1. Writ Appeal No. 139 is from the decision in O. P. No. 317 of 1963 and Writ Appeal No. 140 is from the decision in O. P No. 712 of 1963. The Income-tax Officer, Alleppey, the third respondent in both the original petitions, is the appellant before us.
2. The Income-tax Act, 1961, came into force on 1-4-1962 Section 2(44) of that Act defined the expression 'Tax Recovery Officer' as follows:
'Tax Recovery Officer' means-
(i) A Collector;
(ii) an additional Collector or any other officer authorised to exercise the powers of a Collector under any law relating to land revenue for the time being in force in a State; or
(iii) any gazetted officer of the Central or a State Government who may he authorised by the Central Government, by notification in the Official Gazette, to exercise the powers of a Tax Recovery Officer'.
3. Section 4 of the Finance Act, 1963, substituted a new definition for the definition extracted above and directed that the new definition 'shall be and shall be deemed always to have been substituted' Under the new definition the State Government, for the first time, obtained the power to make a State officer a Tax Recovery Officer by authorising him to exercise the powers of a Tax Recovery Officer. The new definition reads as follows:
'Tax Recovery Officer' means-
(i) a Collector or an additional Collector;
(ii) any such officer empowered to effect recovery of arrears of land revenue or other public demand under any law relating to land revenue or other public demand for the time being in force in the State as may be authorised by the State Government, by general or special notification in the Official Gazette, to exercise the powers of a Tax Recovery Officer;
(iii) any Gazetted Officer of the Central or a State Government who may be authorised by the Central Government, by general or special notification in the Official Gazette, to exercise the powers of a Tax Recovery Officer'.
4. The Government of Kerala, for the first time, made the necessary authorisation by a notification, S. R. O. No. 683/63 dated 14-8-1963, published in the Kerala Gazette dated 20-8-1963. The notification reads as follows
'in exercise of the powers conferred by Sub-clause (ii) of Clause (44) of Section 2 of the Income-tax Act, 1961 (43 of 1961) read with Sub-rule (2) of Rule 7 of the Income-tax (Certificate Proceedings) Rules, 1962, the Government of Kerala hereby authorise every Additional Personal Assistant to the District Collector, Revenue Divisional Officer, Sub-Collector, Assistant Collector, Taluk Tahsildar and Special Deputy Tahsildar for collection of arrears of income-tax who has been empowered to effect recovery of arrears of land revenue under the Travaneore-Cochin Revenue Recovery Act, 1951 (Act VII of 1951) of the Madras Revenue Recovery Act, 1864 (Act II of 1864) as the case may be, to exercise the powers of a Tax Recovery Officer under the said Income-tax Act, 1961, in respect of the areas for which he is performing the functions relating to the recovery of arrears of land revenue under the aboye mentioned Travancore-Cochin Revenue Recovery Act, 1951, (Act VII of 1951) or the Madras Revenue Recovery Act, 1864 (Act II of 1864).
This Notification shall be deemed to have come into force on the 1st day of April 1962'
5. A State officer who can be considered to be a Tax Recovery Officer only by virtue of the notification had taken action for the recovery of income-tax subsequent to 1-4-1962 and prior to 14-8-1963. The question for determination, is whether his action can be sustained in view of the provision in the notification which says:
'This Notification shall be deemed to have come into force on the 1st day of April 1962'
6. In India Sugars and Refineries Ltd v. State of Mysore, AIR 1960 Mys 326 the Mysore High Court held that an executive Government exercising subordinate and delegated legislative powers cannot act retrospectively unless the power to act retrospectively had been expressly conferred by the Legislature on that Government, This view has been accepted by Mr. Justice Subba Rao in his minority opinion in Indramani v. W. R. Natu, AIR 1963 SC 274. The majority decision, however, death with the matter as follows :
'The submission of learned counsel was that though a legislature which had plenary power in this regard could enact a statute having a retrospective operation, subordinate legislation, be it a rule, a bye-law or a notification, could not he made so as to have retrospective operation and that to that extentthe rule, bye-law or notification would be ultra vires and would have to be struck down, relying for this position on the decision of the Mysore High Court reported in AIR 1960 Mys 326. We do not however consider it necessary to canvass the correctness of this decision or the broad propositions laid down in it. It is clear law that a statute which could validly enact a law with retrospective effect could in express terms validly confer upon a rule making authority a power to make a rule or frame a bye-law having retrospective operation. If this were so the same result would follow where the power to enact a rule or a bye-law with 'retrospective effect' so as to affect pending transaction, is conferred not by express words but where the necessary intendment of the Act confers such power.'
7. There is no doubt that Section 2(44) of the Income-tax Act, 1961, does not expressly authorise any notification with retrospective effect We take the view that there is also no such authorisation by necessary intendment or implication.
8. It is true that the new definition has to be deemed, in view of Section 4 of the Finance Act, 1963, to have been in existence from the very inception of the Income-tax Act, 1961. The Collector is a Tax Recovery Officer under both the old and the new definitions and that may be the reason for the new definition in substitution of the old being given a retroactive operation to the commencement of the Act. In any case it is not possible to infer from the legal fiction embodied in Section 4 of the Finance Act, 1968, 'shall be and shall be deemed always to have been substituted', any conferment of a power for a retrospective authorisation by the State.
9. In the light of our conclusion that nopower has been conferred on the State Government, either expressly or by necessaryintendment or implication, to give retrospective operation to any authorisation that it maymake under Section 2(44) the action taken cannothe sustained and the decision to that effect inthe judgments under appeal has to be upheld.The writ appeals fail and are hereby dismissedNo costs.