the notice in question had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondence with the postal authorities on the basis of which Dwijendra Nath Banerjee made his affidavit had been available to the income-tax authorities from long before 28th April, 1964, when they filed their first affidavit-in-opposition and yet the income-tax authorities had made no mention of these alleged facts in their first affidavit. The petitioner made several positive statements in his affidavit which I prefer to set out in extenso because ultimately the income-tax authorities had to admit most of the facts alleged by the petitioner. The facts are stated in paragraph 4 of the appellant's affidavit of 29th January, 1965, which was in the following terms : " 4. With further reference to paragraph 2 of the affidavit I say the allegations in the letter dated 10th March, 1964, purported to have been written by the sub-postmaster, Uttarpara, to the Commissioner of Income-tax, West Bengal III, are untrue in the following material particulars --- (i) The registered letters were not received on 22nd October, 1963, by the Uttarpara Post Office but were received on 23rd October, 1963. (ii) The letters were not kept in deposit for seven days. (iii) No instructions could be given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his office. " In the affidavit there are references to various other letters but they are really connected with analogous proceedings in respect of some of the other relations of the petitioner with which we are not concerned in this appeal. Annexed to this affidavit there is a letter dated 15th February, 1965, from the Additional Income-tax Commissioner, West Bengal III, to sub-postmaster, Uttarpara, as well as a letter from sub-postmaster, Uttarpara, to the Income-tax Commissioner. In the letter to the sub-postmaster, Uttarpara, the Additional Income-tax Commissioner writes with reference to an earlier letter dated 10th March, 1964, from the said sub-postmaster : " In para. 2 of your letter you stated that the registered covers referred in our reference were served on the addressee on 22nd November, 1963. This is not correct. The acknowledgements subsequently received show that the covers were served on the addressee on 18th November, 1963. The date of service of 22nd November, 1963, relates to four other covers registered on 18th November, 1963, covered by registration receipts Nos 93, 94, 95 and 144 as seen from the records of this office. " The sub-postmaster's reply to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vii) The delay in service of the registered notices was " caused or manipulated by the petitioner himself " so that the petitioner cannot be heard to complain about this delay ; (viii) The petitioner when he left his residence for another place did not make any arrangement for receipt of notices in his absence. Therefore, the petitioner himself created a situation in which the delivery was not possible ; (ix) The income-tax department, therefore, offered proper opportunity of being heard to the petitioner but the petitioner by his own conduct could not avail of the opportunity ; (x) The notice sent to No. 2, G. T. Road had been served by affixation ; (xi) The serving officer had gone there " at a reasonable time " ; (xii) The serving officer, when he affixed the notice on the second day at No. 2, G. T. Road after he had returned to that place for serving the notice on the following day, had acted legally ; (xiii) The story about the return of service must, therefore, be accepted. We shall deal with the learned judge's findings in two broad divisions, viz., first, his finding as to service of the registered letters at the residential address of the petitioner and, secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e more acceptable. With great respect, we find it impossible to subscribe to the learned judge's findings on this point. Mr. Gouri Mitter, appearing for the respondents, with his usual fairness admitted that he could neither rely on nor support the learned judge's judgment on this point. Indeed, Mr. Mitter conceded that, so far as the service of the notices by registered post is concerned, the respondents have no case at all. Those notices were unquestionably served long after the order under section 33B of the Income-tax Act, had been passed. The facts on the basis of which the respondents had at one stage claimed that the appellant was avoiding service are completely wrong facts and both the postal authorities and the respondents have abandoned those facts. Banerjee J. was, therefore, obviously wrong in accepting a claim and a contention which was jettisoned by the very party which had advanced them. It was also pointed out to us that in connection with another petition, viz., Matter No. 65 of 1964 between the same parties where the question of service of a notice under section 33B had to be decided on exactly identical facts, the learned judge himself had come to a finding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents had due and proper notice thereof would be apparent from the assessment order made on the said Bally Pug Mill Works Private Ltd., on 24th February, 1964. I crave reference to the same. I am not aware as to whether the inspector went to No. 2, Grand Trunk Road, Ballykhal, Howrah, on 21st October 1963. and I do not admit the same. As I was not at No. 2, Grand Trunk Road, Ballykhal, Howrah, on 21st October, 1963, it is possible that the said Inspector did not find me. I do not admit the correctness of the said alleged purported report on 21st October, 1963. The said alleged report in any event is vague inasmuch as the names of the two persons contacted at No. 2. Grand Trunk Road, Bally, khal. Howrah, had not been given and the allegations in the said report that I had just left Calcutta and that I would not return for the rest of the day are false, inasmuch as I had left Howrah for a holiday on the 10th October, 1963. In the premises the allegation that the said two alleged persons asked the Inspector to call on me next day is also untrue. It is significant that a copy of the slip alleged to have been left with the said persons asking me to wait for the Inspector has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Sen points out, that in the affidavit of 22nd October, 1963, there is no mention about these two persons. The reports dated 21st October and 22nd October, 1963, standing by themselves, cannot in any case be treated as evidence. Even if the affidavit be taken as evidence the whole story about the two unnamed relations of Ramendra Nath Ghosh does not appear there at all. Mr. Sen contends that on these materials the learned judge should not have come to the finding that the service of the notice by affixation had been done legally. Indeed, Mr. Sen contends that the learned judge should not have believed the story of inspector Neogi at all. There are some controversies also as to whether No. 2, Grand Trunk Road address was a disclosed address of the appellant. Mr. Sen sought to rely on a letter dated 10th October, 1963, alleged to have been addressed by the appellant to Income-tax Officer, " L " Ward, Company District I, in which the appellant gives notice of discontinuance of business of Bally Pug Mill Works Private Ltd. under section 176(3) of the Income-tax Act, 1961, and also told the Income-tax Officer that the address of 2, Grand Trunk Road, Ballykhal, Howrah, was closed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober, 1963, by the income-tax authorities. We gave an opportunity to both the parties to disclose, if they wished to do so, any further documents in respect of the evidence that was going to be recorded. Thereafter, the three witnesses named above appeared and gave evidence before us. They were first examined by Mr. Mukherjee, counsel for the respondents, and then cross-examined by Mr. Sen. It is not necessary for us to give any elaborate account of the evidence of these witnesses. It will be sufficient if we set out the net results of this evidence. Neogi said that when he went to serve the notice at No. 2, Grand Trunk Road, he found that the premises looked like an office. He knew this office to be the office of Bally Pug Mills. He found two men there who described the appellant as a member of their family. He asked them for their names but they refused to disclose their names. He could not explain why he did not mention their refusal to disclose the names either in his report or in his affidavit. The only explanation he gave was that his report was a short one and that is why he did not mention this fact. According to Neogi he had been told by his office that No. 2 Grand Trunk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have told him the address but nobody asked him. Narasingham admitted that, if a notice was to be served by affixation, it should have been served at the residence. The relevant questions and answers are so important that I set them out verbatim : " Q. 89 : Where according to you with all fairness notice is to be served by affixation---you are a responsible Income-tax Officer---at the office or at the residence ?/ At the residence. Q. 90: Would you serve him by affixation at the business premises ?/ Perhaps not. Q. 91 : If you were told that the inspector has been informed by the people that the man has left Bally office and would not be coming within one month, would you serve it by affixation or would you ask and enquire for his residence ?/ If I am given the work of service I may try at every place. Q. 92 : Would you agree that in fairness, apart from the question of law, you should be at least looking for his residence ? Yes, I would have. Q. 113 : What I am asking you since a notice to be served by affixation---if it was a summons issued by a court under the Code of Civil Procedure---according to your experience and knowledge at the first instance where it has to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Grand Trunk Road, without any attempt to ascertain whether the appellant was at his residence ; (vi) No attempt at all was made to serve the notice either personally or by affixation at the residence. The only attempt was made at the office address ; (vii) Ordinarily, the practice of the income-tax authorities is to serve such notices by affixation at the residential address of an assessee. Mr. Gouri Mitter realised that his case must stand or fall with the evidence of H. P. Neogi. He could not, however, argue that Neogi's evidence was completely satisfactory. So, with his usual persuasiveness Mr. Mitter asked us to accept the evidence of Neogi in spite of its short-comings on the ground that it was not inconsistent with his affidavit of October 22, 1963. We find it impossible, however, to rely on the evidence of Neogi. Neogi in his evidence says that he knew the premises at No. 2, Grand Trunk Road be the residence of Ramendra Nath Ghosh and that this was the residential address of Ramendra Nath Ghose which had been given to him by his office (Qq.90-91). Later on he had to admit that No.2, Grand Trunk Road, was the office address of Bally Pug Mills Ltd. A question was put to hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocedure, 1908. Mr. Sen developed his argument in the following way. The requirement of giving an opportunity of being heard must be construed to imply an obligation of giving a notice to the assessee of the contemplated exercise of jurisdiction under section 33B by the Commissioner. Such notice must be served in the way indicated in section 63 of the Indian Income-tax Act, 1922, regarding service of notices. Sub-section (1) of section 63 deals with service of notice upon an individual and is in the following terms : " 63. (1) 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. " Since in this case the notices could not admittedly be served on the petitioner by post, the only other way they could be served is by the procedure laid down for service of summons under the Code of Civil Procedure. There are, as is well-known, three modes of such service. In the first case, a summons is served by delivering a copy of it to the defendant personally or to his agent or his representative in which case the signature of the person to whom the copy is delivered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person (if any) by whom the house was identified and in whose presence the copy was affixed. " On the facts of this case it cannot be said that the defendant or his agent refused to sign the acknowledgment. It does not also appear that the two unnamed persons whom H. P. Neogi is supposed to have met at No. 2, Grand Trunk Road, Ballykhal, Howrah, had been asked to accept the service. Indeed, it does not appear that they were either agents or such persons as could accept the service on behalf of the assessee. In any case, since the income-tax inspector does not say that they refused to accept the service, there has not been a strict compliance with the requirements of Order 5, rule 17 of the Code of Civil Procedure. Even if all these conditions which I have just mentioned were there, all that the serving officer could do was to affix a copy of the summons on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries on business or personally works for gain. It is now clear beyond any question of doubt that the place where affixation had been done was not the residence of the assessee. At the relevant time one cannot even say that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder 5, rule 17, of the Code of Civil Procedure are not directly applicable to proceedings under section 33B of the Income-tax Act, they furnish a test of reasonable notice, even then it is impossible to escape the conclusion, that no reasonable opportunity had been given to the assessee. Two facts would destroy any suggestion of reasonableness, namely, the fact that notice was not affixed or sought to be served by the inspector of the income-tax department at the assessee's residence in spite of the fact that the actual residence of the assessee was known to the department and, secondly, the fact that a notice was sent to and affixed at an office of a company which was already in liquidation. Though the learned judge rejected the assessee's petition mainly on the ground that the assessee, according to his Lordship, had been avoiding the service, it is clear that neither the affidavit of H. P. Neogi nor H. P. Neogi's evidence recorded before us give any support to that theory. Emboldened by the fact that the evidence on record shows that the income-tax authorities made no attempt to serve by affixation at the residence of the assessee, though they had knowledge of the actual resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soon but even so, the last date for passing such an order was 28th November, 1963. Therefore, the Commissioner could have reasonably waited for some time before passing an ex parte order against the assessee. We must take notice of another argument advanced by Mr. Gouri Mitter on behalf of the respondents. Mr. Mitter argued that since the Income-tax Act is a complete code and since there was an alternative remedy open to the assessee by way of appeal against the order of the Commissioner, no relief under the writ jurisdiction of this court would be available to the petitioner. Mr. Mitter invoked the authority of the Supreme Court and cited two decisions. In the first instance, Mr. Mitter relied on the case of C. A. Abraham v. Income-tax Officer, Kottayam, where the Supreme Court held as follows : " 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 orders passed by the income-tax authorities, and the appellant could not 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 had adequate remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he writs or grant reliefs to petitioners in their writ jurisdiction. Thus, in the State of U.P. v. Mohammad Nook, Das C. J. considered this point and formulated the principles which should be followed in the matter of issue of writs where there are alternative remedies. Das C. J. observed as follows : " ..... it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute, (Halsbury's Laws of England, 3rd edn., vol. 11, p. 130 and the cases cited there). The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari 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, if any. But this rule requiring the exhaustion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunals hearing the appeal or revision were merely departmental tribunals composed of persons belonging to the departmental hierarchy without adequate legal training and background and whose glaring lapses occasinally come to our notice. The superior court will ordinarily decline to interfere by issuing certiorari and all we say is that in a proper case of the kind mentioned above it has the power to do so and may and should exercise it. We say no more than that. " The Supreme Court has consistently followed this principle and in cases where they have found that a tribunal has acted contrary to the principles of natural justice, the Supreme Court has always unhesitatingly set aside the order passed by such tribunal. In the case of Mahadayal Premchandra v. Commercial Tax Officer, Calcutta the Supreme Court, after finding that the procedure adopted was contrary to the principles of natural justice and " unfair and ... calculated to undermine the confidence of the public in the impartial and fair administration of the sales tax department concerned ", intervened and set aside an order of assessment made by the sales tax authorities. In the case of Calcutta Discount Co. Ltd. v. Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to argue that the exceptions mentioned by Shah J. do not include the cases where rules of natural justice have been infringed and, therefore, the third exception should be taken as automatically ruled out by the judgment of Shah J. We do not read Shah J.'s judgment in that light. We are not inclined to say that Shah J. wanted to abrogate the principles laid down in the case of State of U. P. v. Mohammad Nooh, which was a judgment delivered by a Bench presided over by S. R. Das C. J. and consisting of five judges one of whom was Sarkar J., who was also a party to Shah J.'s judgment in Shivram Poddar v. Income-tax Officer, Central Circle II, Calcutta. We have no doubt in our mind that the exceptions indicated by Shah J. are only illustrative and not exhaustive. In any event, contravention of the rules of natural justice or failure to give a reasonable opportunity of being heard provided for by the statute creating a special jurisdiction for an executive authority would automatically mean that the executive authority in question would have no jurisdiction to act. Therefore, on the facts of this case, where we have come to a finding that the Commissioner of Income-tax had not given a r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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