D.N. Sinha, J.
1. In this case the short facts are as follows : The petitioner company is a company in-corporated under the Indian Companies Act and has its registered office in Calcutta, The Wealth Tax Act 1957 (Act No. 27 of 1957) came into effect on the 1st of April, 1957. On or about the 12th of December, 1957 the Wealth Tax Officer, Companies District I, Calcutta, issued a notice under Section 14(2) of the said Act calling upon the petitioner to submit a true and correct statement of the petitioner's assets and liabilities as on 31st March, 1957, being the relevant valuation date for the purpose of the Wealth Tax Act. The petitioner submitted its return. On the 31st March, 1957 the assessment order was made by the Wealth Tax Officer, Companies District 1, Calcutta. A copy of the assessment order is annexed to the petition and marked 'B'. On the 7th of March, 1958 the Wealth Tax Officer issued a notice of demand under Section 30 of the Wealth Tax Act, a copy whereof is annexure 'C' to the petition. Notice was given that for the assessment year 1957-58, a sum of Rs. 1,51,790-92 N. P. had been assessed as Wealth Tax and the amount was payable on or before the 18th March. It was notified that if the petitioner intended to appeal against the assessment, he should present the appeal under Sub-section (1) of Section 23 to the Appellate Assistant Commissioner, Wealth Tax. Underneath the notice of demand was a note as follows :--
'Please note that I will not be prepared to postpone collection of taxes under any circumstance.'
Eventually the petitioner filed an appeal on or about the 21st March, 1958 before the Appellate Assistant Commissioner. An application was made to the Commissioner of Wealth Tax on or about the 13th of March, 1958 praying for a direction on the Wealth Tax Officer not to treat the petitioner in default till the disposal of the appeal. The Commissioner rejected the application on the 18th of March 1958. The order is Ex. 1 to the petition and gives no reason whatever for the refusal. On the 21st of March, 1958 an application was made before the Wealth Tax Officer stating that the petitioner had filed an appeal under Section 23 of the said Act and requested him not to treat the petitioner as in default. By his letter dated the 24th of March, 1958 the Wealth Tax Officer refused or rejected this prayer and called upon the petitioner to pay the assessed amount on or before the 27th of March, 1958, in default of which recovery proceedings would be instituted. It is against this order that the petitioner has come up to this Court. Under the said Act, an appeal is preferred under Section 23. After preferring an appeal, an application has to be made to the Wealth Tax Officer for stay. The particular provision under which the application is made is Section 31(3), which states that notwithstanding anything contained in Section 31, where an assessee has presented an appeal under Section 23, the Wealth Tax Officer may in his discretion treat the assessee as not being in default as long as such appeal was undisposed of. Therefore, the application before the Commissioner was not in order; the proper application that is contemplated under the Act is to the Wealth Tax Officer and such application was made and has been rejected. There is no doubt that the power to stay or not, granted under Section 31(3) is a matter of discretion. In a Divisional Bench judgment of this Court Kashiram Agarwalla v. Collector of 24 Parganas, : AIR1958Cal524 (A), Das Gupta J. states as follows :--
'Whether or not an assessee would be considered to be in default after an appeal is filed against the assessment is a matter entirely in the discretion of the Income Tax Officer, who has, however, to exercise his discretion after due regard to the circumstances of the case. If in a particular case, the question on of exercise of discretion has not been considered properly by the Income Tax Officer that might be good ground for issuing a Writ directing him to treat the assessee to be not in default'
2. The learned Judge inter alia said that ordinarily he should have thought it proper that the Collector should stay his hands till the appeals are disposed of, specially when the amounts are large. On the other hand, the learned Judge says that there might be extraordinary circumstances in which it will be right not to stay his hands even though the appeals might be pending. In that case reference was made to the case of Ladhuram Taparia v. B. K. Bagchi, 1951-20 I. T. R. 51 (Cal) (B). In that case, the matter went to the Appeal Court and Harries, C. J. said as follows :
'Once an appeal was filed, however, it would be for the Income-Tax Officer then to consider whether in the particular circumstances it would be just and proper to treat them as defaulters. If, for example, the questions involved in the appeal were difficult and the prospects of success in the appeal were bright, it would be a very bold Income Tax Officer who could hold that the asscssees were still defaulters. The matter however, is in his discretion having regard to the circumstances of the case.'
3. In my opinion, the law has been rightly laid down by Das Gupta, J., and there can be no doubt that the matter is one of discretion to be exercised judicially. A judicial exercise of discretion involves a consideration of the facts and circumstances of the case in all its aspects. The difficulties involved in the issues raised in the case and the prospects of the appeal being successful is one such aspect. The position and economic circumstances of the assessee is another. If the officer feels that the stay would put the realisation of the amount in jeopardy that would be a cogent factor to be taken into consideration. The amount involved is also a relevant factor. If it is a heavy amount, it should be presumed that immediate payment, pending an appeal in which there may be a reasonable chance of success, would constitute a hardship. The Wealth Tax Act has just come into operation. If any point is involved which requires an authoritative decision, that is to say, a precedent, that is a point in favour of granting a stay. Quick realisation of tax may be an administrative expediency, but by itself it constitutes no ground for refusing a stay. While determining such an application, the authority exercising discretion should not act in the role of a mere tax-gatherer. The question is whether I am satisfied that in this case all such factors have been taken into consideration in arriving at the conclusion, culminating in the order rejecting the application for stay. I am unable to get over the fact that right from the time of the notice of demand, intimation was given that stay will not be allowed under any circumstances. An explanation has been sought to be given in the affidavit in opposition, but it is far from satisfactory. The explanation does not establish that the Officer applied his mind judicially to the question or that he considered all the possible aspects of the matter that are relevant, before making his order. It seems to me that from the very beginning he had a closed mind. In such matters, I think the proper order to make would be to quash the order of rejection and sent it back to the officer, or whoever is acting in his stead, to consider the matter from the point of view that I have enumerated above, and to exercise his discretion in a judicial manner. All I am concerned with is to see that he does so, and I am not concerned with the merits of the case. The order, therefore, will be that the Rule is made absolute in part and the order of the Wealth Tax Officer contained in letter dated 24th of March 1958, which is annexure 'H' to the petition, rejecting the application of the petitioner not to treat him as a defaulter, is quashed and/or set aside and a Writ of Certiorari issued therefor. The matter will now go back, to be dealt with by the Wealth Tax Officer dealing with the matter, to consider the application of the petitioner under Section 31(3) of the Act, and deal with it in accordance with law.
4. There will be no order as to costs.
5. By agreement of the parties, a notice of the hearing will be given within a week and the order will be made within 3 weeks and there will be a stay of further proceedings for 3 weeks.