1. The petitioners in this case. The Lord Krishna Sugar Mills Ltd, move for the issue of an appropriate writ commanding respondent 1, the Income-tax Officer Ambala, to forbear from taking any steps or further steps for enforcing the Notice of Demand dated 6-10-1951 or the order contained in the letter dated 2-7-1952.
2. The sole business of the petitioners is at Saharanpur but its registered office was at Lahore and upto the year 1947 it was subject to the Jurisdiction of the Income-tax Officer, Lahore. Due to disturbances before the partition of the country the registered office was shifted to Bupar.
3. The accounting period of the petitioners is from the first June of one year to the 3lst May of the following year. They filed three returns for the accounting period from 1-6-1944 to 31-5-1945, from 1-3-1945 to 31-5-1946, and from the 1st June 46 to 31-5-1947. The subject-matter of the dispute in the present case is the accounting period from 1-6-1945 to 31-5-1946, the assessment year being 1948-47. In regard to this year the Income-tax Officer found certain defects in the accounts and did not accept them. The cash book and ledger for the period 6-12-1945 to 12-1-1946 and vouchers from 1-6-1945 to the January 1946 were not produced before him. The Income-tax Officer also required the production of a copy of a judgment in liquidation proceeding given by Teja Singh, J., and also a copy of the petition for winding-up filed by Sm. Ram Murti Devi. In this return the profit shown by the petitioner was Rs. 1963/-only. On 30-9-1951 when the assessment was made the Income-tax Officer found the net Income to be Rs. 7,62,363/- and imposed a tax of Rs. 3,33,533/13/-. He acted under Section 23 (4), Income-tax Act. Notice for demand for this sum was sent on 6-10-1951 but the petitioners made an application to the Income-tax Officer under Section 27, Income-tax Act for cancellation of the assessment. On 17-11-1961 this was dismissed and an appeal was taken to the Appellate Assistant Commissioner, Income-tax. He dismissed the appeal on 17-3-1952 but remarked in the course of his order that the order calling for the judgment of Teja Singh J. and a copy of the petition for winding-up was not Justified. In May 1952 an appeal was filed in the Appellate income-tax Tribunal which is still pending.'
4. As against the original order of assessment an appeal was taken to the Appellate Assistant Commissioner of Income-tax in October 1951 and that is still pending.
5. An application was made to the Income-tax Officer by the petitioners praying that they may not be treated-defaulters under Section 45, Income-tax Act and that the recovery of the Income-tax be kept in abeyance, till after, their appeal was decided. This relief was nothing more, than an application for stay of recovery of Income-tax. On 26-10-1951 the Income-tax Officer ordered the Income-tax to be paid by monthly instalment two of Rs. 50,000/- each and the next two of Rs. 1,00,000/- each and the balance In the month following the last instalment. As nothing was paid on 25-1-1952, the Income-tax Officer imposed a penalty of Rs. 20,000/- under Section 46, Income-tax Act. The petitioners took the matter to the Inspecting Assistant Commissioner of Income Tax on 11-2-1952 and he replied by telegram (sic) them to pay Rs. 1,00,000/- and then their(sic) cation would be considered. On 15-2-1952(sic) moved the Commissioner of Income-tax and gave them time to pay up by 10-3-1952 and the extended the time to the 20th March,(sic) 1952 the petitioners applied to the Central(sic) of Revenue and an 'ad interim' stay was given on 22-3-1952, but this stay was vacated on(sic) 1952 and the application of the petitioners was rejected. On 2-6-1952, the Income-tax Officer wrote to the petitioners to pay up the income-tax by 8-7-1952 failing which a penalty will be imposed.
6. On 9-7-1952 the petitioners filed an application for writ here which was heard by a Division Bench on 9th July and then on 10th July and was adjourned for a fortnight. On 24-7-1952 a rule was issued by this Bench and a (sic) was also granted.
7. On 8-7-1952 the petitioners again appro the Income-tax Officer and it appears they(sic) approached the Commissioner on 16th July(sic) petition and prayed for the stay of recover(sic) income-tax. By a letter dated 25-7-1952 the(sic) missioner again fixed instalments for payment Rs. 50,000/- per month for three months of July, August and September 1952 and the payment of the balance was stayed for three months and it was to be paid by monthly instalments of(sic) 60,000/- in January, February and March(sic) and the balance to be paid by 31-3-1953.
8. Counsel for the petitioners submits that the Income-tax Officer has not exercised his discretion properly in accordance with sound judical principles and he should be commanded to order the stay of recovery of income-tax. He has pointed out to us the defect which according to his existed In the order of assessment dated 30-9-1951 the main objections being that the Income-tax Officer was affected by the non-production of the cash book and the ledger from 6-12-45 to 12-1-1945 and of vouchers from 1-7-1945 to 12-1-1946, and for failure to produce a copy of the judgment of Teja Singh J. and the petition winding-up by Sm. Ram Murti Devi, and also(sic) taking into consideration the profits made b(sic) another concern which is situate in the same area, Whether these reasons for rejecting the accounts of the petitioners were sound or otherwise is not for us to say at this stage. The fact remains that he applied Section 23(4), Income-tax Act and that is the subject-matter of an appeal before two tribunals and we cannot at this stage go into the matter. But argues counsel that having misdirected himself in regard to these matters the Income-tax Officer did not properly appreciate the application made by the petitioners and therefore has not exercised his discretion properly and in accordance with sound Judicial principles. He has also submitted that the Income-tax Officer did not exercise his Jurisdiction 'bona fide' and acted capriciously and has taken into consideration extraneous matters in so far as he was swayed by the defects that I have pointed out already. On these premises he has submitted that a writ should issue and he has relied on certain passag'es from Basu's Commentary on the Constitution of India at page 546. He has also referred to two Judgments, the first one is -- 'R. v. Cotham', (1898) 1 QB 802, where a 'mandamus' was issued commanding the justices to hear and determine the matter because they had disregarded the provisions of a statute and 'must have acted upon some considerations altogether outside that statute, they had not heard and determined the matter according to law'. But there is no such that in the present case. The next case he has at also upon is -- 'Sharpe v. Wakefield', (1891) AC in is out. I do not see now that case helps the petitioners, as there the licensing justices refused to renew a license, on the ground of the remote-that from police supervision and the character the necessities of the neighbourhood, and all of (sic) right from the Quarter Sessions upto the at the of Lords refused to interfere with this (sic). At page 181, Lord Hatsbury, L. C. said: 'The legislature has given credit to the Magistrates for exercising a judicial discretion--that they will fairly decide the questions submitted to them, and not by evasion attempt to repeal the law which permits public-houses to exist, or evade It by avoiding a plain exposition of the reason on which they act.' (9) The learned Advocate-General first of all received to Section 45, Income-tax Act Which deals time payment of taxes and according to with the tax shall be paid within the the at the place and to the person mentioned mente notice .....and any assessee failing to was shall be deemed to be in default, 'provided gago when an assessee has presented an appeal (sic) Section 30..... the Income-tax Officer may in ills discretion treat the assessee as not being in default, as long as such appeal is undisposed of ......' It is submitted by the Advocate-General that as far as the payment is concerned the (sic) is imperative and requires that the amount shall be paid. The discretion, if any, is in the matter of declaring a person to be or not to be in default, and he has referred to Sampath Iyengar's Indian Income-tax Act, page 1021, Para 1088, the purport of which is that there is no power of stay and although such a power was recommended to be vested in Assistant Commis-sioner and Appellate Tribunals by an Enquiry committee it was not put in the Act.
10. The Advocate-General also submits that the Income-tax Officer in the present case has exercised a discretion and it cannot be interfered with by a writ under Article 228 of the Constitution of India. He has first relied on Para. 1279 (sic) Vol. 9 of Halsbury's Laws of England, Halis- (sic) Edn.'at p. 751, where it is stated:
A writ of mandamus will, be granted ordering that to be done which a statute requires to be done. ..... it must appear that the statute in question imposes a duty, the performance , or non-performance of which is not a matter of- discretion, and if a power of discretion only, as distinct from a duty, exists a writ of mandamus will not be issued by the Court.'
He then referred to Para. 1296, at page 764, where the law 13 stated in the following words:
'Where' ....... any other tribunal of a judicial character have in fact heard and determined any matter within their Jurisdiction, no mandamus will issue for the purpose of review-ing their decision. The rule holds good even though such decision is erroneous not only as to facts but aiso in point of law and although the particular circumstances of the case are such that there is only one way of performing the duty in question.'
He also relied on Para. 1301 where certain cases are mentioned dealing with the question of the exercise of discretion.
11. In --'Julius v. Lord Bishop of Oxford' (1880) 5 AC 214, Earl Cairns, L. C., observed:
'I will only add that if I am right in holding that the bishop has, under the statute, a discretion as to proceeding or not proceeding, in the way in which the appellant calls upon him to do, your Lordships have not as it seems to me, any occasion or Indeed any right to examine into the manner in which, or the principles upon which, that discretion has been exercised. For the exercise of that discretion the bisnop, and the bisnop alone, is responsible, and to would, in my opinion, be inconsistent to hold that ills discretion is an answer to the application for a mandamus, and at the same tune, on that application, to criticise the grounds upon which that discretion has been exercised.'
In a later judgment of the House of Lords in --. Allcroit v. Lord Bisnop of London (1891) A. C. 668, Lord Hailsbury, L. C. said:
'But it is obvious that, to justify any writ or mandamus, it must be made to appear that the Bishop has not exercised the jurisdiction which the statute has vested: in him. Your Lordships have nothing to do with the question whether his judgment is right or wrong. Your Lordships would be exceeding your own Jurisdiction if you were attempting to review a Judgment, the jurisdiction to form which the Legislature has confided to the bishop and to the bishop alone.'
12. In --'R. V. Justices of Kingston', (1903) 86 L. T. 589, it was. held that a Court will not by a mandamus order a judicial tribunal to act in a particular manner. At p. 591, Channel, J. stated the law in the following words: 'I think also that even where the facts are all admitted, so that in the particular circumstances of a particular case -- as my brother has pointed out in this case -- there happens to be but one way of performing that duty, still the 'mandamus' goes to perform the duty, & not to perform it in a particular way.'
13. In Section 45, Specific Relief Act the principles are set out which are applicable in the matter of petitions under Article 226, see Civil Writ No. 279 of 1951. A 'mandamus' issues where the doing or forbearing of an act is clearly incumbent.
14. In America also the law is the same. See Hart's introduction to Administrative Law, p. 440. It has been decided by the Courts in America in regard to issuance of a writ of 'mandamus' that the leading principle is that 'mandamus' will be granted to command the performance of a ministerial act but never to control the exercise of discretion: --'Roberts v. United States', (1900) 178 Under Section 221; --'Ness v. Fisher', (1912) 223 Under Section 683.
I5. In --'Interstate Commerce Commission v. Humboldt Steamship Co.', (1912) 224 Under Section 474, it was held that it (mandamus) may be directed against a tribunal or one who acts In a Judicial capacity, to require it or him to proceed, the manner of doing so being left to his or Its discretion. This case Illustrates the use of 'mandamus' to set an administrative authority possessed of discretionary duties In motion, but not to direct how such discretion shall be exercised.
16. All that the petitioners seem to object to is that the order of the Income-tax Officer is bad that does not seem to be any reason for exercising Jurisdiction in their favour in regard to a matter where discretion has been exercised by the Income-tax Officer, The main attack of the petitioners seems to be that Section 23(4), Income-tax Act has been , wrongly applied by the Income-tax Officer but that has been affirmed by the Appellate Assistant Commissioner of Income-tax. But even if the order is wrong the proper way of attacking that would be by observing the procedure prescribed in the Income-tax Act and by statement of the case to this court. As was observed in --Elverton's case', (1895) 156 Under Section 211. 'the orderly administration of Justice will be better subserved by declining to exercise jurisdiction in the mode suggested' by the petitioner, trader Section 45 ,what ever discretion there is is of the Income-tax Officer and he having exercised it in a particular Manner which in my opinion is neither 'mala fide', nor capricious, nor done for collateral purposes, nor has he taken matters into consideration which are extraneous to the issue, it is not open to this Court to interfere in its supervisory Jurisdiction. (17) At this stage I may deal with a judgment of Rose, J., of Calcutta, --'Ladhuram Taparia v. R. K. Ragchi' : 20ITR51(Cal) , where the learned Judge issued a writ of 'mandamus' directing the stay of recovery of income-tax as there was a substantial question as to the constitution of the assessee firm and the Income-tax Officer was not sure and had made protective assessments in respect of five other firms in order to avoid any spiestion of limitation in case the main assessment made by him was set aside by the appellate authority. With very great respect I am unable to agree with the rule laid down by the learned Judge because when exercising his discretion under Section 45, Income-tax Act the Income-tax Officer has not to look to the correctness of his own order of assessment. There are other considerations which have to be seen at the time of declaring an assessee to be a defaulter or otherwise and for the reasions that I have given already.
18. I am, therefore, of the opinion that this petition fails and is dismissed with costs. Counsel's fee Rs. 200/-.
19. I agree.
20. It is a grave thing to interfere in the orderly administration of justice by the ordinary orsocial Tribunals constituted by the Legislature.If these Tribunals or the functionaries appointedunder the Special Acts do not perform theirduties they may be compelled by an appropriatewrit to do so. Where, however, they are actingwithin the limits of the powers assigned to themfay the Legislature and have exercised their discrection, this Court will not sit in judgment overthem and will not ordinarily interfere unless thediscretion has been exercised so capriciously orin such an outrageous manner as to attract theextraordinary Jurisdiction of this Court.