TMI Blog1966 (10) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... g the issue as to the legal validity of the order made by the Income-tax Officer. In the second place, Mr. S. T. Desai is not right in his contention that the effect of section 13 of the 1949 Act is to obliterate the Ordinance completely from the statute book. Appeal dismissed. - - - - - Dated:- 10-10-1966 - Judge(s) : V. RAMASWAMY., J. C. SHAH., V. BHARGAVA JUDGMENT The judgment of the court was delivered by RAMASWAMI J.---This appeal is brought, by special leave, from the judgment of the High Court of Bombay dated September 27, 1962, in Income-tax Reference No. 39 of 1961. The respondent-Godavari Sugar Mills Ltd.---is a public limited company. The assessment year in this case is 1949-50. The relevant accounting year ended on May 31, 1948. The annual general meeting of the respondent was held on December 30, 1948. At that meeting a sum of Rs. 3,68,433 was declared as the dividend. Since the dividend fell short of the requisite precentage under section 23A of the Income-tax Act (hereinafter called the " Act "), the Income-tax Officer passed an order, on March 11, 1955, under the provisions of section 23A of the Act that the undistributed portion of the assessable income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d : (a) six per cent. of the paid up capital of the company as on the last day of the period in respect of which the dividend is distributed, after deducting from such capital all amounts attributable to the capitalisation, on or after the first day of April, 1946, of one or more of the following, namely, reserves, profits and appreciation of assets, or (b) the average annual dividend of the company, determined in the manner specified in sections 5 to 7, whichever is higher." Section 12 provided : " 12. Any director, managing agent, manager and other officer or employee of a company who contravenes or attempts to contravene, or abets the contravention of or attempt to contravene, any of the provisions relating to the distribution of dividends, or the issue of preference shares, contained in this Ordinance or in any rule, notification or order issued thereunder, shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both." Section 2(b) of the Ordinance defines a " company " to mean " a public company as defined in clause (13A) of section 2 of the Companies Act." It is not disputed by the parties that the respondent-com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the respondent-company to declare further dividends and to comply with the requirements of section 23A of the Act. It was argued that as the respondent-company failed to do so the Income-tax Officer was legally justified in making the order under section 23A. On behalf of the respondent Mr. Sen contended that section 23A(1) of the Act did not contemplate declaration of further dividend after the holding of the annual general meeting and, in any event, the provisions of the Companies Act did not permit the declaration of any further dividend after the holding of the annual general meeting. Mr. Sen referred to the decision of the Calcutta High Court in Raghunandan Neotia v. Swadeshi Cloth Dealers Ltd. in support of this argument. It is not, in our opinion, necessary to express any concluded opinion on this aspect of the case, because we consider that, in any event, in view of the fact that the Ordinance was in force on the date of the holding of the annual general meeting of the respondent, the Income-tax Officer had no power to pass any order under section 23A of the Act. The Ordinance was in force on December 30, 1948, on which date the annual general meeting of the respondent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. There is a manifest repugnancy between the provisions of the Ordinance and of section 23A of the Act and it must be taken that there is an implied repeal of section 23A of the Act to the extent of that repugnancy created by section 3 of the Ordinance and so long as the Ordinance remains in force. In view of the provisions of sections 3 and 12 of the Ordinance, the fiction created by section 23A cannot, therefore, be brought into existence and the Income-tax Officer cannot pass an order under the provisions of that section. As observed by Lord Asquith of Bishopstone in East End Dwellings Co. Ltd. v. Finsbury Borough Council : " If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of those in this case is emancipation from the 1939 level of rents. The statute says that you must imagine a certain state of affairs ; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corolla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not--- (a) revive anything not in force or existing at the time at which the repeal takes effect ; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder ; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed ; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed ; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid ; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the Repealing Act or Regulation had not been passed." The reason for enacting section 6 of the General Clauses Act has been described by this court in State of Punjab v. Mohar S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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