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Shaw Wallace and Company Ltd. Vs. Sri Venkateswara Bone Mill - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revision Petition No. 1241 of 1979
Judge
Reported in[1980]45STC416(AP)
AppellantShaw Wallace and Company Ltd.
RespondentSri Venkateswara Bone Mill
Appellant AdvocateP. Babulu Reddy ;and T. Bali Reddy, Advs.
Respondent AdvocateO. Adinarayana Reddy, Adv.
DispositionPetition allowed
Excerpt:
.....court can summon, if it is satisfied that the circumstances of the case justify such summoning and it is in accordance with the evidence act, assessment records from income-tax office or offices relating to the period from 1st april, 1964. 4. further 'these income-tax records, originals of which have been produced by the income-tax department, are certainly public documents forming the acts of public officers who discharge executive functions by imposing and collecting tax......to which government is a party. rule 61 in form 'and in substance is modelled on section 54 of the indian income-tax act (11 of 1922). the non obstante clause in section 54 in the words 'notwithstanding anything contained in the indian evidence act (1 of 1872), no court shall, save as provided in this act, be entitled to require any public servant to produce before it any such return, accounts, documents or record or any part of any such record, or to give evidence before it in respect thereof', however, are not incorporated in rule 61. what is the effect of the non-incorporation of the above words? the provision in section 137 of the indian income-tax act (43 of 1961) contains a like provision in section 54 as on the date of enforcement on 1st april, 1962, with similar 'prohibitions'.....
Judgment:

Raghuvir, J.

1. The defendant in the suit (O.S. No. 123 of 1974) summoned the Commercial Tax Officer at Guntur (C.T.O., Guntur) to produce the assessment orders for 1973-74 and 1974-75 in respect of the firm, Sri Venkateswara Bone Mill, Santhamaguluru, the plaintiff in the suit, and the 'record' relating to 'inspection' conducted by the officers of the commercial taxes department. The C.T.O., Guntur, at first brought to the notice of the court that the 'records' summoned under rule 61 of the Andhra Pradesh General Sales Tax Rules, 1957 (the Rules), are treated 'confidential' but later, the C.T.O. Guntur, having obtained permission from the Commissioner, produced the 'record' before the court. In subsequent proceedings, while the C.T.O., Guntur, was being examined as a witness, it was stated (by a memo) by the plaintiff that the record produced cannot be used and is 'prohibited' to be used except when 'Government is a party' which is not the case and the court 'shall not encourage the violation' of rule 61 of the Rules. The Principal Subordinate Judge at Narasaraopet thereupon on 19th February, 1979, in the order under revision held that Clause (iv) of rule 61, on the facts of the case, is not attracted in the instant case, and evidence with reference to the 'record' and the assessment orders can be recorded and sustained the objections raised by the plaintiff. The correctness of the decision and order of 19th February, 1979, is assailed by the defendant in these proceedings.

2. The Rules are promulgated on 15th June, 1957, under Section 39 of the Andhra Pradesh General Sales Tax Act (6 of 1957). Clause (i) is with reference to the record produced and orders made under the provisions of Act 6 of 1957. They 'shall not be disclosed' and 'shall be treated as confidential'. Clause (ii) contains seven Sub-clauses and they prescribe exceptions to the rule laid in Clause (i). Sub-clause (iv) of Clause (ii) states that the provision in Clause (i) will not apply to a suit or 'any matter' arising 'under the Act' to which Government is a party. Rule 61 in form 'and in substance is modelled on Section 54 of the Indian Income-tax Act (11 of 1922). The non obstante clause in Section 54 in the words 'notwithstanding anything contained in the Indian Evidence Act (1 of 1872), no court shall, save as provided in this Act, be entitled to require any public servant to produce before it any such return, accounts, documents or record or any part of any such record, or to give evidence before it in respect thereof', however, are not incorporated in rule 61. What is the effect of the non-incorporation of the above words? The provision in Section 137 of the Indian Income-tax Act (43 of 1961) contains a like provision in Section 54 as on the date of enforcement on 1st April, 1962, with similar 'prohibitions' and powers in the income-tax department. Section 138 as on today came into existence from 1st April, 1964, for Section 137 by the Amendment Act was omitted.

3. The scope and ambit of the omission of Section 137 in Act 43 of 1961 came to be considered by a Division Bench of this Court in a case reported in Pentakota Surya Appa Rao v. Pentakota Seethayamma [1976] 103 I.T.R. 222 at 236, 238, 244 and, in my view, the ratio decidendi helps in understanding the scope of rule 61. This Court in Pentakota Surya Appa Rao v. Pentakota Seethayamma [1976] 103 I.T.R. 222 at 236, 238, 244 held:

It is worthy of note that Section 54 of the 1922 Act and Section 137 of the 1961 Act laid the embargo on courts notwithstanding anything contained in the Evidence Act, 1872. That was a clear limitation placed on the provisions of the Indian Evidence Act by the special enactment relating to income-tax. So long as the non obstante clause continued, the provisions of the Indian Evidence Act could not be invoked. Now that the non obstante clause is taken away, the Indian Evidence Act applies to the procedure before court in its fullness and entirety. Reading the provisions we are convinced that the deletion of Section 137, which corresponded to the original Section 54, is very meaningful, leading to the inescapable conclusion that there is now no more prohibition against a court calling for the records when it acts under the provisions of the Indian Evidence Act.

(1) Even now, i.e., after the omission of Section 137 and recasting of Section 138, a court cannot summon records relating to assessments from any income-tax office or offices in respect of the period up to 1st April, 1964. (2) After that date, the provisions of the Evidence Act come into play and the court can summon, if it is satisfied that the circumstances of the case justify such summoning and it is in accordance with the Evidence Act, assessment records from income-tax office or offices relating to the period from 1st April, 1964.

4. Further 'these income-tax records, originals of which have been produced by the income-tax department, are certainly public documents forming the acts of public officers who discharge executive functions by imposing and collecting tax. One of us (Sambasiva Rao, Actg. C.J.) held in Vijaya Kumar Machinery and Electrical Stores v. Alaparthi Lakshmikanthamma [1969] 74 I.T.R. 224 that the income-tax returns are public documents. Since they are originals themselves of public documents, they require no further proof.

5. The extracts indicate that the Evidence Act (1 of 1872) is eclipsed by the operation of the non obstante clause; otherwise the powers of the court under the Evidence Act, 1872, are unfettered. When a witness is summoned before a court, the provisions of the Indian Evidence Act govern the examination of the witness. Following the decision or to be precise, if the principle in the decision is applied, rule 61 does not purport to limit the powers of the court apart from many other reasons having regard to the fact that the provision is contained in a State enactment and such a rule cannot override the provisions of the Indian Evidence Act. There is no objection raised for summoning the C.T.O., Guntur, as a witness before the court. There is under the Evidence Act no embargo in examining him with reference to the record produced for the 'record' is produced with the consent of the Commissioner. In that sense, rule 61 does not put any embargo on the powers of the court. What is 'confidential' in the rule has been argued by the learned counsel for the respondent in this revision: that the court should treat the record as confidential. Such a contention was considered and rejected in the case of Emperor v. Osman Chotani [1942] 10 I.T.R. 429, with reference to Section 54 of Act 11 of 1922, by the Bombay High Court. In the result, it is held that there is no embargo put on the powers of the court under rule 61. The objections raised before the lower court were not proper. The order of the Principal Subordinate Judge at Narasaraopet on 19th 1979, is set aside. The civil revision petition is allowed. In the circumstances of the case, no order as to costs.


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