TMI Blog1978 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... 29,1957, passed by the ITO and that the assessment order was void as it was against the company which was not in existence. It was further stated that the I.T. Department enforced the assessment order against tile plaintiff and had realised the amount of income-tax assessed against tile defunct company, i.e., Modi Supplies Corporation Ltd., from the plaintiff, that the plaintiff was not an assessee under the provisions of the I.T. Act, hence the realisation of the amount from the plaintiff was illegal and that the ITO also acted illegally in levying penalty of Rs. 7,000 under s. 46(2) of the Indian I.T. Act, 1922, upon the plaintiff. The plaintiff further alleged that since the very assessment was void, neither the penalty would have been imposed upon the plaintiff nor the amount could have been realised from it. It was also pleaded that the plaintiff-company was not made a party to any of the assessment proceedings by the I.T. Department against the transferor-company, hence the plaintiff could not be made liable for the assessment made on the transferor-company, and that since the amount was illegally realised under threat and coercion, the defendant was liable to refund t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or was the notice issued under s. 80 of the CPC invalid. With these findings the plaintiff's suit was dismissed with costs. Aggrieved by the decision of the trial court, the plaintiff has preferred this appeal and the learned counsel for the appellant has urged before us the following points: (1) that the assessment order against a defunct company was illegal; (2) that the plaintiff was not liable to pay the assessed amount against Modi Sugar (sic) Corporation Ltd.; (3) that no liability could be fastened on the plaintiff due to the amalgamation order passed by the Punjab High Court; (4) that the suit was not barred under the provisions of s. 67 of the Indian I.T. Act; (5) that the trial court erred in entertaining the plea about fraud and estoppel in the circumstances of the present case. Learned counsel for the respondent in reply submitted that the plaintiff's suit was rightly held to be barred by the provisions of s. 67 of the Indian I.T. Act, that the trial court was also right in holding that the plaintiff was liable to pay the tax assessed against the defunct company, i.e., the Modi Supplies Corporation Ltd. as according to the amalgamation order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the amalgamation order was passed on March 25, 1956, by the Punjab High Court and an observation was made in the order to the effect that the transferor-company shall be dissolved without winding up on the expiry of three months after the date of the aforesaid order, hence the company stood dissolved with effect from August 25, 1956. Since the assessment order was passed on March 29, 1957, by the ITO, it was clearly against a defunct company, hence the contention of the learned counsel for the appellant in this regard must be accepted. We propose to deal with the second and the last contention of the learned counsel for the appellant relating to fraud and estoppel together. The trial court has held the plaintiff liable to pay the tax assessed against Modi Supplies Corporation Ltd. on the ground, that according to the amalgamation order, the liability to pay the tax was transferred to the plaintiff and the trial court also fastened the liability on the plaintiff on the ground that it was the duty of the plaintiff to have appraised the income-tax authorities that the plaintiff had succeeded to the Modi Supplies Corporation Ltd. under the amalgamation order. In our opinion, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d., specially when it contested the Proceedings before the ITO concerned after the amalgamation order. It is noteworthy that in the written statement, the defendant-respondent had not taken the plea of fraud against the plaintiff. The court below proceeded to record a finding about, the fraudulent action of the plaintiff only on the basis of suspicion and surmises. According to the trial court, it was the duty of the plaintiff to get itself substituted in place of. Modi Supplies Corporation Ltd. before the ITO. We have not been shown any provision of law under the Indian I.T. Act, 1922 which casts a duty upon the plaintiff to get itself substituted in place of the transferor-company, namely, Modi Supplies Corporation Ltd. The findings of the trial court both with regard to estoppel and fraud are based on the erroneous assumption that the plaintiff has participated in the proceedings before the I.T. authorities. We have gone through the entire record and we consider it necessary to emphasise that there is no evidence at all which may lead to the inference that the plaintiff had participated in these proceedings. In Ex. A-4, the name of the appellant has been shown as Modi Supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der this Act has been taken for the assessment of his income or of the loss sustained by him or of the amount of refund due to him." It was contended on behalf of the appellant that the appellant was neither an assessee as is evident from the various orders of the I.T. authorities on the record, nor was any notice of demand served upon the plaintiff as is required under the provisions of s. 29 of the aforesaid Indian I.T. Act. The learned counsel for the respondent could not point out any evidence on the record to the effect that the notice of demand was served upon the plaintiff-appellant or its officer. Hence, we hold that the contention of the learned counsel for the appellant to the effect that the plaintiff-appellant was not liable to pay the assessed amount against Modi Supplies Corporation Ltd. is correct. Now, we proceed to deal with the third contention urged on behalf of the appellant, viz., that no liability can be fastened on the plaintiff by virtue of the amalgamation order passed by the Punjab High Court. The amalgamation order dated May 25, 1956, provided as follows : " (1) the whole of the undertaking property and liabilities of the transferor-company are h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing upon the question under consideration. We are of the opinion that the contention of the learned counsel for the appellant has force that the plaintiff-appellant is not liable to pay the amount assessed against the transferor-company, i.e., Modi Supplies Corporation Ltd. despite the amalgamation order because no valid proceedings were initiated against the plaintiff-appellant nor did the plaintiff appellant participate in the assessment proceedings before the I.T. authorities nor was the plaintiff-appellant a party to the proceedings under the Indian I.T. Act. Lastly, it was contended before us that the trial court wrongly held that the suit was barred by s. 67 of the I.T. Act. According to the learned counsel for the appellant, the I.T. authorities did not serve any notice upon the plaintiff-appellant nor did the plaintiff-appellant participate in the proceedings before the I.T. authorities, hence the plaintiff appellant was not bound by any order passed by the I.T. authorities. Since the I.T. authorities were not vigilant and did not care to proceed in accordance with law, their orders were clearly in violation of the principles of natural justice and the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0); (See at p. 434 of 22 STC): "(1) Where the statute gives a finality to the orders of the special tribunals the civil courts' jurisdiction must be held to be excluded if there is adequate remedy to do what the civil courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. (2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute Creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and shall be determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty with the fundamental principles of judicial procedure. The word 'jurisdiction' has both a narrow and a wider meaning. In the sense of the former, it means the authority to embark upon an enquiry; in the sense of the latter it is used in several aspects, one of such aspects being that the decision of the tribunal is in non-compliance with the provisions of the Act. Accordingly, a determination by a tribunal of a question, other than the one which the statute directs it to decide, would be a decision not under the provisions of the Act, and, therefore, in excess of its jurisdiction. " The learned counsel for the respondent, on the other hand, urged that the constitutionality or unconstitutionality of any provision of the I.T. Act was not involved on the facts of the present case, hence the suit was rightly thrown out by the trial court. He emphasised that the trial court was right in its reasoning for holding that the suit was not maintainable in view of s. 67 of the Indian I.T. Act. We have examined the respective contentions of the counsel for the parties. We think, in the circumstances of the present case, the ITO did not comply with the mandatory provisions of s. 29 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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