This is a writ petition under article 226 of the Constitution of India. The prayer is for the issue of a writ of certiorari quashing the recovery certificate dated 17th March, 1961, issued by the Income-tax Officer, District I(vii), Kanpur, to the Collector, Etawah, and for a mandamus restraining the Collector, Etawah, from realising the tax for the assessment year 1955-56, covered by the certificate dated 17th March, 1961.
The material facts leading up to this petition are these : The petitioner was assessed on an income of Rs. 16,939.78 nP. by the Income-tax Officer, District I(vii), Kanpur, as a Hindu undivided family : vide assessment order in respect of the relevant assessment year 1955-56. The said assessment order was made at Kanpur. In pursuance of the said order a notice of demand dated the 29th February, 1960, was served upon the petitioners counsel on the 22nd of March, 1960, requiring the petitioner to deposit the said amount of tax of Rs. 16,939.78 nP. on or before the 20th March, 1960. A copy of the demand notice which is said to be a true copy annexed to the petition as annexure 'B' does not give the place at which payment was required to be made by the petitioner. It, however, mentions that the challan is being enclosed for the purpose. It may be that the challan gives the particulars which are missing from the demand notice. In any event, the Income-tax Officer has not challenged the correctness of annexure 'B' filed by the petitioner.
Aggrieved by the notice of demand, the petitioner filed appeals but was unsuccessful. During the pendancy of the appeals the petitioner had deposited Rs. 4,000 in two lump sum installments of Rs. 2,000 on the 26th of November, 1960, and 25th of January, 1961, respectively towards the aforesaid demand. On the 17th of March, 1961, the Income-tax Officer, District I(vii), Kanpur, who had jurisdiction over the district of Etawah issued a certificate under section 46(2) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act), to the Collector, Etawah, requiring him to recover the balance of Rs. 12,939.78 nP. from the petitioner. A warrant of arrest and attachment was issued by the Tahsildar on the 22nd of April, 1963, for failure to pay the demand made. Thereupon, the petitioner filed this writ petition on the 21st of May, 1963.
The grounds challenging the issue of certificate dated the 16th March, 1961, are : (i) that the Income-tax Officer, District I(vii), Kanpur, had no jurisdiction to issue the certificate under section 46(2) of the Act to the Collector of Etawah, and consequently the Collector of Etawah had no jurisdiction to act upon the same; and (ii) that there was no default under section 45 of the Act, and, therefore, no certificate under section 46(2) of the Act could have been issued.
The second ground taken may require some explanation and it is that, though the demand notice was dated 29th February, 1960, and required payment of the amount of tax due to be made on or before the 20th March, 1960, the notice was not served till after the period stipulated therein for payment had expired and as such the petitioner cannot be said to be an assessee in default within the meaning of section 45 of the Act.
Section 45 reads :
'45. Any amount specified as payable in a notice of demand...... under section 29.....shall be paid within the time, at the place and to the person mentioned in the notice or order, or if a time is not so mentioned, then or before the first day of the second month following the date of the service of the notice or order, and any assessee failing so to pay shall be deemed to be in default.....'
The contention of the petitioner is that there could be no non-compliance with the notice within the time stipulated when the time which was given for compliance had already expired before the notice was served, and, therefore, he could not be considered to be an assessee in default.
On the other hand, the learned standing counsel for the department contends that in the circumstances of the case such notice should be treated and deemed to be one, not specifying any time therein and, therefore, the petitioner was bound to invoke and comply with that part of section 45 which provides '.....then on or before the first day of the second month following the date of the service of the notice or order....' In other words, the petitioner cannot escape from his liability to comply with the demand notice merely on account of the latches on the part of the office of the Income-tax Officer to serve the notice before the period specified therein had expired and it was the petitioners duty to have treated such notice as not specifying any date and to have made compliance therewith on or before the first day of the second month following the date of the service.
It is, however, not necessary in this case to decide this point, as I have come to the conclusion that the certificate issued under section 46(2) by the Income-tax Officer, District I(vii), Kanpur, to the Collector, Etawah, was without jurisdiction as it was not in accordance with section 5 of the Revenue Recovery Act (I of 1890).
Section 46, which falls within Chapter VI of the Act and which deals with the recovery of tax and penalties is concerned with the mode and time of recovery when the assessee is in default in making payment of income-tax, that is, when he is an assessee in default as provided in section 45 of the Act. Thus, apart from levying penalty for such default, the Income-tax Officer has been given the right to forward a certificate for recovery to the Collector under section 46(2) of the Act as if it were an arrear of land revenue. Section 46(2) runs :
'46. (2) The Income-tax Officer may forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee, and the Collector, on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue.'
It may be noted that the certificate has to be forwarded to 'the Collector' and not to 'any' Collector that the Income-tax Officer may deem fit so to do. In order to determine who is 'the Collector' to whom the recovery certificate must necessarily be sent, very little assistance can be had from the Act itself as the expression 'the Collector' has not been defined in the Income-tax Act and it appears for the first time in section 46(2) of the Act. Some help, however, can be obtained from the Revenue Recovery Act (I of 1890), which was enacted to make a better provision for the recovery of certain public demands. In section 2 of the Revenue Recovery Act, 'Collector' means 'the chief officer in charge of the land revenue administration of a district' and a 'defaulter' means 'a person from whom an arrear of land revenue, or a sum recoverable as an arrear of land revenue is due...' Section 3 of Act I of 1890 provides for the recovery of public demands by enforcement of process in other districts than those in which they became payable. Section 3 reads :
'3. (1) Where an arrear of land revenue, or a sum recoverable as an arrear of land revenue, is payable to a Collector by a defaulter being or having property in a district other than that in which the arrear accrued or the sum is payable, the Collector may send to the Collector of that other district a certificate in the form as nearly as may be of the Schedule, stating...'
This section deals with a case where land revenue or a sum as an arrear of land revenue is payable to be a Collector by a 'defaulter'. If such defaulter has property in the district in which the amount is payable to the Collector, then no further complication arises. But if, on the other hand, the defaulter is not in the district of the Collector or he has no property in the district of the Collector then such Collector may send it the Collector of that other district a certificate for recovering the amount due. The essential condition for the applicability of section 3 is that the amount payable must be 'payable to a Collector' by a defaulter. Section 5 of Act I of 1890 reads :
'5. Where any sum is recoverable as an arrear of land revenue by any public officer other than a Collector or by any local authority, the Collector of the district in which the office of that officer or authority is situate shall, on the request of the officer or authority, proceed to recover the sum as if it were an arrear of land revenue which has accrued in his own district, and may send a certificate of the amount to be recovered to the Collector of another district under the foregoing provisions of the Act, as if the sum were payable to himself.'
This section deals with the recovery to be made as arrears of land revenue by a public officer other than the Collector. Such other officer is required to make a request only to the Collector of the district in which his office is situate. He cannot make a request to the Collector of another district. The word 'office' indicates that an officer may have more than one office but the main or the head office of that particular office, wherever it be situate, will determine the jurisdiction of the particular Collector to whom a request for recovery can be made by such officer. Whereas, section 3 comes into play when the arrear of revenue or a sum recoverable as arrear of revenue is payable to a Collector by a defaulter, section 5 comes into play when arrear of revenue is to be recovered by any public officer other than a Collector. When such public officer makes a request to the Collector of the district in which his office is situate, than only does the Collector obtain jurisdiction to proceed to realise the arrear as if it were an arrear of land revenue for and on behalf of such public officer who may have made the request to him. In the present case the demand of tax was by the Income-tax Officer and not by the Collector. It is only when a certificate is issued under section 46(2) read with section 5 of the Act I of 1890, that the Collector obtains jurisdiction to realise the amount of tax due. The present case would, therefore, be clearly governed by the provisions of section 5 of the Revenue Recovery Act and as the Income-tax Officer was one who had made the assessment at Kanpur, whose designation was 'the Income-tax Officer I(vii), Kanpur', and in the absence of anything to the contrary to show in the counter-affidavit that the head or main office of that officer was not at Kanpur but at Etawah, it would be impossible to hold that such officer could have issued a recovery certificate direct to the Collector, Etawah, instead of the Collector of Kanpur.
It may be that this officer had jurisdiction also over the assessees at Etawah and it may even be that he had no jurisdiction at all over any assessee in Kanpur, none the less section 5 of the Act, 1 of 1890, would not confer on such Income-tax Officer jurisdiction in the matter of the issue of a certificate of recovery to the Collector of Etawah, as his office happens to be situate at Kanpur. It is true that the petitioner does not set out in so many words that the office of the particular Income-tax Officer was at Kanpur. But on the materials on record, noticed hereinabove, there is no escape from the conclusion that the office of this particular officer was at Kanpur. That being the position, under section 5 of the Act, 1 of 1890, the Collector of Kanpur district and not of Etawah district could alone have been moved by the officer to recover the same if it were an arrear of land revenue. The recovery certificate having been issued by the Income-tax Officer, Kanpur, direct to the Collector, Etawah, would not confer any jurisdiction on the Collector of Etawah to proceed with the recovery. The recovery proceedings would, therefore, be without jurisdiction.
Mr. Gulati, the learned standing counsel, has relied upon a Calcutta decision in D. N Bhattacharya v. Commissioner of Income-tax, for the proposition that the present case would fall within section 3 of the Revenue Recovery Act, 1 of 1890, and not under section 5. The decision relied upon, however, makes no mention of the Revenue Recovery Act at all. It only deals with the Public Demands Recovery Act (Bengal Act III of 1913), sections 9 and 37. On a consideration of these provisions of the Public Demands Recovery Act, it was held that the jurisdiction of the Certificate Officer under the Public Demands Recovery Act does not depend on the situation of the property of the certificate-debtor but upon the place where the demand is payable. Without knowing the exact provisions that were under consideration there, it is not possible to equate them with sections 3 and 5 of the Act (1 of 1890). As against this, there are authorities of Kerala, Madhya Pradesh and Madras High Courts which support the view that I have taken : see T. R. Subramania Iyer v. Income-tax Officer, New Delhi, Kundanlal Malhotra v. Income-tax Officer, B-Ward, Satna and Sri Raja Venkata Ramayya Appa Rao Bahadur Varu v. Collector of Madras and also Civil Misc. Writ No. 834 of 1960 (Seth Satramdas v. Income-tax Officer), in which a learned single judge of this court following the view of the Madhya Pradesh High Court in Kundanlal Malhotras case had quashed the recovery proceedings in somewhat similar circumstances.
For the reasons given above, a direction in the nature of prohibition shall issue to the Income-tax Officer and the Recovery Officer, Etawah, prohibiting them from proceeding with the certificate of recovery dated the 17th March, 1961.
Accordingly, the petition is allowed with costs.