TMI Blog1955 (5) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of Messrs. Sriram Jhabarmal. In all these cases certificate proceedings were commenced under the Public Demands Recovery Act at the instance of the Collector for recovery of the sums said to be in arrears. While these proceedings were pending, the Commissioner of Income Tax as representing the Union of India prayed to the Collector of 24-Parganas for recovery of the amounts mentioned in the certificate sent by the Income Tax Officer by arrest and detention of Nandaram Agarwalla, karta of the undivided Hindu family of Messrs. Sriram Jhabarmal and Kashiram Agarwalla, a member of the Hindu undivided family of Messrs. Sriram Jhabarmal. The Collector proceeding to use for the recovery of the sum the powers which a civil court has in recovering amounts due under a decree, issued notice, in accordance with the provisions of Order XXI, rule 37, of the Code of Civil Procedure, on these persons to show cause why they should not be arrested and detained. Showing cause they contended inter alia that the Collector had no jurisdiction to proceed in this manner. The Collector has overruled that contention and has directed that evidence should be taken, apparently to ascertain whether the condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not liable and there is no appeal against the Collectors decision. As the proviso stands it is open to the Collector to proceed at his sweet will in one case under the Public Demands Recovery Act and in another case under the Civil Procedure Code. As the provisions in the latter procedure are obviously more rigorous than those under the procedure of the Public Demands Recovery Act, this freedom of the Collector to proceed in one way against one assessee and under the other procedure against another assessee without any indication by the Legislature as to how he will use his discretion, amounts to denial of equal protection of laws. In my judgment this contention is unsound. It is important to remember that the law provided in section 46(2) is the same for all assessees. The law does not provide that some assessees may be dealt with in one manner while others belonging to the same class may be dealt with in another. That was the position in section 5(4) of the Income Tax Investigation Commission Act. That became again the position in section 5(1) of that Act, after section 34 of the Income Tax Act was amended. It was on this ground that the Supreme Court held section 5(4) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l court to be tried under the special procedure, while other offenders of the same category may be left to be tried by ordinary courts. In other words, section 4 permits the Provincial Government to make a discriminatory choice among persons charged with the same offence or offences for trial by a special court, and such absolute and unguided power of selection, though it has to be exercised within the class or classes of offences mentioned in the schedule, is no less discriminatory than the wider power of selection from the whole range of criminal law conferred on the State Government by the legislation impugned in Anwar Ali Sarkars case. The vice of discrimination, it is said, consists in the unguided and unrestricted power of singling out for different treatment one among a class of persons all of whom are similarly situated and circumstanced, be that class large or small. The argument overlooks the distinction between those cases where the Legislature itself makes a complete classification of persons or things and applies to them the law which it enacts, and other where the Legislature merely lays down the law to be applied to persons or things answering to a given description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in India. It is contended that the Governor could not give any retrospective operation to any law extended therein under section 92(1); and so there could be no valid assessment as regards the period from the 1st April of the year of assessment which had elapsed before the date of the notification and consequently, no valid assessment for the year at all. This argument appears to me to be entirely misconceived. The liability to Income Tax is under section 3 of the Income Tax Act. The annual Finance Acts legislate about the rate of tax and other facts that effect the assessment. Where, therefore, say, on the 6th April, 1945, a law is passed that for the year commencing with the 1st April certain Income Tax would be chargeable at a certain rate, there is no question of the retrospective operation at all. The law does not exist in the period from the 1st April to the 5th April. It comes into existence on the 6th April, and when it comes into existence it provides that for the unit 1st April to the following 31st March a certain rate will be chargeable. It assessment was made on one of these days, between the 1st and the 5th April, on the basis of the provision that became law on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lid in so far as it gave retrospective operation to the Acts, observed : Even so the appellants contention about the invalidity of the order of assessment made against them must fail. It is conceded that the Finance Act of 1940 did come into operation in the partially excluded areas from the date of the publication of the Notification, viz., 26th May, 1940. The dispute is only about its retrospective operation. The assessment under the circumstances would be proper because on the 26th May, 1940, when the Notification was issued, the assessment proceedings were pending before the Income Tax Officer. The blank left in section 3 of the Income Tax Act was filled in and the Income Tax Officer had therefore to make a computation on the footing of the then existing legislation and pass his order. On that interpretation of the Notification therefore the assessment order passed by the Income Tax Officer would be valid. For the reasons mentioned earlier and on the authority of Chatturams case in which that reasoning appears to me to have received support, I hold that the different Finance Acts which were extended to Kalimpong where the business was carried on, several days after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecover. The person seeking to recover is the Income Tax Department. It would be odd to think that the action taken to commence the proceedings would be action by somebody other than the person who seems to recover. The Collector or any other authority that may under the law take action to recover after the Income Tax Officer has taken the initial action by forwarding the certificate may act quickly or otherwise. It cannot be believed that the Legislature intended that delayed action on their part would have the effect of barring the remedy of the Income Tax Department. For these reasons, I am of opinion, that the action taken by the Income Tax Officer in forwarding the certificate to the Collector under section 46(2) is action on the taking of which a proceeding shall be deemed to have commenced. It may be mentioned that this view was taken also by the Madras High Court in Aruna Devi Jajodia v. Collector of Madras. In dealing with the question of limitation I have already said that action taken under the Code of Civil Procedure can in law be taken by the Collector even though no action has been taken under the Public Demands Recovery Act. Mr. Das tried to persuade us that unl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be in default provided that, when an assessee has presented an appeal under section 30, the Income Tax Officer may in his discretion treat the assessee as not being in default as long as such appeal is undisposed of. It was contended by Mr. Das that may here should be interpreted as must . I am unable to accept this argument. If may is to be interpreted as must , the words in his discretion become, in my judgment, meaningless. Mr. Das has drawn our attention to the judgment meaningless. Mr. Das has drawn our attention to the judgment of Mr. Justice Bose in Ladhuram Taparia v. Bagchi, in which the learned Judge expressed himself in these words : ... there is a duty on the respondent to refrain from enforcing payment of the tax under the notice of demand and to grant extension of time and stay their hands till the appeal is disposed of by the appellate authority. On that view Mr. Justice Bose directed the respondent, the Income Tax Officer, to forbear from taking steps by enforcing the notice of demand until the disposal of the appeal. This decision was, however, reversed on appeal, while the main ground on which the appeal was allowed was that no appeal had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the he will be biased in favour of the Income Tax Department. All the grounds urged in favour of Nandaram Agarwalla, therefore, fail and it must be held that the Collector has jurisdiction to continue the proceedings against Nandaram Agarwalla. Mr. Das has repeatedly said that it is unfair that his client should be arrested and detained even though the results of the appeals now pending may be that the assessments will be set aside or reduced. For myself I would think it ordinarily proper that the Collector should stay his hands till the appeals are disposed of specially when the amounts are large. There might be extraordinary circumstances in which it will be right not to stay his hands even though appeals might be pending. In any case that has nothing to do with the question of jurisdiction and the rule obtained by Nandaram Agarwalla must be discharged. As regards Kashiram Agarwalla, the additional ground taken that even supposing, as stated, that he is a member of the undivided Hindu family which has been assessed, he is not liable to arrest, requires consideration. There can be no doubt that Kashiram is liable for the debt even though he may not be the assessee. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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