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Union of India (Uoi) Vs. Mrs. Sarojini Rajah - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberAppeal No. 818 of 1967
Judge
Reported in[1974]97ITR37(Mad)
ActsIncome Tax Act, 1922 - Sections 24B, 29 and 67B; Limitation Act, 1908 - Sections 14 - Schedule - Articles 62, 96 and 120; Contract Act - Sections 72
AppellantUnion of India (Uoi)
RespondentMrs. Sarojini Rajah
Appellant AdvocateV. Balasubrahmanyan and ;J. Jayaraman, Advs.
Respondent AdvocateS. Swaminathan and ;K. Ramgopal, Advs.
Cases ReferredIn Inderchand v. Secretary of Stale
Excerpt:
direct taxation - mistake - sections 24b, 29 and 7b of income tax act, 1922, section 14 and articles 62, 96 and 120 of schedule to limitation act, 1908 and section 72 of contract act - any payment made whether voluntarily or otherwise under mistake either of law or fact could be recovered once mistake is established - section 72 enjoins person to whom money has been paid or anything delivered by mistake or under coercion to repay or return it - provision wide enough to cover mistake of law as well as fact. - - 1. the defendant who was unsuccessful in the court below is the appellant. 2. the defendant, the union of india, represented by the commissioner of income-tax, madras resisted the suit contending that there could not have been any mistake as alleged by the plaintiff, that the.....ramanujam, j. 1. the defendant who was unsuccessful in the court below is the appellant. the respondent herein filed a suit for repaymentof a sum of rs. 15,37096 from the appellant with interest thereon at 6 per cent. per annum. her case was that immediately after her husband died on november 30, 1959, she received a number of notices from the income-tax department in respect of the arrears of income-tax stated to be due by her husband, including copies of notices issued to the banks attaching all monies and funds belonging to her husband, that on receipt of those notices, she intimated to the income-tax officer that she had no monies or assets of her husband, that a notice of demand dated december 10, 1959, had also been issued to the plaintiff calling upon her to pay a sum of 15,370.96.....
Judgment:

Ramanujam, J.

1. The defendant who was unsuccessful in the court below is the appellant. The respondent herein filed a suit for repaymentof a sum of Rs. 15,37096 from the appellant with interest thereon at 6 per cent. per annum. Her case was that immediately after her husband died on November 30, 1959, she received a number of notices from the income-tax department in respect of the arrears of income-tax stated to be due by her husband, including copies of notices issued to the banks attaching all monies and funds belonging to her husband, that on receipt of those notices, she intimated to the Income-tax Officer that she had no monies or assets of her husband, that a notice of demand dated December 10, 1959, had also been issued to the plaintiff calling upon her to pay a sum of 15,370.96 stated to be the tax due on a provisional assessment made under Section 23B of the Income-tax Act, that she understood the said notice to be one served on her in pursuance of a provisional assessment of her own income and in that mistaken view she had paid the said amount on December 26, 1959. A few days later, on 28th January, 1960, the plaintiff received another demand notice for payment of a sum of Rs. 10,487.47 in pursuance of a provisional assessment on her own income for the same assessment year 1959.60. It was only then the plaintiff realised that the earlier demand was in respect of the provisional assessment made on the return made by her husband. Thereupon, the plaintiff wrote to the Income-tax Officer stating that the payment of Rs. 15,370.96 was made by her under a mistake and requesting him to adjust the said sum against the demand of Rs. 10,487.47, which he declined to do. To avoid penal consequences, the plaintiff paid also the said sum of Rs. 10,487.47. Thereafter, the plaintiff applied to the Commissioner of Income-tax for refund of the said sum of Rs. 15,370.96 which was refused, In the above circumstances the plaintiff filed the suit on June 29, 1963, for refund of the said amount after issuing a notice under Section 80 of the Code of Civil Procedure on the ground that she could not be made liable for the tax due by her husband as she had no assets of her husband and that the collection of the said amount from her and its retention and refusal to refund are not lawful.

2. The defendant, the Union of India, represented by the Commissioner of Income-tax, Madras resisted the suit contending that there could not have been any mistake as alleged by the plaintiff, that the plaintiff could not have understood the notice of demand dated 10th December, 1959, as one issued in pursuance of a provisional assessment made With reference to the return filed by her, that the said notice of demand itself made it perfectly clear that it was being served on the plaintiff as the legal representative of the deceased, that the assets of the deceased having devolved on the plaintiff and others they are liable to pay the tax due by the deceased. According to the defendant the plaintiff paid the suit amount with full knowledge that it was the tax due in respect of her husband's estate and with anintention to discharge the same, that it is not true that there was any mistake and that the mistake was known only on receipt of the demand notice dated January 28, 1960, as alleged, that the plaintiff having voluntarily paid the said amount with the full knowledge of what she was doing and in her capacity as legal representative of her deceased husband she is not entitled to get a refund of the suit amount. It was also contended that the suit is unsustainable under Section 72 of the Contract Act and that it is also barred by limitation as it has been filed more than three years after the payment. The defendant also raised by way of an additional written statement the plea that the suit is in substance to set aside a provisional assessment made under Section 23B of the Income-tax Act, and, therefore, it is barred under Section 67 of the said Act and that the only remedy open to the plaintiff is to resort to the remedies provided under the Income-tax Act and not to come before a civil court.

3. The plaintiff has later amended her plaint on 14th September, 1966, alleging that the issue of the demand notice setting out the penal consequences dated December 10, 1959, and the collection of the suit amount from her was also under coercion. As a result of this the defendant filed another additional written statement stating that the notice of demand was issued in the appropriate form prescribed under Rule 23B of the Income-tax Rules, that the same only mentions the statutory consequences of default in payment of tax, that such demand does not amount to coercion unless it is followed up by actual threat or coercive steps and that, therefore, the plea of coercion is not only false but also inconsistent with her plea of mistaken payment.

4. On these rival contentions the court below held that the payment in question by the plaintiff was under a mistaken impression that the demand related to her own assessment, that in any event, the payment should be taken to have been made under coercion and that, therefore, the plaintiff is entitled to invoke Section 72 of the Indian Contract Act and recover the suit amount. The court below also held that the suit is maintainable in a civil court for the reliefs claimed and that Section 67 of the Income-tax Act is not a bar. It further held that the suit is not barred by limitation as the claim for refund on the ground of coercion would fall under Article 120 of the Limitation Act of 1908, though it expressed the view that if the suit is taken as one for refund of the tax paid on the ground of a mistake, it will be barred by limitation in view of Article 96 of the Limitation Act. In that view, the trial court upheld the plaintiff's claim and decreed her suit as prayed for.

5. Thus the questions that arise for consideration in this appeal are:

'(1) Whether the plaintiff paid the suit amount under a bona fide mistake that the notice of demand dated December 10, 1959, related to her own assessment as alleged by her ?

(2) Whether the payment had been made by the plaintiff voluntarily as a legal representative of her husband to discharge her legal liability as alleged by the defence or whether the plaintiff paid the suit amount on account of coercion as alleged ?

(3) Whether Section 72 of the Contract Act can be invoked by the plaintiff in this case to get a refund of the suit amount ?

(4) Whether the suit is barred by limitation as alleged by the defendant ?

(5) Whether the suit is barred under the provisions of the Indian Income-tax Act, 1922 ?'

6. Regarding questions Nos. 1 and 2, it is not in dispute that the plaintiff and her husband were income-tax assessees long prior to 1959 and that her husband died on November 30, 1959, after submitting a return in respect of his income for the assessment year 1959-60, and that his obsequies continued up to the middle of December, 1959. The plaintiff received the demand notice, exhibit A-I, dated December 10, 1959, issued by the Income-tax Officer on the basis of the provisional assessment made under Section 23B of the Income-tax Act on the return filed by her husband. The said notice is in Form 20B as per the Income-tax Rules. The body of the said notice is typed and the address, status, amount, date, etc., are handwritten. The contents of the said notice are to the effect that the same is in respect of the- provisional assessment under Section 23B. It is not however, made clear whether the provisional assessment related to her own return or to the return submitted by her husband. However, the address portion as originally written on the top of the notice reads : 'Srimathy Sarojini Rajah, Widow of H.D. Rajah, and other legal heirs of late H. D. Rajah.' According to the plaintiff as the body of the notice appeared to be as one issued to her demanding payment of the income-tax provisionally assessed on the basis of her return regarding her own income, she understood the demand as relating to her own assessment. According to the defendant, however, the address portion of the notice would make it clear that it has been served on the plaintiff in respect of the provisional assessment made on the basis of the return submitted by H. D. Rajah regarding his income while he was alive, and the G.I.R. number given in the notice would also indicate that the demand was in respect of the return filed by the deceased, H. D. Rajah, and, in any event, the notice having been' received by the auditor on behalf of the plaintiff the auditor would have explained to the plaintiff the true position as regards the demand as to whether it related to her assessment or to the assessment of her husband.

7. The plaintiff as P.W. 1 has deposed that on account of the death of her husband she was in distress and not keeping good health in December, 1959, when she received the demand notice exhibit A-1 as well as similarnotices, that on a mistaken impression that the demand related to her own assessment and with a view to avoid the levy of heavy penalty as stated in the demand notice, she remitted the suit sum from out of her own funds under the receipt, exhibit A-2, that towards the end of January, 1960, when she received another notice in relation to her own assessment she realised the mistake that the earlier demand related to her husband's assessment, that immediately she wrote to the Income-tax Officer informing him about her bona fide mistake in making the earlier payment as per the demand notice, exhibit A-1, and asking for the refund of the amount paid by her under a mistake. The court below has accepted the evidence of P.W. 1 as regards the bona fide mistake spoken to by her and there appears to be no reason as to why P.W. 1 should not be believed on this aspect of the case. Her evidence appears to be quite consistent with the other documents in the case. Exhibit A-3 is a letter dated December 12, 1959, from the Income-tax Officer addressed to the plaintiff wherein the plaintiff was informed that the total tax due by her husband in respect of his assessment for the year 1954-55 was Rs. 1,27,323 and that in view of the earlier orders passed by his predecessor, the plaintiff has to pay a sum of Rs. 45,776.31 and also furnish security for the balance amount of Rs. 81,546.82 before December 22, 1959, as a condition for the continuance of the stay, as otherwise, the entire amount would be recovered treating the plaintiff as a defaulter. As soon as the letter was received by the plaintiff, she replied under exhibit A-4 dated December 22, 1959, stating that as the funeral obsequies of her husband were completed only on 13th December, 1959, she had very little time to acquaint herself with the actual state of affairs, his assets and liabilities and that all his monies in the hands of various parties have already been attached, that she is not in possession of any of the assets of her husband, that in case she collects any of his assets she shall hold them in trust for the department and pay over the same towards his arrears of income-tax and that beyond doing that she was not in a position to furnish security to the extent of Rs. 81,546.82 as called upon, as she was in no way liable for the same beyond the amount received by her from the assets of her husband. She also stated that she being one of the legal representatives of the deceased it is not legal or justifiable to treat her alone as a defaulter in respect of the arrears of income-tax or to start recovery proceedings only against her. The suit amount has been paid three days after the said reply in exhibit A-4. It is inconceivable how the plaintiff who stated that she is not in possession of any of the assets of the deceased and that as such she is not liable to be treated as a defaulter cooly and voluntarily paid the amount due by her husband three days thereafter from and out of her own funds unless it be that she was under the impression that the demand was in respect of her own assessment. Itis not the case of the defendant that the plaintiff paid the said sum of Rs. 15,370.96 out of the assets of the deceased.

8. The learned counsel for the appellant would, however, point out that the demand notice, exhibit A-1, has been received by the auditor and he has forwarded the same to the plaintiff with an endorsement to pay the tax within a particular date and the auditor could not have made that endorsement without knowing as to whose assessment it relates. The plaintiff in her evidence had deposed that the notice, exhibit A-1, was received by her direct though she is not able to explain as to how the auditor's signature finds a place in the office copy of the notice. The Income-tax Officer as D.W. 1 identifies the signature of the auditor. Even assuming that the auditor has received this notice and has instructed the plaintiff to pay the amount within a particular time, still unless it is shown that the plaintiff was made aware of the fact that the demand was in relation to her husband's assessment either by the auditor or otherwise, the possibility of the plaintiff making a mistake cannot be ruled out as the body of the notice, exhibit A-1, does not refer to the demand as relating to her husband's assessment. Even if the auditor has received the notice, exhibit A-1, and transmitted the same with instruction for payment as alleged by the defendant, still the plaintiff might have been under the impression that the demand related to her assessment and made the payment. It is clear from the evidence of P.W, 1 that she was not quite aware of the income-tax affairs and that her deceased husband used to look after the income-tax assessment relating to her own income. It is unlikely that the plaintiff who took up the stand in exhibit A-4 dated December 22, 1959, that she was not in possession of any of the assets of her husband, that if she were to come into possession of such assets she would hold the same in trust and pay the income-tax arrears and that she not being in possession of any of the assets of her husband is not liable to pay the arrears of income-tax payable by her husband, suddenly made up her mind to pay the suit amount in pursuance of her demand, exhibit A-1. As already stated, except the address portion which refers to the legal heirs of H. D. Rajah, there is nothing else therein to indicate that the notice was served on the plaintiff in relation to the assessment of her husband, H. D. Rajah, for the year 1959-60. By way of contrast if we look at exhibit A-3, which has been issued two days later, it is seen that it specifically indicates as one relating to the assessment of H. D. Rajah for the year 1954-55. The subsequent conduct of the plaintiff also indicates that the payment of the suit amount made by her on December 23, 1959, could have been only under a mistake that the demand under exhibit A-1 related to her own assessment. Subsequent to the payment of the suit amount the plaintiff received exhibit A-6, a demand notice relating to her own assessment. She immediately informed the Income-tax Officer about the mistake committed by her with reference to exhibit A-1, by her letter, exhibit A-7. If the plaintiff had paid the suit amount voluntarily and without any such bona fide mistake as per the demand, exhibit A-1, there is no necessity or reason to suddenly change her attitude regarding her liability and call back the amount. The plaintiff's demand for repayment of the amount is only consistent with her stand that the payment has been made by mistake. We have to, therefore, hold that the plaintiff has established her case that the payment in question was made under a bona fide mistake that the demand, exhibit A-1, related to her own assessment.

9. As regards the plea of coercion put forward by the plaintiff, it is seen that P.W. 1 has only deposed that she not only paid the amount on the basis of a bona fide mistake but also with a view to avoid the levy of penalty which has been referred to in exhibit A-1. Therefore, the plea of coercion is mainly based on the contents of the demand notice exhibit A-1. The question, therefore, is whether the issue of the demand in the form prescribed which refers to the imposition of the statutory penalty in the event of the non-payment of the amount would amount to coercion. This question is somewhat important in this case inasmuch as the contentions advanced on either side regarding the maintainability of the suit and the plea of limitation would depend upon the decision on the plaintiff's plea of coercion.

10. According to the appellant's learned counsel, the mere issue of a notice in a statutory form without any actual threat of coercive process will not amount to coercion, and the payment made in pursuance of the notice would not be an amount collected under coercion and to establish the plea of coercion the plaintiff must positively establish that in fact coercive process was invoked before the collection was made. It is pointed out on behalf of the appellant that a clause in the notice that failure to pay will entail the levy of penalty cannot be taken to be a coercive process, that unless the payment is shown to have been enforced by force or threat, it should be taken to be a voluntary payment by the plaintiff and that the plaintiff herself has alleged merely a formal coercion taking advantage of the form of the notice and not to any actual enforcement of payment by force of threat.

11. The learned counsel for the appellant refers to the decision in Slater v. Burnley Corporation, [1888] 59 L.T. 636as supporting his stand. In that case water rent at certain rate was demanded and collected from the plaintiffs in respect of certain houses by the sanitary authority. After the payment the sanitary authority altered the basis of assessment from 'gross rental' to 'rateable value' and on this basis it was found that the owners have been overcharged.An owner brought an action to recover the overcharge as being money paid under compulsion. The defence to the action was that there was in fact no compulsion as there was no power to distrain in relation to the rates collected, that though the defendants had the power to cut off the water supply for non-payment of the rate, the supply of water has not been cut off, nor the authority had threatened to do so, nor any legal proceedings for the recovery, of the rent had been taken. The county court held the payment to be a compulsory one, as the defendants had the power to cut off the water even though they might not have threatened to do so for non-payment of the tax. But the appellate court held that the payment was a voluntary payment. Cave J., referring to the view of the county court, expressed :

'The learned judge held that the payment, on the ground that the corporation had the power to stop the water supply on non-payment of the rate and that seems to be the ground taken by the learned judge, as he says in his note, 'the corporation has power to stop water supply for nonpayment of the rent, and I hold that the payment was, therefore, not a voluntary payment.' There is no case which lays it down that a payment under these circumstances is a compulsory payment. If it were so, the consequence would be very far-reaching ; if that were so no payment of rent to a landlord would be a voluntary payment. It was also set up that the payment was a compulsory payment on other grounds.'

12. Wills J., the other learned judge said :

'In my opinion, the payment in this case was a voluntary payment. The respondent gave way and paid. It seems to me in these circumstances that it is idle to say that there is anything like duress--there was nothing in the nature of a threat used ; it is simply the ordinary case of a person raising a contention when a demand is made upon him. This is not sufficient to constitute duress, so as to prevent a payment being a voluntary one.'

13. The said decision in Chairman, Municipal Council, Rajahntundry v. Subba Rao A.I.R. 1937 Mad. 559 was also relied on. In that case the assessee paid the profession tax demanded from him by the municipality without any express protest accompanying the payment. The question was whether those payments were made voluntarily. A Division Bench of this court held that the fact that the payments were made in pursuance of the usual demand notice served on him which stated that In default of payment his property will be distrained, does not make the payment an involuntary payment and, therefore, no suit will lie to recover the payments. Mockett J., speaking for the Bench, referred with approval the following observations of Lord Reading C. J. in Maskell v. Horner, [1915] 3 K.B. 106 (C.A.):

'If a person pays money, which he is not bound to pay, under the compulsion of urgent and pressing necessity or of seizure, actual or threatened, of his goods he can recover it as money had and received.'

14. The Bench has pointed out in that case that to make the payment voluntary a compulsion should be of urgent and pressing necessity or of seizure, actual or threatened, that a mere conventional threat contained in the ordinary notices of demand will not do, for if that were so, no payment of rent to a landlord would be a voluntary payment and that the threat must be a real threat operating on the mind of the payer without which he would not have made the payment and that such a threat cannot be inferred from many of the formal documents which are sent to people demanding payment. In Rangaswami Pillai v. Srirangam Municipal Council : AIR1954Mad213 , Ramaswami J. had expressed :

'It is well-settled that the term 'coercion' in Section 72 of the Contract Act is used in its general and ordinary sense, its meaning not being controlled by the definition given in Section 15 of the Act. If it had been intended that the definition of the terms for the purpose of Section 72 should be found in Section 15, it might have been expected that the definition should find a place in Section 2, which is the interpretation clause, and Section 15 would not have contained the 12 words with which it concludes.'

15. According to the learned judge the essential elements of duress and coercion are :

(1) putting the person in such fear that he is bereft of the quality of mind essential to the making of a contract,

(2) that the contract was thereby obtained, and duress may be exercised by:

(a) personal violence or a threat thereof, or

(b) imprisonment or threat of imprisonment, or

(c) threats of physical injury, or of wrongful imprisonment or prosecution of a husband, wife, children or other near relative, or

(d) threats of wrongfully destroying, injuring, seizing, or withholding land or other things, or

(e) any wrongful acts, that compel a person to manifest apparent assent to a transaction, without his volition, or cause such fear as to preclude him from exercising free will and judgment in entering into a transaction.

16. The above cases show that to make the payment involuntary or one under coercion, it must, in fact, be so and that the mere fact that a statutory body conceiving itself justified under the circumstances in making a demand in the form prescribed, the demand containing the warning thatif it is not satisfied, legal process for realisation will be put into force, cannot take the payment in pursuance of such a notice out of the category of voluntary payments.

17. The learned counsel for the respondent, however, relies on the decision of Krishnan Pandalai J. in Municipal Council, Tuticorin v. Ralli Brothers [1934] 67 M.L.J. 566 wherein the learned judge has stated that the character of a payment is to be judged from the real nature and the circumstances in which it was made which are not to be assumed by the extension of any theoretical assumption of what the man paying might have thought, the question always being what he did think. On the facts of the case before him the learned judge held that the payment was involuntary without knowing the actual legal position. As already stated, in this case, except issuing the demand notice, exhibit A-1, in the statutory form which contains a provision that the failure to pay the amount demanded will entail penalty, there is no actual threat. The plaintiff has not been assessed for the first time and admittedly she is an income-tax assessee even before. Therefore, she could not have entertained in her mind an apprehension about the immediate danger of being subjected to penalty in the event of non-payment. We are, therefore, of the view that the plaintiff has not established her case that the payment of the suit amount was under coercion. As a matter of fact the plaint as originally filed merely proceeded on the basis that the payment has been made under a bona fide mistake, that it related to the plaintiff's own assessment and no plea of coercion was put forward. It is only by way of an amendment of the plaint the plea of coercion was brought in which is in a way inconsistent with the original plea of mistaken payment.

18. As regards the third question, it is now well established that anypayment made, whether voluntarily or otherwise, under a mistake eitherof law or of fact could be recovered once the mistake is established.Section 72 of the Contract Act enjoins a person to whom money has beenpaid or anything delivered by mistake or under coercion to repay orreturn it. Dealing with the scope of Section 72 of the Contract Act, theSupreme Court in Sales Tax Officer v. Kanhaiya Lal Makund Lal Saraf : [1959]1SCR1350 held that the said provision is wide enough to cover not only a mistake offact but also a mistake of law. The true principle enunciated therein isthat if one party under a mistake, whether of fact or law, pays to anotherparty money which is not due by contract or otherwise that money mustbe repaid, that once it is established that the payment, even though it beof a tax, has been made by the party labouring under a mistake of law,the party is entitled to recover the same and the party receiving the sameis bound to repay or return it and that no distinction can, therefore, bemade in respect of tax liability and any other liability on a plain reading of the terms of Section 72 even though such a distinction had been made in America. The court had observed :

'On a true interpretation of Section 72 of the Indian Contract Act the only two circumstances there indicated as entitling the party to recover the money back are that the moneys must have been paid by mistake or under coercion. If mistake either of law or of fact is established, he is entitled to recover the moneys and the party receiving the same is bound to repay or return them irrespective of any consideration whether the moneys had been paid voluntarily, subject however to questions of estoppel, waiver, limitation or the like. If once that circumstance is established the party is entitled to the relief claimed. If, on the other hand, neither mistake of law nor of fact is established, the party may rely upon the fact of the moneys having been paid under coercion in order to entitle him to the relief claimed and it is in that position that it becomes relevant to consider whether the payment has been a voluntary payment or a payment under coercion.'

19. The learned counsel for the appellant, however, contends that Section 72 of the Contract Act cannot apply to this case as the plaintiff has made the payment even, though under a mistake in discharge of her legal liability. The point is elaborated in this manner. Section 24B of the Indian Income-tax Act, 1922, imposes a legal liability on the legal representative in relation to the tax assessed and payable by the deceased person though that liability is limited to the estate of the deceased in his hands, that such a liability is absolute though limited, that the plaintiff's liability as a legal representative exists even though the extent of the liability is limited to the estate of the deceased in her hands and that any payment made by the plaintiff towards that legal liability cannot be recovered under Section 72. Reliance is placed on the following decisions in support of the said submission. In Shiba Prasad Singh v. Srish Chandra Nandi their Lordships of the Judicial Committee expressed while considering the scope of Section 72 of the Contract Act:

'Payment 'by mistake' in Section 72 must refer to a payment which was not legally due and which could not have been enforced : The 'mistake' is thinking that the money paid was due when in fact it was not due.'

20. In Twyford v. Manchester Corporation, [1946] Ch. 236, Romer J. has referred to the general rule that if money is paid voluntarily, without compulsion, extortion, or undue influence, without fraud by the person with full knowledge of all the facts, it cannot be recovered, although paid without consideration or in discharge of a claim which was not due or which have been successfully resisted. Relying on the view expressed in those decisionsthe learned counsel for the appellant urges that Section 72 cannot apply where there is a legal and subsisting liability on the date of payment. The question to be considered, therefore, is whether Section 24B of the Income-tax Act imposes an absolute legal liability on the legal representative of a. deceased person to pay the tax assessed on the deceased when he was alive. According to the learned counsel, Section 24B fastens a liability on the legal representative to pay the tax assessed on the deceased though the enforcement is limited to the assets of the deceased in the hands of the legal representative, and when a legal representative chooses to pay the tax assessed on the deceased without waiting for the realisation of the assets of the deceased, the payment cannot be said to be towards a non-existing liability so as to enable the legal representative to invoke the provisions of Section 72 of the Contract Act, and such payment cannot be recovered even when he finds, that he is not in a position to get any of the assets of the deceased. The decision of the Supreme Court in Additional Income-tax Officer v. E. Alfred : [1962]44ITR442(SC) is relied on. Dealing with the scheme of Section 24B, their Lordships of the Supreme Court have stated that it covers all situations and contingencies and makes the liability absolute, limited, however, to the extent to which the estate of the deceased is capable of meeting the charge. But we are not able to understand the said observations as holding that the liability of the legal representative to pay the tax assessed on the deceased is absolute without reference to the estate of the deceased in his hands. If the deceased has not left any asset, the liability of the legal representative has to be 'nil'. On the other hand if the deceased has left assets valued more than the amount of tax due by him, then the liability of the legal representatives will be to pay the tax in full. In our view, Section 24B itself is clear in this regard. It makes the legal representative liable to pay to the extent to which the estate is capable of meeting the tax assessed on the deceased. Therefore, the liability of the legal representative cannot be divorced from the estate of the deceased in his hands. What in effect the learned counsel contends is that the liability of the legal representative should be determined de hors the availability of the estate of the deceased in his hands, the non-existence of the estate of the deceased being material to determine the extent of the liability of the legal representative.

21. We are not inclined to interpret Section 24B in the manner suggested by the learned counsel. The decision in First Additional Income-tax Officer v. T.M.K. Abdul Kassim : [1962]46ITR149(SC) relied on by the appellant's learned counsel, does not deal with this aspect and is, therefore, of no assistance. There the legal representative of the deceased person against whom proceedings were taken under Section 24B was deemed to be an assessee not only forthe purpose of assessment but also for the purpose of levy and recovery of tax and proceedings under sections 45, 46(1) and 46(2) of the Act taken against him were upheld. This decision deals with the liability of the legal representative to be proceeded against and not the extent of his liability to pay. As has been held in O.R. Abdul Rahim v. II Income-tax Officer : [1966]59ITR273(Mad) the liability of the heirs of the deceased person is confined to the estate of the deceased in their hands and the revenue cannot resort to Section 46(2) and seek to recover the tax assessed on the legal representative under that section by proceeding against their personal properties. The learned counsel for the appellant does not in fact dispute the proposition that the personal properties of the legal representatives cannot be proceeded against for recovery of the tax due by the deceased by invoking Section 24B except in a case where it is found that the assets of the deceased have come into their hands and they have not properly accounted for the same. It is true that the legal representative will come under the definition of an assessee as defined in the Act. But the liability of the legal representative has only to be determined with reference to Section 24B. Therefore, in this case, we are not in a position to say that there was a legal liability on the plaintiff to pay the tax demanded under exhibit A-1 without reference to the assets of the deceased, if any, in her hands. The plaintiff has deposed that she was not possessed of any of the assets of the deceased on the date when the payment was made, that in fact there was no legal liability on her to pay the amount and that her liability to pay out of her own funds will arise only when she comes into possession of any of the assets of the deceased and is not able to account for the same. In this view, we have to hold that the plaintiff is entitled to invoke Section 72 of the Contract Act to seek recovery of the amount on the ground that she paid the amount though it is not legally due by her.

22. On the fourth question as to whether the suit is barred by limitation, the learned counsel for the appellant contends that if the suit is taken as one for refund of the money paid under a mistake, Article 96 has to apply to which event the suit will be clearly barred by time, for the plaintiff admittedly became aware of the mistake on January 28, 1960, and the suit was filed on June 29, 1963. This is also the view taken by the court below. Though the learned counsel for the respondent does not dispute the applicability of Article 96 of the Limitation Act in case the suit is treated as one for recovery of the amount paid under a mistake, he seeks to invoke the principle of Section 14 of the Limitation Act for excluding the time taken by the Income-tax Officer as well as before the Commissioner of Income-tax for disposing of her claim for refund of the tax. The learned counsel, however, concedes that Section 14 of the Limitation Act cannot interms apply to the facts of this case. But what he contends is that the principle of that section should be applied here. Reference is made to the decision in Mohammad Maqsood Ali v. Hoshiar Singh : AIR1945All377 where it was held that the operation of Section 14 should not be restricted, that its principle should be followed in suitable cases even in proceedings which cannot strictly be called as proceedings in a court of law, and that if the conduct of the person claiming its benefit has been bona fide in prosecuting with the diligence any civil proceedings, he is entitled to its benefits. In this case, the plaintiff sought a refund of the tax from the Income-tax Officer but the refund was declined. She filed a petition before the Commissioner which was also rejected. The time in these proceedings is sought to be excluded in computing the period of limitation by virtue of Section 14. Even if the principle of the said section were to be applied, the plaintiff must establish the requisite conditions for its application. Even if the claim for refund before the Income-tax Officer and the Commissioner were taken to be civil proceedings, they cannot be taken to be against the defendant. Further, the proceedings bad been validly entertained by the authorities and it cannot be said that they suffered from any defect of jurisdiction or other causes of a like nature and were, therefore, rejected for that reason. The court below has taken the view that Section 14 cannot be invoked in this case so as to enlarge the period of limitation under Article 96 and we are inclined to agree with that view for the reasons stated above.

23. If the suit were to be taken as one for recovery of the amount paid under coercion, the question may arise as to what is the proper article of the Limitation Act that is applicable. According to the plaintiff the residue Article 120 alone is applicable, while the defendant contends that Article 62 is the proper article to be applied. If Article 120 were to apply the suit can be filed within six years from the date of payment and if Article 62 were to apply, the suit should have been filed within 3 years from the date of payment. In this case the suit has been filed more than three years after the date of payment but before six years. Therefore, the controversy is as to which of the two articles is applicable to this case.

24. The learned counsel for the appellant could contend that the decision in A. Venkata Subbarao v. State of Andhra Pradesh : [1965]2SCR577 is conclusive on the point and that as per the said decision all suits for refund of tax illegally collected except those where the taxes have been paid under a mistake will be governed by Article 62. But according to the learned counsel for the respondent the decision in Tilokchand Motichand v. H.B. Munshi, [1970] 25 S.T.C. 289strikes a different note and holds that wherever relief is claimed on the ground ofcoercion, Article 120 has to be applied. We have already held that the payment in question cannot be said to have been made under coercion. But we shall assume for the sake of argument that the suit is one for refund of an amount paid under coercion, and consider the question whether even in such a case the suit is in time. In A. Venkata Subbarao v. State of Andhra Pradesh the majority decision laid down that the period of limitation for a suit for making a claim for recovery of tax illegally collected is governed by Article 62 of the Limitation Act of 1908, that it is not necessary in order to attract Article 62 that at the moment of the receipt the defendant should have actually intended to receive it for the use of the plaintiff, and that it is sufficient if the receipt was in such circumstances that the law would impute to him an obligation to retain it for the use of the plaintiff and refund to him when demanded. In that case all the earlier decisions of the various High Courts holding that the period of limitation for a suit for recovery of tax illegally collected is governed by Article 62 were considered and approved and the following exceptions to the said rule of limitation prescribed under Article 62 were set out:

'Where the defendant occupies a fiduciary relationship towards the plaintiff, it is clear that Article 62 is inapplicable. Next even if the claim could have been comprehended under the omnibus caption of the English 'action for money had and received', still if there are other more specific articles in the Limitation Act--vide, e.g., Article 96 (mistake), Article 97 (consideration which fails), Article 62 would be inapplicable. Lastly, if the right to refund does not arise immediately on receipt by the defendant but arises by reason of facts transpiring subsequently, Article 62 cannot apply, for it proceeds on the basis that the plaintiff has a cause for instituting the suit at the very moment of the receipt. '

25. Their Lordships specifically stated that a case of recovery of tax overpaid may come under Article 130, for in that case the right to get refund of the excess amount arises only after the completion of the assessment and in such a case the defendant cannot be said to have received the amount for the benefit of the plaintiff and the cause of action in 'such cases would arise only when the payment is found to be excess and not on the date of payment. Tilokchand Motichand v. H.B. Munshi, after reaffirming its earlier decision in A. Venkata Subbarao v. Stale of Andhra Pradesh, proceeded to consider the appellant's claim in that case that Article 120 of the Limitation Act giving a period of six years should be applied. This is how they proceeded :

'But taking the most favourable view of the petitioner's case Article 120 of the Limitation Act of 1908 giving a period of six years forthe filing of a suit would apply to the petitioner's claim, the period of six years would have expired some time in 1966. . . . '

26. Then the learned judges proceed to state that even if the petitioner is entitled to the benefit of Section 30(a) of the Limitation Act of 1963, the period of limitation for a suit which was formerly covered by Article 120 of the 1908 Act would in a case like this be covered by Article 113 of the new Act and the suit in that case would have to be filed by the 1st January, 1967, and that as the petition having been presented in February. 1968, his claim would be barred. It can, therefore, be seen that this decision does not run counter to the decision in A. Venkatasubba Rao v. State of Andhra Pradesh, and it merely considered the contention of the petitioner in that case that Article 120 of the Limitation Act should be applied to his case and held that even if that article were to apply the petitioner's claim was barred by limitation. It cannot, therefore, be construed as a decision holding that in all cases where relief is claimed on the ground of coercion Article 120 has to be applied. We, therefore, hold that the decision in A. Venkatasubba Rao v. State of Andhra. Pradesh concludes the case, and that the suit in this case even if it is treated as one based on coercion should have been filed within three years from the date of payment. We have held already that Section 14 of the Limitation Act cannot be invoked by the plaintiff for extending the period of limitation for filing the suit. We have to, therefore, hold that the suit is barred by limitation.

27. The learned counsel for the respondent would state that it is most unbecoming of the defendant, the Union of India, to plead limitation to avoid a just claim of the plaintiff. Whether the defendant is justified in taking the plea of limitation or not is not for us to decide. We are concerned only with the tenability of the plea of limitation. So long as there is a statutory bar of limitation and the defendant raises such a plea which is available to him under the law, the court cannot ignore or reject the plea on the ground that the defendant being a Government should not raise such a plea as against a citizen.

28. The last question that remains to be considered is whether the suit is barred by the provisions of the Income-tax Act. We are clearly of the view that the suit is not barred by the provisions of the said Act. It is submitted on behalf of the appellant that so long as the Act sets out the various remedies against the orders passed by the authorities constituted under that Act, it is not open to an aggrieved person to approach the civil court and that, even otherwise, Section 67 of the Income-tax Act specifically bars a suit of this kind. Section 67 is as follows:

'67. No suit shall be brought in any civil court to set aside or modify any assessment made under this Act, and no prosecution, suit or otherproceeding shall He against any officer of the Government for anything in good faith done or intended to be done under this Act.'

29. We are not able to see how this suit is one to set aside or modify any assessment made under the Income-tax Act. This is a simple suit for recovery of money said to have been paid under a mistake or under coercion. The plaintiff does not seek to set aside or modify any assessment made under the Act against her husband. What she states is that she is not liable to satisfy the demand under exhibit A-1 payment of tax due by her husband from out of her personal funds and, therefore, the collection made from her should be refunded. In Inderchand v. Secretary of Stale for India : [1941]9ITR673(Patna) an assessee claimed certain amount as refund due to him from the income-tax department by filing a suit when his claim was denied by the income-tax department. The suit was contested by the income-tax department contending, inter alia, that the civil court has no jurisdiction to entertain the suit. It was held in that case that since the assessee did not seek to set aside or modify any assessment within the meaning, of Section 67 of the Act and the only question to be decided being whether the plaintiff is entitled to the refund, the suit was not barred under Section 67. No particular provision of the statute was referred before us as affording any relief to the petitioner to get back the amount paid by her. It is true, if a statute imposes a liability and creates an effective machinery for deciding questions of law or facts arising in regard to that liability, it may by necessary implication bar a civil suit in respect of the said liability. But we are not concerned here with the statute imposing any liability and the liability being challenged., In this suit the plaintiff claims that an amount has been collected from her as due by her while in fact no such liability existed. We do not see any provision in the Income-tax Act which confers exclusive jurisdiction on any of the statutory authorities to decide finally the questions arising in this suit as to whether the plaintiff is entitled to a return of the amount collected from her. We are, therefore, of the view that the suit is not barred under the provisions of the Income-tax Act.

30. In view of our finding on the question of limitation, the appeal is allowed with costs, and the suit dismissed. There will, however, be no order as to costs in the suit.

31. However, it is made clear that the sum of Rs. 15,370.96 having been collected from the plaintiff personally without reference to the assets of the deceased in her hands and as all the assets of the deceased are alleged to have been attached and even though brought to sale by the defendant for the arrears of income-tax due by the deceased for the earlier years, the defendant has to pay back the said sum to the plaintiff in the event of anyamount being realised by the sale of the assets of the deceased, as otherwise it will amount to a double payment in respect of the same liability, one payment from and out of the assets of the deceased and another by the wife of the deceased out of her own funds.


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