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S.K. Dutt, Income-tax Officer and anr. Vs. Anglo-India Jute Mills Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 151 of 1956
Judge
Reported inAIR1957Cal514,[1958]33ITR866(Cal)
ActsIncome Tax Act, 1922 - Sections 4A, 18, 18(3A), 18(3B), 18(7), 30, 30(1A), 42 and 43; ;Constitution of India - Article 226; ;Code of Civil Procedure (CPC) , 1908
AppellantS.K. Dutt, Income-tax Officer and anr.
RespondentAnglo-India Jute Mills Co. Ltd.
DispositionAppeal dismissed
Cases ReferredWalsall Overseers v. London and North Western Ry. Co.
Excerpt:
- chakravartti, c.j.1. the principal point involved in this appeal has been called by the learned trial judge a point of first impression. it is undoubtedly a point which has never arisen before and that was perhaps because no one ever thought of raising a point of this character.2. the facts are as follows. the respondent, anglo-india jute mills co., limited, is a company incorporated under the indian companies act and carries on business in india. in 1947, the company purchased the entire share capital in landale & clarice limited and the second largest lot was purchased from clive investment trust co., ltd., a sterling company registered in the united kingdom, the transaction concerned 1,900 preference shares, purchased at the rate of rs. 135 per share and 2,450 ordinary shares,.....
Judgment:

Chakravartti, C.J.

1. The principal point involved in this appeal has been called by the learned trial Judge a point of first impression. It is undoubtedly a point which has never arisen before and that was perhaps because no one ever thought of raising a point of this character.

2. The facts are as follows. The respondent, Anglo-India Jute Mills Co., Limited, is a company incorporated under the Indian Companies Act and carries on business in India. In 1947, the company purchased the entire share capital in Landale & Clarice Limited and the second largest lot was purchased from Clive Investment Trust Co., Ltd., a Sterling Company registered in the United Kingdom, The transaction concerned 1,900 Preference Shares, purchased at the rate of Rs. 135 per share and 2,450 Ordinary Shares, purchased at the rate of Rs. 332-8-0 per share. The total price paid by the respondent company to its vendors for that lot of shares was Rs. 10,71,125. Out of that sum, the respondent company retained in its hands an amount of Rs. 1,48,812-8-0. It is said that parties to the transaction thought that the profit made by the vendovs out of this deal might attract the Capital Gains Tax and since it was not unlikely that the respondent company would be treated as an agent of the vendors, it was considered expedient to retain an amount which would be sufficient to cover the tax liability. Apparently, till 1954, the amount continued to lie in the hands of the respondent company, no one making any demand for its payment or any payment out of it.

3. In the meantime, on 9-3-1953, the Income-tax Officer, Companies District II, Calcutta, had completed the assessment of the Clive Investment Trust Company Limited for the assessment year 1948-49. That assessment had been made on the basis that the Clive Investment Trust Company Limited was resident and ordinarily resident in India and the total amount of tax payable under it had been determined at Rs. 3,72,372. As the asiessee company had gone into liquidation and apparently had 110 assets in India directly held by it, the Department was thrown on indirect modes of recovery. It must have known that the respondent company had had dealings with the Clive Investment Trust Company Limited and obviously thought that there might be some money owing from the respondent company to the Clive Investment Trust Company Limited. Accordingly, on 10-3-1954, the Income-tax Officer, Companies District II, Calcutta, issued a notice to the respondent company under Section 46 (5-A), Income-tax Act, and by that notice required the respondent company to pay him forthwith any amount due from it or held by it for or on account of the Clive Investment Trust Company Limited.

4. The respondent company replied to the notice by a letter, dated 17-3-1954. It said that it had lying in its hands a sum of Rs. 1,48,812-8-0 which had been left in deposit by the Clive Investment Trust Company Limited and that the amount would be paid over together with interest, as soon as a Chalan was received. On the 20th of March following, the Income-tax Officer sent two Challam to the respondent company, one for a sum of Rs. 1,48,812-8-0 which was the amount known to him to be in ita hands and another left blank which was intended for the payment of such amount of interest as might be due. On the 27th of March following, the respondent company paid through its Managing Agents the whole of the aforesaid sum of Rs. 1,48,812-8-0 and a further sum of Rs. 1,822-7-0 on account of interest.

5. It will be seen that up to that point of time, the Income-tax Officer was trying to realise the tax due from the Clive Investment Trust Company Limited under the assessment made of that company for the assessment year 1948-49. Now, however, he began to think on other lines. By a letter, dated 11-5-1954, he asked the respondent company to let hint know the price for which it had purchased the shares of Landale & Clarke Ltd., and also whether it had deducted income-tax at the maximum rate and supertax at the rate applicable on the profit made by the Clive Investment Trust Company Limited out of thetransaction. The respondent company replied to the letter on 15-5-1954. It gave the Income-tax Officer the particulars of the transaction which he had wanted and informed him that it had only retained a sum of Rs. 1,48,812-8-0 in order to meet the vendor's liability for Capital Gains Tax, if such liability came to be imposed. The Income-tax Oflicer was not satisfied with this reply. He addressed the respondent company next on 15-3-1955 and told the company that the tax recoverable on the transaction under Section 18 (3-A) of the Act was Rs. 2,27,540-15-0 in respect of which it had deducted from the price paid to its vendors only a sum of Rs. 1,48,812-8-0. The company was, therefore, liable to pay the balance of Rs. 78,720-7-0 which it was asked to pay by the 27th of March next. The Income-tax Officer purported to make this demand under Section 18 (7), Income-tax Act, which meant that he was treating the respondent company as in default in respect of the tax.

6. Then commenced the correspondence out of which the principal point to be decided in this ap-peal has arisen. By a letter dated 22-3-1955, the respondent company returned the Challan which the Income-tax Officer had sent along with his letter ot 15-3-1955. It repudiated its liability to pay an amount of Rs. 78,728-7-0 or any other sum on ac-count of income-tax and super-tax payable by the Clive Investment Trust Company Limited and pointed out that at the time when the transaction in question had taken place, the vendor company had been resident and ordinarily resident of India for income-tax purposes. There could thus be no question of making any deduction under Section 18 (3-A) from the price paid to the vendor company and the deduction actually made was intended only to cover the respondent company against any liability which might arise in the event of its being appointed agent of the vendor company in connection with the capital transaction.

7. I might pause here to point out that what was S, 18 (3-A) at the time of the transaction had come to bo Section 18 (3-B) at the time when this correspondence was taking place. One, therefore, finds in subsequent letters references to Section 18 (3-B) rather than to Section 18 (3-A). It would, however, have been more accurate if references to the old section had been adhered to, because the liability of the respondent company, if any, fell to be decided by the law as it was in force at the time of the transaction and because Section 18 had since been extensively amended. So far as Section 18 (3-A), now 18 (3-B), is concerned, the amendment has not been very material and, therefore, in spite of the inaccuracy of a reference to the new section, no confusion was in fact created.

8. To return to the narrative, the Income-tax Officer replied to the respondent company's letter on 25-3-1955. He did not deny that at the time of the transaction in question, the Clive Investment Trust Company Limited had been resident and ordinarily resident in India for income-tax purposes, but put forward the view that what Section 18(3-A) contemplated was not the notional residence of the payee under the definition, as contained in the Income-tax Act, but his or its physical residence which, in the case of a company, would be determined by the location of its registered office. On that view, it was added that the Clive Investment Trust Company Limited being a Sterling Company, had to be treated as a non-resident company for the purposes of Section 18 (3-A) and, therefore, the deduction required to be made by that section ought to have been made, Somewhat incorrectly, the Income-tax Officer proceeded to say that if the respondent company felt any doubt as to its liability, it might have obtained guidance from the Income-tax Oflicer by an application made to him under Section 18 (3-C) of the Act. After that letter of the Income-tax Officer, there appears to have been a personal interview between him and a representative of the Managing Agents of the respondent company at which the company's point of view was again pressed on the Income-tax Officer. There was next a letter, dated 4-4-1955, from the respondent company to the Income-tax Officer which in a way confirmed what had taken place at the interview. It was said that the respondent company had acted under the advice of Messrs. Lovelock & Lewes who had told them that the Ciive Investment Trust Company Limited was assessable as a resident for the year in question and, in view of. that information, the respondent company had not made any deduction under Section 18(3-A) which, it thought, would clearly be not applicable. The only amount which the respondent company had.been advised to retain was an amount that might bo required to meet the vendor's liability for Capital Gains Tax and that amount had been duly retained. The letter concluded by pointing out that the Income-tax Officers reference to Section 18(3-C) was clearly irrelevant, inas-much as that section had been introduced only by the Amendment Act of 1955, and by asking him to defer collection of the tax as the liability was still disputed.

9. Although the respondent company was repudiating its responsibility for making any deduction under Section 18(3-A) of the Act, it was apparently not feeling altogether easy about the matter. On 5-4-1955, it addressed another letter to the Income-tax Officer by which it wanted to be informed of the name of the party in India who had filed the returns and appeals on behalf of the vendor company and also of the name of the person, firm or bank who might be deemed to bo an agent of that company or its liquidator under Section 43 of the Act This information, it was said, was required, because it appeared that the company must have had at one time substantial funds available in India out of which the outstanding liabilities for taxation could be met and that the respondent company wanted to make the necessary enquiries, inasmuch as it had unfortunate-ly become involved in the taxation affairs of its vendors. The Income-tax Officer's reply to that letter is the last letter in the correspondence exhibited in the case. He wrote on 18-4-1955 and quite naturally informed the respondent company that the particulars required about the income-tax affairs ot another assessee could not possibly be supplied. Ha reiterated his point of view that the assessment ot the Clive Investment Trust Company Limited as re-sident and ordinarily resident for the year in question was altogether beside the point, inasmuch as Section 18(3-A) was concerned only with physical residence and not notional residence, as prescribed for the purposes of income-tax assessment

10. Four days later, the respondent companymoved this Court under Article 226 of the Constitution and obtained a Rule on the Income-tax Officer as well as the Union of India. The Rule required the respondents to the petition to show cause why an order in the nature of a writ of certiorari should not be made, commanding the Income-tax Officei to certify and produce before this Court the records relating to the proceedings in the petition in order that conscionable justice might be administered by quashing the order and/or notice of demand and why an order of prohibition should not be made on the Income-tax Officer, commanding him not to usurp a jurisdiction not vested in him and also why an order in the nature of a writ of mandamus should not be made, restraining the Income-tax Officei from taking any further steps on the basis of his notice of demand.

11. The Rule came up to be heard on 11-5-1956, when it was made absolute. Sinha J., directed the issue of a writ in the nature of certiorari, quashing and setting aside the notice under Section 46(5-A) of the Income-tax Act issued by the respondents on 10-3-1954 and the notice dated 15-3-1955, Exhibits A and E to the petition, ,and also a writ of mandamus and prohibition, prohibiting the respondents to the petition from giving further effect to the said notices and/or orders and or realising the sums mentioned therein or any part thereof from the respondent company. It is against that order that the present appeal has been preferred by the Income-tax Officer and the Union of India.

12. Before dealing with the points canvassed before us, I might point out that some of the prayers made in the petition were not accurately framed, not docs the order made by the learned Judge seem to me to be fully and correctly adopted to the facts and orders it was dealing with. Since this question was not raised before us, I should not linger over it long, but I might point out, as an example of in-accuracies, that a writ in the nature of prohibition does not command anyone to refrain from usurping jurisdiction in respect of executive acts. As regards the order made by the learned Judge, there seems to have been little point in his quashing the notice made under Section 46(5-A), Income-tax Act, because, since his letter of 15-3-1955, the Income-tax Officei; was no longer pursuing his demand under that section. The demand which he initiated by his letter of 15-3-1955 and which he was repeating in his subsequent letters was a demand under Section 18(7) of the Act in respect of a sum which, according to him, ought to have been deducted under Section 18(3-A) and was payable by the party who was responsible for deducting it. Then again, if the notice of 15-3-1955 or the order contained in it was being quashed, there seems to have been no point in issuing a writ of mandamus and prohibition upon the respondents to the petition, prohibiting them to give any further effect to that notice. Obviously, nobody could give effect or further effect to a notice or order which had been quashed by this Court. In my view, it would have been more logical, more correct and sufficent, if only a writ of mandamus bad been issued and it had been limited to restraining the respondents to the petition from realising the sums mentioned in the notices or any part thereof from the respondent company. It was not correct to make the writs covet notices w.hich were being quashed.

13. The principal question in controversy in this appeal is whether the 'residence' contemplated by, Section 18(3-A), Income-tax Act, now Section 18(3-B), is physical residence or residence, as defined by the special definitions contained in the Act itself. It is not in Sub-section (3-A) alone that the expression 'not resident' occurs in Section 18. It occurs in other sub-Sections as well, for example, Sub-section (2-B). The word 'resident' again occurs in Sub-section (3-D) and the expression 'residing' in Sub-section (3-B). I am referring to the subsections as they stood numbered at the relevant time. The scheme of; Section 18 is that it requires persons responsible for making payments to third parties to make a deduction on account of tax, in certain cases irrespective of whether the payee is resident or nonresident in the taxable territories and in other cases if he is a non-resident. I can see no reason whatever for holding that, in Section 18, the Legislature was using the expressions 'resident' and 'non-residenf in the popular sense and not in the sense indicated by the definitions contained in the Act. The only reason which was urged before the learned trial Judge and repeated before us in support of the Department'3 contention was that to require a person, responsible for making payments to third parties, to decide for himself whether the payee was or was not a resident in the income-tax sense would be to impose upon him an impracticable task. Not only would it be impracticable, but it would also not be possible for any one to say with any degree of certitude at the time when a particular payment came to be made, whether or not the payee would be a resident or nonresident for his assessment for the year in question and that such difficulty about determining the residence of the payee would arise in the case of an individual as well as of a company. The 'residence and ordinary residence' of an individual requires an elaborate arithmetical calculation, spread over a large number of years and it is quite possible that a person, who is not resident in the income-tax sense at the time a particular payment comes to be made, may yet complete the necessary period of residence and become a resident before the accounting year has expired. In the same way, where the residence of a company cannot be determined by the location of the place from which its affairs are controlled and managed, but has to be determined by reference to the relation which its income, arising in the taxable territories, bears to the income arising without, it is equally impossible to say with any degree of certitude, in the middle of any accounting year, whether, at the end of it, the foreign income will or will not exceed the Indian income. It was accordingly said that the Legislature could not have intended to impose the plainly impossible task of determining a payee's residence in the income-tax sense on persons liable to make payments to third parties, that must have contemplated only plain physical residence whea it framed the various sub-sections of Section 18. I do not; however, think that the argument of difficulty can be a sufficient justification for accepting the Department's contention, because some difficulty is inherent in the terms of the various sub-sections of Section 1.8 and cannot possibly be avoided. Taking what was Section 18(3-A) at one time, and is now Section 18(3-B), the payer has not only to decide whether or not the payee is resident or not resident, but also, where he is paid, not an amount of interest but some 'other sum chargeable under the provisions of the Act' whether his total income will be large enough to attract tax. As in the case of residence, so in the case of the taxable quantum of the income, some estimate or sepeculation has necessarily to be made, if effect is to be given to the sub-section and it is to be worked. If the difficulty of determining whether or not the amount paid over to a third party is chargeable to tax is no impediment to an actual working of the sub-section, I can see no reason why the difficulty of determining the payee's residence should prove to be a greater impediment. The first proviso to the subsection added in 1940, purports to relieve the person responsible for making a payment to a third party of the difficult task of deciding at least one of the matters I have mentioned and lays the task on the Income-tax Officer. He is required to give a certificate, if approached, whether the total world income of the payee will be less than the minimum liable to income-tax or whether his total income will be liable to a rate of income-tax less than the maximum rate. This certificate has got to be given by the Income-tax Officer when the data, upon which the decision oi either of the two matters in question will ultimately depend, have not all come into existence and yet the certificate has got to be given. In the same way, the question of the payee's residence has got to be decided more or less in a rough and ready manner. While there is undoubtedly a difficulty, I cannot see in that difficulty any reason for holding that, in the various sub-sections of Section 18, the Legislature abandoned the definition sense of 'residence' and used the expression in the popular sense,

14. The matter may be examined further. If the residence contemplated be physical residence, the question inevitably arises: residence at what time? It must be residence at the time the payment is made. What with the nature of such residence be? If a casual visit suffices, it would be quite possible for any non-resident, entitled to receive income from persons in India, to pay occasional visits to this country at the time when the payments fall due and collect the amounts payable to them without any deduction of tax. If casual visits will nof suffice, but some kind of permanency of residence is required, a question again arises as to what the length or nature of such residence should be. There is no test or standard by which a person's residence in that! sense could be determined, unless one refers to and adopts the standard applicable to domicile. I am pointing out these considerations in order to show that the substitution of physical residence for the artificial kind of residence contemplated by the definitions in the Act does not simplify the task of the payer to any appreciable extent and does not conduce to the administration of the Act in a way, fairer to the revenues of the country.

15. It was contended on behalf of the respondent company before us that the definitions of 'residence' as given in Section 4-A of the Act were unqualified by any restrictions and, therefore, there could be no warrant for departing from those definitions in construing the term as occurring in any of the subsections of Section 18. It was pointed out that what Section 4-A said was that 'for the purposes of this Act'', an individual would be resident in certain circumstances and that in certain other circumstances a Hindu undivided family, a firm or other association of persons, would be resident and, in still other circumstances, a company would be resident. The usual qualification ''unless there is something repugnant in the subject or context', which one finds usually appended to statutory definitions and which occurs even in Section 2 of the present Act, is noticeably absent from Section 4-A. I do not, however, think that the absence of any qualifying words in' the definitions, given in Section 4-A, can by itself debar the Court from reading a qualification, if the context so requires or even excluding the definition altogether, if in a certain case it would be repugnant to the context. The qualifying words to which reference was made embody only a rule of construction which is of general application and does not require to be specifically mentioned in a statute in order to be ap-piied in the construction of definitions provided by it. That principle I think is well-settled and I need not proceed to cite authorities. If it could be shown that the definitions given in Section 4-A, if applied to Section 18(S-A), would make that section wholly unworkable, I would not find any difficulty in holding that in construing Section 18(3-A), the special definition of 'residence', contained in Section 4-A, could not be applied. As, however, I have already pointed out no such insuperable difficulty was made out.

16. If the contention of the Department was to be accepted, one would have to read Section 18 as contemplating not only persons, resident and nonresident in the income-tax sense, but also a third class of persons who might be not resident in the income-tax sense and yet physically resident at the time of a particular payment or resident in the income-tax sense, but not physically resident at the time of a payment. To introduce such an indeterminate and fluctuating class of residents would, in my view, increase rather than diminish the difficulties of working the section which are already not inconsiderable & would bring into existence a more or less chaotic condition. I can find nothing in the language of the section or in goad sense or right reason to hold that the 'residence' contemplated in the various subsections of Section 18, particularly Section I8(3-A), is something new arid strange and altogether different from the 'residence' contemplated by the definitions upon which the rest of the Act is based.

17. To my mind,'the answer to the question seems to be plain and speculation as to the true intention of the Legislature is altogether beside the point. The Legislature has left us in no doubt as to what it intended. As I pointed out in the course of the argument, the various sub-sections of Section 18, including Sub-section (3-A) do not stand by themselves, but are linked up with Sections 42 and 43 of the Act. The first Proviso to Section 42 says that where the person entitled to the income, profits or gains is not resident in the taxable territories,--it was 'British India' formerly--the income-tax, so chargeable, may be recovered by deduction under any of the provisions of Section 18. 'Any of, the provisions' would include Section 18(3-A). No one can contend that the 'nonresident', contemplated by Section 42, is only a person or a concern not physically resident. Again, the second Proviso to Section 18(3-A) itself lays down that nothing in the sub-section shall apply to any payment made in the course of transactions in respect of which the person responsible for making the payment is deemed under the first Proviso to Section 43 not to be an agent of the payee. Section 43 is concerned, inter alia, with persons residing out of the taxable territories and the first Proviso to the section speaks of a 'non-resident principal', while the second Proviso speaks of a 'non-resident person'. I think no one can say even in respect of Section 43 that the 'non-resident' contemplated by it is merely a person or concern who or which is not physically resident. If the 'non-resident' contemplated by Sections 42 and 43 is a party non-resident in the income-tax sense and if those two sections and Section 18, particularly Sub-section (3-A) of the section, are mutually inter-linked, I can see no escape from the conclusion that, in the contemplation of the Legislature, the 'non-resident' mentioned in Section 18(3-A) is also a non-resident in the income-tax sense and not merely a party who is physically non-resident. I am glad to be able to reach this conclusion, because, if the contention of the Department had to be accepted, I can see that strange results would follow in many cases. To take the instant case, here the Department assessed the vendor company as resident and ordinarily resident for the very year in question and yet it is insisting that the respondent company should have treated it as nonresident and should have deducted tax under Section 18 (3-A) and that not 'having done so, it has made itself personally responsible for the payment of the tax which it ought to have retained in its hands. This, looking at the matter from a broad and commonsense point of view, does not seem to be either logical or fair and I am glad to be able to hold that the Act does not justify the adoption of such an inconsistent attitude by the taxing authorities.

18. Two other points were canvassed before the learned Judge. It was contended that the application under Article 226 ought not to be entertained, because the respondent company had an alternative remedy by way of an appeal under Section 30(1-A). The learned trial Judge overruled that contention on the authority of the decision of the Supreme Court in the case of Himmatlal v. Madhya Pradesh, : [1954]1SCR1122 (A). Under Section Section 30(1-A) a person who denies his liability to make a deduction under Section 18 (3-A) and to pay the amount deducted can prefer an appeal only if he has actually deducted and paid the tax. The respondent company in the present case did not make any deduction under Section 18(3-A) and although it paid some tax on account of the Clive Investment Trust Company Limited, it paid ft on an altogether different basis. If it wished to acquire the right to appeal under Section 30(1-A), it would at least have to pay the balance of the tax which, according to the Department, was required to be deducted out of the consideration paid to the Clive Investment Trust Company Limited and only after it had paid that balance, could it become entitled to prefer an appeal. It is doubtful if even that would give the respondent company a right to appeal, because it would not have deducted and paid the tax, as required by Section 30(1-A). In any event, it would bave to pay down the entire amount of the tax deductible. The Supreme Court, in the case relied on, held that where a statute required the entire amount to be paid or deposited before an appeal could be preferred, the alternative remedy by way of an appeal was not an adequate remedy. In view of that decision, Mr. Meyer did not press before us the contention advanced before the trial Court.

19. It was also contended before the learned trial Judge and the contention was repeated before us that, at the worst, the Income-tax Officer had committed an error in the course of exercising a jurisdiction which he undoubtedly possessed and that such an error was not amenable to correction by the issuance of the prerogative writs, particularly certio-rari. It is true, as pointed out in the recent case of Rex v. Northumberland Compensation Appeal Tribunal; Ex parte Shaw, (1951) 1 KB 711, (B) and, on appeal, (1952) 1 KB 338 (C), that the writ of cer-tiorari had practically fallen into desuetude in England till it was revived by that case itself and that, for a long time, the writ used to be issued only in cases of excess or absence of jurisdiction. The true nature of the writ and the kind of errors to which it can go have now been clarified by two leading decisions, one. of which I have already cited, the other being Rex v. Nat Bell Liquors, Ltd., (1922) 2 AC 128 (D). The case last named is a decision of the Judicial Committee delivered through Lord Sumner. 'That supervision''--that is, the supervision by the Court through the issue of a writ of certiorari-- observed the learned Lord, ''goes to two points: one is the area of the inferior jurisdiction and the qualifications and conditions of its exercise; the other is the observance of the law in the course of its exercise.'' It will thus be seen that not merely error of jurisdiction, but error of law also can be corrected by a writ of certiorari. In the case of (1951) 1 KB 711 (B), Lord Goddard, C. J., had to deal with this matter when the case was in the High Court. 'The tribunal have told us,' observed the learned Lord Chief Justice, 'what they have taken into account, what they have disregarded, and the contentions which they accepted. They have told us their view of the law, and we are of opinion that the construction which they placed on this very complicated set of regulations was wrong.'' It is, therefore, no answer to an application for a writ of certiorari to say that the error at which it is directed is at its worst an error of law, committed in the course of the exercise of jurisdiction.

20. I must, however, add that the error must be an error apparent on the face of the record. It is trite knowledge that in connection with an application for certiorari, the applicant cannot state new facts to the Court, nor can invite a decision on questions of fact except when the issue involved is an issue of jurisdiction. The error of law which can be corrected by a writ of certiorari must be an error, writ on the face or the surface of the record and its presence on the surface is possible only when the order itself gives the reason or papers immediately connected with it. disclose it. 'If there was upon the face of the order of the Court of Quarter Sessions,'' observed Lord Cairns, L. C., in Walsall Overseers v. London and North Western Ry. Co., (1878) 4 AC 30 (E), 'anything which showed that that order was erroneous, the Court of Queen's Bench might be asked to have the order brought into it, and- to look at the order, and view it upon the face of it, and if the Court found error upon the face of it, to put an end to its existence by quashing it.' In order that the error may appear on the face of an order, the order has got to be what has been described as a 'speaking order,' that is to say, an order which gives the reasons for it, and if those reasons, as given by the authority of the order, are bad, 'out of their own mouths they may be condemned.'' But except on questions of jurisdiction, a party may not state further matters to the Court either by new affidavits or by producing anything that is not on, or part of, the record. If an error can be corrected by a cer-tiorari, only if it appears on the face of the order, as it used to be said at one time, or on the face of the record, as it has been said in one or two recent cases, it is pertinent to enquire what the record is. 'What, then is the record?' asked Denning, L. J,, in the Court of Appeal in (1952) 1 KB 338 (C), at p. 352, and after referring to certain decided cases, the learned Lord Justice answered his own question as follows :

'Following these cases, I think the record must contain at least 'the document which initiates the proceedings; the pleadings, if any; and the adjudication; but not the evidence, nor the reasons, unless the tribunal chooses to incorporate them. If the tribunal does state its reasons, and those reasons are wrong in law, certiorari lies to quash the decision.''

21. I have been at pains to refer to the second principle and to cite authority in support of it, because it appears from the paper-book of this case that the learned Judge directed the assessment records of the Clive Investment Trust Company Limited to be produced before him and he said in his judgment that the record in the present case 'would include the record which has been called for, including the assessment order'. This was said by the -learned Judge in the course of his making out that the error which he was correcting was an error appearing en the face of the record. I do not think that if a Court, approached for a writ of certiorari, itself calls for records of other proceedings, although those may be in some way connected with the proceedings, before him, such records can be said to be the 'record' for the purposes of a writ of certiorari, or that an error appearing from those subsidiary records, called for by the Court itself, would be an error on the face of the record, as contemplated by the law relating to this writ. This question arises only when the error alleged is not an error of jurisdiction, but only an error of law and in the case of such an error, it is not permissible to call for other records and seek the basis of the error there. In my view and with respect to the learned Judge, it was really not necessary to call for the assessment records and to base the decision even, in part, on them, because in his correspondence with the respondent company, the Income-tax Officer never denied that the Clive Investment Trust Company Limited had been assessed for the year 1948-49 as resident and ordinarily resident. As to whether that correspondence itself could properly be deemed to be a part of the 'record' of tbe case, I do not desire to express any opinion, since the matter was not argued.

22. I desire, however, to place on record my doubt as to whether the issue of a writ of certiorari was correct, alhough I would go no furher. The respondent company was undoubtedly entitled to relief and it appears to me that complete relief could have been given by a writ of mandamus, properly adjusted to the facts.

The writ of certiorari goes only to orders which are passed in a judicial or quasi judicial capacity. An Income-tax Officer undoubtedly acts in a judicial capacity in certain cases, but when he merely tells a party that he should have deducted and paid a certain amount under Section 18(3-A) of the Act and issues a notice to him to make the payment it appears to me that he is merely acting in an administrative capacity and is not making a judicial or a quasi judicial order. If the Income-tax Officer proceeds further arid imposes a penalty on the footing that the person responsible for making the payment and deducting tax had failed to do so without good reason, the order imposing penalty would perhaps be a judicial or quasi judicial order, There is no order in the present case, but only notices. I am not quite clear in my mind and, as at present advised, I do not think that mere notices, issued by officers of the Revenue Department for the purpose, of collecting tax from persons who, they think, have or ought to have some tax payable by other persons lying in their hands, can be quashed by a writ of certiorari. If a notice contains an order in the nature of an adjudication, the order can be quashed, but a mere notice asking for a payment cannot, it seems to me, be the proper objective of a writ of certiorari. This matter was also not argued before us and it would, therefore, not be right for me to express any final opinion or interfere with the order made by learned Judge.

23. I have already pointed out that from 15-3-1955, the Income-tax Officer was no longer proceeding under Section 46 (5A), nor is it anybody's case that the respondent company owed any further sum to the Clive Investment Trust Co. Ltd., or held any further sum on that company's account. The order quashing the notice of 10-3-1954, even assuming-that such a notice can be quashed, therefore, serves no purpose. In any event, the writs of mandamus and prohibition, restraining the Income-tax Officer from giving further effect to the very notices which were being quashed, appear to me to have been unnecessary and inapposite. The writ of prohibition, again, does not seem to have been appropriate, because that writ goes only to inferior tribunals to control judicial or quasi judicial action and is not intended to control executive acts or administrative action aimed at collection of revenue. These observations which I have felt bound to make will not cause any prejudice to the respondent company, because we are not interfering with the actual orders made by the learned Judges and, in any event, the writ of mandamus, restraining the Income-tax Officer and the Union of India from realising the sums mentioned in the notices or any part thereof secures for the respondent company complete and permanent relief.

24. For the reasons given earlier, this appeal fails and is dismissed with costs.

Das Gupta, J.

25. I agree.


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