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1962 (9) TMI 93

ng aside all proceedings in Certificate Cases Nos. 158 I.T. (C) of 1955-56, 159 I.T. (C) of 1955-56, 160 I.T. (C) of 1955-56 and 161 I.T. (C) of 1955-56 in respect of four certificates all dated March 28, 1956, signed by the Certificate Officer, 24-Parganas, and filed in his office under section 4 of the Bengal Public Demands Recovery Act, 1913, for recovery of the public demands due to the Union of India from the petitioner firm on account of excess profits tax assessed on the petitioner firm for the chargeable accounting periods ending March 31, 1942, March 31, 1943, March 31, 1944, and March 31, 1946. By his orders dated March 29, 1956, the Certificate Officer directed the entry of the certificates in Register X and the issue of a notice under section 7 of the Act. Notices under section 7 dated April 16, 1956, were issued and served on the petitioner but upon objection filed under section 9, the Certificate Officer by his orders dated December 20, 1956, directed the issue and service of fresh notices under section 7. Fresh notices dated December 20, 1956, were issued and served on the petitioner. Thereupon the petitioner filed under section 9 of the Act fresh petitions of object .....

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efore, be lawfully made upon the partners of the petitioner firm in their firm name. Section 21 of the Excess Profits Tax Act, 1940, provided, inter alia, that sections 29, 45 and 46 of the Indian Income-tax Act, 1922, would apply with such modifications, if any, as might be prescribed as if the said provisions were provisions of the Excess Profits Tax Act and referred to excess profits tax instead of to income-tax. The proviso to section 21 enacted that "the references in the said provision to the assessee shall be construed as references to a person to whose business this Act applies". By the definition in section 2(17) of the Act "person" included a Hindu undivided family. It is argued that having regard to the proviso to section 21 read with section 2(17), the assessees could only be the individual partners to whose business the Act applied. I cannot accept this contention. This definition in section 2(17) of the Act did not exclude the wider definition of "person" in section 3(42) of the General Clauses Act. Where the partners of a firm are liable to be assessed jointly in the partnership name under section 14(3), the partnership firm is the asses .....

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aside, varying or modifying the certificates under section 10 of the Bengal Public Demands Recovery Act, 1913. On behalf of the Union of India, Mr. Pal has assured us that the department still adheres to the stand taken in the two letters. It is to be observed that while the department should be free to take all steps to see that execution of the certificates is not barred by limitation, immediate steps should be taken for the completion of the pending refund proceedings, if any, so that the moneys, if any, due to the petitioner firm on account of refund may be ascertained and the refund order, if any, of the petitioner firm or its partners may be speedily issued. On behalf of the petitioner it is next contended that the certificates are invalid because they did not specify (a) the dates of commencement of the chargeable accounting periods and (b) the income-tax on the basis of which the excess profits tax was assessed. Now the first column of the certificate mentioned the name of the certificate holder, the third column stated the name and address of the certificate debtor, the fourth column stated "Dt. NC-II Cal" by way of particulars of the demand. The first column of .....

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r point in Sm. Champa Kumar Singhi v. Additional Member, Board of Revenue [1962] 46 ITR 81. The judicial conflict of opinion is noticed in N.C. Sen and B.C. Sen v. Income-tax Officer [1964] 51 ITR 218 by P.B. Mukharji J., who declined to express any opinion in the matter having regard to the passing of West Bengal Act XI of 1961. Like a demand for income-tax, a demand for excess profits tax cannot be said to be due for any particular period and on this ground it was held in Durga Prosad v. Secretary of Slate [1945] 49 CWN 334, that the omission to mention a period for which the income-tax was due did not invalidate the certificate in respect of income-tax demand. This case was followed in the unreported Civil Revision Case No. 734 of 1957 (Union of India v. Jeonlal Bhuioria), where it was pointed out that in Abanindra Kumar Maity's case (supra), the attention of the Division Bench giving a contrary decision was not drawn to the Privy Council decision. The validity of the certificates is next attacked on the ground that they are not in the prescribed form. The wording of the certificate issued in the instant case is as follows : "I certify that the sums mentioned overleaf a .....

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tly due and recoverable: see Syed Mohiuddin v. Pirthichand Lal Choudhury [1915] 19 CWN 1159and Ali Miyon v. Wajaddin Sikdar AIR 1925 Cal. 383. The certificates issued in the instant case satisfy the test of a valid certificate. On their face they show that the sums mentioned overleaf are due to a named certificate-holder by a named certificate-debtor and that the sums are justly recoverable, their recovery by suit not being barred by law. The materials on the record plainly show that the sums so mentioned are justly due to the Union of India from the petitioner firm and that their recovery by suit is not barred by law. In the circumstances it cannot be said that the Certificate Officer did not apply his mind to the matter. A certificate is not rendered invalid by a mere defect of form and even by an omission to fill up a blank : see Haraprosad Gain v. Gopal Chandra Gain [1927] 31 CWN 299;Dhirendra Kumar Chandra v. Pramatha Nath Shah ILR [1946] 2 Cal 18, explaining and distinguishing the decision in Sudhir Chandra Chakravarty v. Sudhansu Kumar Choudhury [1940] 44 CWN 1097. A certificate cannot be pronounced to be invalid merely on the ground that it does not repeat the exact formula .....

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d the petitioner. Copies of the certificate dated March 29, 1956, were served on the petitioner along with the notices under section 7. The copies of the certificate show that the certificates were signed on March 29, 1956. Besides, before service of the notices dated December 20, 1956, the petitioner had filed petitions of objections under section 9 and already knew of the date when the certificates had been filed. In the instant case, fresh notices under section 7 were issued after the notices under section 7 previously issued had been set aside and this feature distinguishes the present case from the decision in Satish Chandra Bhowmick's case (supra) . But with respect I cannot agree with that decision or its conclusion at page 339 that the combined effect of the words in section 7 and Form 3 read with rules 2, 3, 4, 5, 6, 7, 8 and 9 is that the notices under section 7 must be signed by the Certificate Officer, on the date on which he files the certificates in his office and that the date borne in the notice must be the date on which the certificate is signed and filed. It is plain enough that a fresh notice issued under section 7 after the first notice is set aside cannot b .....

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fer this matter to a larger Bench. On behalf of the petitioner it is next contended that the Bengal Public Demands Recovery Act, 1913, and West Bengal Act XI of 1961 are laws with respect to entry No. 43 of the Concurrent List of the Constitution and in the alternative that they are not laws with respect to either the State List or the Concurrent List and that, consequently, West Bengal Act XI of 1961 is invalid because (a) the assent of the President to the passing of the Act had not been obtained under article 254(2) of the Constitution and, alternatively, because (b) the State Legislature was not competent to make the law. These points though not taken in the petition have been allowed to be raised in argument without any objection and the learned Advocate-General has expressly invited this court to decide both these points. It may be noted that in the affidavit in reply filed on behalf of the petitioner West Bengal Act XI of 1961 was challenged on the ground that it puts unreasonable restrictions on the fundamental rights of the petitioner but that point is not pressed in argument. The West Bengal Act XI of 1961 is a piece of legislation dealing with certificates and notices is .....

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course to the machinery of the Revenue Recovery Act, 1890 (1 of 1890), under which on the requisition of the Collector of the district in which the arrears of land revenue accrued, the Collector of another district in India may recover the amount of the arrear as if it were an arrear of land revenue which has accrued in his own district. The Revenue Recovery Act, 1890, is, therefore, truly a law with respect to entry No. 43 of the Concurrent List. But the Bengal Public Demands Recovery Act, 1913, is not such a law : see Ajit Kumar Ganguli's case (supra) . Our attention is drawn to the legislative practice on the point and to the fact that the assent of the Governor-General under section 5 of the Indian Councils Act, 1892, was obtained to the passing of the Bengal Public Demands Recovery Act, 1913, and to the fact that the assent of the President under article 254(2) of the Constitution was obtained to the passing of the amending West Bengal Acts (XV of 1955 and XV of 1957). The first two cases have been considered in the judgment in Ajit Kumar Ganguli's case (supra). I may add that the assent of the President to the West Bengal Act (XV of 1957), though not necessary, might .....

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person signed and verified in the prescribed manner, the requisition being chargeable with the amount of the court-fee payable on a plaint for recovery of the demand. At the stage of the signing and filing of the certificate the certificate-debtor is not heard. But at a subsequent stage the debtor is entitled to file a petition under section 9 denying his liability and by section 10 the Certificate Officer is required to hear the petition, take evidence if necessary and determine whether the debtor is liable for the whole or any part of the amount for which the certificate was signed and he may modify or vary the certificate accordingly. Section 37 requires the Certificate Officer to determine all questions arising between the certificate-holder and certificate-debtor or their representatives relating to the making, execution, discharge or satisfaction of the certificate and the confirmation or setting aside of a sale held in execution of the certificate. By section 48 every Collector and Certificate Officer acting in discharge of his functions under the Act is deemed to be acting judicially within the meaning of the Judicial Officers Protection Act, 1850, and by section 49 they h .....

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ate filed by a Certificate Officer is a decision of a revenue court and that a suit for declaration that the certificate is null and void or in the alternative for cancelling or modifying it is governed by Schedule II, article I7(i), of the Court Fees Act, which provides, inter alia, for suits to alter or set aside a summary decision or order of a. revenue court. I am aware that in Dwarkanath Mandal v. Srigobinda Choudhury AIR 1929 Cal 130 a Division Bench of this court held that a Certificate Officer is not a court with special jurisdiction and his decision cancelling a certificate on the ground that the demand was not recoverable did not operate as res judicata in a subsequent suit for recovery of the identical demand. In the instant case we are not concerned with the question whether the decision of the Certificate Officer may operate as res judicata in a subsequent suit between the parties and, if so, in what circumstances. In the case last cited, B.B. Ghose J. observed that the Certificate Officer cannot in any circumstances be considered as a court and that the procedure of this officer is contrary to all sense of justice and the rules universally followed by a court and that .....

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power to make this law. The West Bengal Act (XI of 1961) is not a law with respect to any of the matters in the Union List or in the Concurrent List and consequently, it cannot be pronounced to be invalid on the ground that the assent of the President to the passing of the Act under article 254(2) of the Constitution has not been obtained. No other ground has been urged in support of this rule. The rule is discharged. There will be no order as to costs. Chatterjee J.-In this case a certificate under the Public Demands Recovery Act of 1913 has been challenged as invalid, illegal and improper. The Income-tax Officer concerned forwarded to the Collector, District 24 Parganas, a certificate under his signature specifying the amounts of arrears due from the assessee under section 46(2) of the Income-tax Act. The amount under the aforesaid section is recoverable, as if it were an arrear of land revenue. The Certificate Officer signed and filed a certificate within the meaning of the Public Demands Recovery Act on the receipt of a certificate of the Income-tax Officer within the meaning of section 46(2) of the Income-tax Act. This certificate is challenged as invalid, illegal and imprope .....

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tners. There is no provision in the Act which forbids a certificate against the partners collectively in the firm name. I must, therefore, overrule this objection. In my opinion, it is only on the aforesaid, grounds that a certificate can be challenged as invalid. Other grounds, relating to the form used, may be questions of illegality or impropriety of the certificate but would not touch the validity of the certificate. There has been a considerable divergence of opinion on this point; but because of Act XI of 1961 the question has lost its importance. As the point has been urged I would record my views with regard to such matters. The legality and the propriety of the certificate has been challenged on the ground that the standard form as under the Act has not been adhered to. But rule 84 provides that "the form set forth in the appendix shall be used with such variations as circumstances may require". The number of the certificate used is Form No. 1027. The standard form in the appendix also refers to that number. In the standard form after the tabular statement it is stated "I hereby certify that the above-mentioned sum of Rs... is due to the above-named ....from .....

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tion was not issued on the date the certificate was filed. It was issued later on and in the form of the notice under section 7 the word "today" was not struck out. This is the only error. I would again say that rule 84 would authorise the Certificate Officer to strike out the word "today" and insert therein the actual date of the certificate. But that was not done and, therefore, the certificate is challenged to be invalid. The certificate was issued earlier and the notice was issued subsequently. Therefore, the subsequent act, even if invalid or illegal, would not invalidate his earlier acts of drawing, signing and filing of a certificate. However, even if the notice is bad, that bad notice has served the purpose as much as a good notice would. Because of the notice, the certificate-debtor has come to the revenue court and taken various objections -really all objections that were open to him. Supposing this notice was bad, what the court might have done was to cancel the previous notice and issue a fresh notice after striking out the word "today" and inserting the actual date of the certificate therein. The result would have been that the same notice .....

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e tribunal. We have also been referred to the decision in Bharat Bank v. Employees of Bharat Bank [1950] SCR 459. We have also been referred to the criticism of the judgment of Lord Sankey in Justice and Administration of Law, 3rd edition, page 8, by William A. Robson. The question here is whether the Certificate Officer, the Commissioner and the Board of Revenue are courts within the meaning of item No. 3, Schedule II. There are two items relating to court in List II. Item No. 3 relates to administration of justice and constitution of all courts except the Supreme Court and the High Court, procedure in rent and revenue courts, fees taken in all courts except the Supreme Court. Item No. 3 suggests that there are revenue courts and all tribunals which deal with matters of revenue are not tribunals but may be courts. The question is whether the Public Demands Recovery Act relates to any revenue court and whether the Certificate Officer, the Commissioner and the Board are courts within the meaning of item No. 3. Item No. 3 refers to constitution- of courts for purposes of administering justice and not to serve the purposes of a particular group of statutes but with the avowed object o .....

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ot a seat where justice was being administered with regard to the entire field covered by public demands or revenue but the field was limited with respect to one item of public demand, namely, income-tax and allied matters. If we refer to the West Bengal Public Demands Recovery Act, we will find from the schedule therein that it refers practically to every demand of revenue which the State has or which the State may have. It covers a large number of items and as it can be found items are being added from time to time. The Public Demands Recovery Act regulates the procedure by which the revenue is realised in the State. The Certificate Officers have all the powers of a civil court for purposes of receiving evidence, administering oath, enforcing attendance of witnesses and compelling the production of documents under section 49. The Indian Limitation Act applies to such proceedings as a civil proceeding (sections 56 and 57). The decision of the Certificate Officer is appealable under section 51 ; it is revisable under section 53. There may be a review under section 54 and the decision of the Certificate Officer is final subject to the provisions of the Act, as under sections 34, 35 .....

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