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The Secretary, Board of Revenue (income-tax) Vs. the Madras Export Co. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1923Mad422; 76Ind.Cas.375
AppellantThe Secretary, Board of Revenue (income-tax)
RespondentThe Madras Export Co.
Cases ReferredIndia v. Chelikani Rama Rao
Excerpt:
.....as those of arbitrators. this has been the consistent view of this court and it has been endorsed by the privy council in secretary of stale for india v. as i have said, there is no question but that this case satisfied those conditions and i, therefore, am of opinion that leave to appeal must be.....orderwalter schwabe, c.j.1. this is an application for leave to appeal to the privy council from a decision of this court on a reference to it under section 51 of the income-tax act vii of 1918. the question involved in this reference is a difficult and important point of law of very great and general importance. i am, therefore, prepared to certify that, although the actual amount involved in this reference is only about rs. 6,000, the case is a fit one for appeal to his majesty in council, provided that we have the power to certify, that is, provided that appeal lies. this depends on whether our decision in this case is a 'final judgment' of the high court either in its ordinary original civil jurisdiction or extraordinary original civil juris- diction; or in its appellate jurisdiction,.....
Judgment:
ORDER

Walter Schwabe, C.J.

1. This is an application for leave to appeal to the Privy Council from a decision of this Court on a reference to it under Section 51 of the Income-Tax Act VII of 1918. The question involved in this reference is a difficult and important point of law of very great and general importance. I am, therefore, prepared to certify that, although the actual amount involved in this reference is only about Rs. 6,000, the case is a fit one for appeal to His Majesty in Council, provided that we have the power to certify, that is, provided that appeal lies. This depends on whether our decision in this case is a 'final judgment' of the High Court either in its ordinary original civil jurisdiction or extraordinary original civil juris- diction; or in its appellate jurisdiction, because under Clause 39 of the Letters Patent it is only on these matters that an appeal lies. I agree that there is no inherent right of appeal and that unless such right is conferred by the Letters Patent or by Statute there can be none. I have no doubt that our decision is a 'judgment' and also that it is 'final'. The power of determining income-tax question is conferred by the Income-Tax Act VII of 1918. By Section 57 the Chief Revenue Authority may, and in certain circumstances on the application of the assessee himself must, draw up a statement of the case and refer it with his own opinion to the High Court and the High Court has to decide the question raised arid deliver judgment, and that judgment is to be acted upon. Apart from this provision, the High Court by reason of Section 106 of the Government of India Act has no power to deal with revenue matters. The section confers this jurisdiction on the Court and, in my view, these Income-Tax cases are referred to the Court as a 'Court' and it must follow that the ordinary rights of appeal from that Court are available. This principle is clearly enunciated in National Telephone Co. v. Postmaster-General (1913) A.C. 546 : 82 L.J.K.B. 1197 : 109 L.T. 562 : 57 S.J. 661 : 29 T.L.R. 637. The Government in that case had taken over the assets of the National Telephone Co. and by the Telegraph (Arbitration) Act, 1909, (Edw. VII, C. 20) Section 1, it was provided that any difference as to price and other matters, if the parties agreed, be referred to the Railway and Canal Commission and that that Commission should determine the same. The Railway Canal Commission is a statutory body and there are certain rights of appeal from its decision. The matters in dispute between the National Telephone Co., and the Government were by agreement referred to that Commission and a decision was given. Upon appeal it was argued that no appeal lay, no right to appeal having been conferred by the Statute; but it was held that jurisdiction having been conferred on that tribunal, it followed that the usual rights of appeal from that tribunal were also conferred. The point was shortly stated by Lord Parker at page 562: 'Where by Statute matters are referred to the determination of a Court of Record with no further provision, the necessary implication is, I think, that the Court will determine the matters as a Court. Its jurisdiction is enlarged, but all the incidents of such jurisdiction, including the right of appeal from its decision, remain the same.' The same principle has been applied here in cases under the Madras Forest Act, V of 1882, which gives a right of appeal from a Forest Officer to the District Judge without providing for any appeal from the District Judge to the High Court. It was held by the Privy Council that when the District Court was reached, that Court is appealed to as one of the ordinary Courts of the country, with regard to whose procedure, orders and decrees, the rules of the Civil Procedure Code are applicable and that, therefore, an appeal lay to the High Court: Secretary of State for India v. Chelikani Rama Rao 35 Ind. Cas. 902 : 39 Ma. 617 : 1916 31 M.L.J. 324 : 20 C.W.N. 1311 : (1916) 2 M.W.N. 224 : 14 A.L.J. 1114 : 20 M.L.T. 435 : 4 L.W. 486 : 1916 18 Bom. L.R. 1007 : 25 Cri.L.J. 69 : 43 I.A. 192.

2. It was argued that the decision of the Privy Council in Rangoon Botaloung Co., Limited v. Collector of Rangoon : (1912)14BOMLR833 was against this view. Under the Land Acquisition Act, I of 1894, when lands are taken over for public purposes, the Collector is appointed arbitrator as between the Government and the parties. Under Section 18 he may be required to refer the matter for the determination of the Court, the Court for this purpose being a principal Civil Court of original jurisdiction. By Section 54 an appeal is given from what is termed an award of that Court to the High Court. Two Judges of the Chief Court of Burma sat to hear the reference and it was held by the Privy Council that no appeal lay from their decision applying the principle stated by Bramwell, L.J., in Sandback Charity Trustees v. North Stafford shire Railway Company (1878) 3 Q.B.D. 1 : 47 L.J.Q.B. 10 : 37 L.T. 391 : 26 W.R. 229. An appeal does not exist in the nature of things. A right to appeal from any decision of a tribunal must be given by express enactment. So far as the actual decision is concerned, I think that the fact that the two Judges sat as arbitrators, and not as a Court in the ordinary sense is established by the words of the Act itself, which call their decision an award and not a judgment. It was, however, suggested that these Judges were sitting not only on the reference to them by the Collector but also as an appellate, tribunal under Section 54. It is difficult to understand how this could be so, because it seems impossible that the two Judges could be hearing a case as arbitrators and at the same time be hearing an appeal from their own decision which had not. yet been given. Lord Shaw in Secretary of State for India v. Chelikani Rama Rao 35 Ind. Cas. 902 : 39 M. 617 : 1916 31 M.L.J. 324 : 20 C.W.N. 1311 : (1916) 2 M.W.N. 224 : 14 A.L.J. 1114 : 20 M.L.T. 435 : 4 L.W. 486 : 1916 18 Bom. L.R. 1007 : 25 C.riL.J. 69 : 43 I.A. 192 (P.C.) explains this judgment by saying that the proceedings were from beginning to end ostensibly and actually arbitration proceedings, and in Ramachandra Rao v. Ramachandra Rao : (1922)24BOMLR963 their lordships of the Privy Council explain the decision in Rangoon Botatoung Co., Limited v. Collector of Rangoon : (1912)14BOMLR833 in the same way--see page 329. Page of 45 M.--[Ed.] I think, it is clear on these authorities that the principles enunciated in the National Telephone Co., case are considered, as being of general application in this country and are in no way affected by the decision in Rangoon Botatoung Co., Limited v. Collector of Rangoon : (1912)14BOMLR833 . This Court does not sit in my other capacity than in the exercise of its ordinary and extraordinary, original civil jurisdiction and its appellate jurisdiction. See Chappan v. Moidin Kutti 22 M. 68 : 8 M.L.J. 231 : 8 Ind. Dec. 49 and Navivaku v. Turner 16 I.A. 156 : 13 B. 520 : 5 Sar. P.C.J. 400 : 13 Ind. Jur. 251 : 7 Ind. Dec. 345 It does not sit in a further capacity, namely, to try matters referred to it by Statute. It would he possible for the Legislature to empower the Judges to sit as arbitrators and without appeal, but it would require plain language to impose such duties and there is nothing in the Income Tax Act to indicate any such intention. Whether in this case we are sitting in our original jurisdiction, or in our appellate jurisdiction as was held in Birendra Kishore Manikya v. Secretary of State for India in Council 61 Ind. Cas. 112 : 48 C. 766 : 32 Cri.L.J. 433 : 25 C.W.N. 80, is immaterial, for in either case there is a right of appeal or power to give leave to appeal to the Privy Council. There is direct authority on the point in Tata Iron & Steel Co. v. Chief Revenue Authorial, Bombay 64 Ind. Cas. 931 : 33 Bom. L.R. 1102, with which, for the reasons stated above, I agree.

3. Accordingly, a certificate for leave to appeal to His Majesty in Council will he granted. Costs of this application costs in the cause.

Coutts Trotter, J.

4. This was a case referred to the High Court by the Chief Revenue Authority under the powers conferred upon it to that end, by Section 51(1)(9) of the Income Tax Act, VII of 1918. The Revenue Authority being dissatisfied with the determination of the High Court is desirous of obtaining leave to appeal to the Privy Council.

5. With the merits of the question we are not concerned. The only point we have to determine is that raised by way of preliminary objection by the assessee, viz., that we have no power to grant leave to appeal, in any event. There can be no question as to the fulfilment of the conditions requisite for an appeal being allowed, for though the value is only Rs. 6,000, the legal importance of questions raised by the reference is obviously great. But Mr. Grant has argued that the provisions of the Code of Civil Procedure do not apply, that there is a special machinery provided by the Income Tax Act beyond which you must not look and that unless there is an express provision in the Act for an appeal to the Privy Council, there is no jurisdiction in this Court to grant leave. The chief authority which he cites for that position is Rangoon Botatoung Co., Limited v. Collector of Rangoon : (1912)14BOMLR833 , a decision of the Privy Council on appeal from the Chief Court of Lower Burma, under the Land Acquisition Act, I of 1894; and it was there held that, as the Land Acquisition Act conferred no express right of appeal, none existed, following the observation of Lord Bramwell in Sandback Charity Trustees v. North Staffordshire Railway Company (1878) 3 Q.B.D. 1 : 47 L.J.Q.B. 10 : 37 L.T. 391 : 26 W.R. 229. 'An appeal does not exist in the nature of things. A right to appeal from any decision of any tribunal must be given by an express enactment.' In that case an award of a Collector as to valuation was referred to the Chief Court of Lower Burma under the provisions of the Act; and it was quite possible to take the view that, in effect, the Judges forming the Court were to be regarded as arbitrators making an award, from which award no appeal would lie unless expressly conferred. But at page 26 Page of 40 C.--[Ed.] of the report Lord Macnaghten, who delivered the judgment of the Board, makes the following observation: 'They (i.e., the representatives of the Chief Court) sat as 'the Court' and also as the High Court'. This would seem to indicate that, in the opinion of the Board, the Chief Court of Lower Burma was in that case invested with the functions of a Court of law, as well as those of arbitrators. I do not profess to understand how any Court can he supposed to be combining, at One and the same sitting, the functions of arbitrators with those of an appellate tribunal apparently a tribunal sitting in appeal from itself in its other contemporaneous exercise of its functions as arbitrators. But I think, it is not going too far to say that that decision has been treated as being based on the view that the Land Acquisition Act made the Chief Court arbitrators and no more. That view appears to have been adopted by Lord Macnaghten himself in Special Officer, Salsette Building Sites v. Dasabhai Bezanji 20 Ind. Cas. 763 : 17 C.W.N. 421. See also the observations of Lord Shaw in Secretary of State for India v. Chelikani Rama Rao 35 Ind. Cas. 902 : 39 M. 617 : 1916 31 M.L.J. 324 : 20 C.W.N. 1311 : (1916) 2 M.W.N. 224 : 14 A.L.J. 1114 : 20 M.L.T. 435 : 4 L.W. 486 : 1916 18 Bom. L.R. 1007 : 25 Cri.L.J. 69 : 43 I.A. 192.

6. Mr. Grant's argument is as follows: By Section 106 of the Government of India Act, the ordinary Courts of this country are debarred from inquiring into matters concerning the revenue. The Income Tax Act of 1918 gives power to the Board of Revenue and in a sense creates a right in the assessee to refer a formal special case for the opinion of the High Court. His contention is, that the Act of 1918 is exhaustive as to this subject, and that when the High Court has given its opinion, the matter is ended, as the Statute makes no provision for a further appeal to the Privy Council. If the matter were res integra, the inclination of my mind would be in accordance with this argument, but I think, I am precluded by authorities of great weight from acceding to it. The principle that I conceive to be established by those authorities is this, that where yon find the jurisdiction of a Court extended by a Statute to matters which would not ordinarily come within its purview, that extension of jurisdiction makes the new matters subject to all the machinery provided by law, for the regulating of its ordinary jurisdiction as a Court of Record--the machinery in this instance being the Civil Procedure Code. That seems to me to be emphatically laid down by the House of Lords in National Telephone Co. v Postmaster-General (1913) A.C. 546 : 82 L.J.K.B. 1197 : 109 L.T. 562 : 57 S.J. 661 : 29 T.L.R. 637. There, by a Special Statute, it was enacted that on the taking over of the Company by Government, all matters in dispute should be determined by the Railway and Canal Commission. The decision of the House of Lords was to the effect that the referring of the matter to the arbitrament of the Railway and Canal Commission brought into operation all the machinery of appeal provided by the Railway and Canal Traffic Act, 1888, and allowed an appeal from it, notwithstanding the absence of any express provision in the Special Act. I think, that the position had been previously established for India in Navivahu v. Turner 16 I.A. 156 : 13 B. 520 : 5 Sar. P.C.J. 400 : 13 Ind. Jur. 251 : 7 Ind. Dec. 345 (P.C.), by the Judicial Committee. This has been the consistent view of this Court and it has been endorsed by the Privy Council in Secretary of Stale for India v. Chelikani Rama Rao 35 Ind. Cas. 902 : 39 M. 617 : 1916 31 M.L.J. 324 : 20 C.W.N. 1311 : (1916) 2 M.W.N. 224 : 14 A.L.J. 1114 : 20 M.L.T. 435 : 4 L.W. 486 : 1916 18 Bom. L.R. 1007 : 25 Cri.L.J. 69 : 43 I.A. 192. I am, therefore, constrained to hold that, when once the High Court his its jurisdiction extended by a Special Act, the case which is thus put under its jurisdiction becomes subject to the provisions of the Code of Civil Procedure, with all its incidents including the duty to grant leave to appeal to the Privy Council in cases which satisfy the conditions of the Code. As I have said, there is no question but that this case satisfied those conditions and I, therefore, am of opinion that leave to appeal must be granted.


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