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Shambhoo Prosad Bajoria and ors. Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberAppeal from Appellate Decree No. 1827 of 1970
Judge
Reported in[1979]120ITR782(Cal)
ActsIncome Tax Act, 1961 - Section 159 and 159(4) - Schedule - Rules 9, 11 and 11(6); ;Public Demands Recovery Act, 1913 - Section 37
AppellantShambhoo Prosad Bajoria and ors.
RespondentUnion of India (Uoi) and ors.
Appellant AdvocateS.N. Saraf and ;Gouri Sankar Gupta, Advs.
Respondent AdvocateBalai Pal and ;N.N. Pal, Advs.
Cases ReferredM. R. Radhakrishnan v. Union of India
Excerpt:
- .....of rule 11 of schedule ii to the i.t. act would also render the present suit a premature one. sub-rule (1) of rule 11, referred to above, provides that where any claim is preferred to, or any objection is made to, the attachment or sale of any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the tro shall proceed to investigate the claim or objection. thus, the question raised in the instant suit is one which could have been raised before the tro according to the provisions of sub-rule (1) of rule 11 referred to above. the provisions of sub-rule (6) of rule 11 entitle the party against whom an order under the sub-rules that precede sub-rule (6) is made to institute a suit in a civil court to establish the right which he.....
Judgment:

D.C. Chakravorti, J.

1. This appeal is from the judgment and decree passed by the Additional District Judge, 13th Court at Alipore, reversing those passed by the Munsif, 2nd Court at Alipore.

2. Facts relevant for the purpose of this appeal are, briefly stated, as follows :

3. The plaintiffs-appellants are the sons of Ramnath Bajoria, since deceased, by his first wife. Their eldest brother. Ram Prosad Bajoria, separated from his father during the latter's lifetime. On the death of Ramnath, dispute arose between the plaintiffs and their step-mother, Smt. Tribeni Debi, over the properties left by their father. Tribeni Debi claimed the entire estate left by Ramnath. For realisation of the tax dues of the said Ramnath, several certificate cases were started against the plaintiffs and some properties of the plaintiffs were illegally attached on different dates. Such attachment was illegal. On these allegations, the plaintiffs brought the instant suit praying for, among others, the following reliefs:

(a) a declaration that the plaintiffs are not liable in their personal capacity for the alleged tax dues of late Ramnath Bajoria ;

(b) a declaration that the attachment of properties belonging to the plaintiffs is illegal, ultra vires, without jurisdiction and void ; and

(c) permanent injunction restraining the defendants, their agents and servants from taking any step against the plaintiffs for realisation of tax liabilities of late Ramnath Bajoria,

4. The defendant No. 1, Union of India, filed a written statement and its case is that the plaintiffs inherited the properties from Ramnath Bajoria and were in possession of the same and that, accordingly, they cannot escape the liability. Defendants Nos. 2 to 4, who contested the suit by filing a separate written statement, asserted that as the certificate dues of the said Ramnath were not paid, the execution ought to follow.

5. The learned Munsif decreed the suit on contest, with costs against defendants Nos. 1 to 4 and ex parte without costs against the other. The learned Munsif declared that the plaintiffs were not liable in their personal capacity for the tax liabilities of late Ramnath Bajoria and that the attachment of properties belonging to the plaintiffs was illegal, ultra vires, without jurisdiction and void. The defendants were also permanently restrained from realising the tax dues of late Ramnath Bajoria from the plaintiffs. On appeal by the Union of India, defendant No. 1, referred to above, the learned Additional District Judge set aside the judgment and decree passed by the learned Munsif. He also dismissed the suit. The learned Additional District Judge took the view that the provisions of Rule 9, Schedule II of the I.T. Act, 1961, and also those of Section 37 of the Public Demands Recovery Act, 1913, stood as a bar to the institution of the suit and, as such, the suit was not maintainable.

6. It is significant to note here that the first relief claimed in this suit was a declaration that the plaintiffs were not liable in their personalcapacity for the alleged tax liability of late Ramnath Bajoria. Section 159(1) of the I.T. Act, 1961, provides that where a person dies, his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. Sub-section (3) of the said section further provides that the legal representatives of the deceased shall, for the purposes of this Act, be deemed to be an assessee. Sub-section (4) of that section is in the following terms :

' Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of, or parted with.'

7. It appears from the provisions of Section 159 referred to above that the law has clearly laid down as to what the liability of a legal representative of the deceased assessee would be and its extent. Further, it is also clear from the provisions referred to above that, ordinarily, the legal representative would not be personally liable for the tax liability of the deceased excepting in the circumstances referred to in Sub-section (4) quoted above. Thus, the declaration sought for was laid down by the provisions of Section 159 of the I.T. Act, 1961, and a suit ought not to lie for such a declaration as is already contained in the statute book. Accordingly, the first relief claimed by the plaintiffs-appellants cannot form the basis of a suit.

8. The second relief is one asking for a declaration that the attachment of properties belonging to the plaintiffs is illegal, ultra vires, without jurisdiction and void. It is significant to note that in the plaint no list of properties is given which are said to be the personal properties of the plaintiffs. It is to be remembered that in this case only one witness was examined on behalf of the plaintiffs and he is one of the plaintiffs. No other witness was examined on either side. There were some documents filed on behalf of both the parties. During his deposition, PW-1 did not give any list of properties which, according to him, were attached and were the personal properties of the plaintiffs. Further, it will appear from what the witness stated in cross-examination and examination-in-chief that he was. not a dependable witness. He gave out blatant lies. In the course of his examination-in-chief, he stated that they, the plaintiffs, did not get properties of their father. Further, he stated that he prayed for a declaration that the plaintiffs had no responsibility for their father's tax liability. This witness admitted having had filed a partition suit in this court and it will appear from a copy of the plaint in the said partitionsuit (Ex. A) that the plaintiffs claimed specific shares in the properties left by their deceased father, Ramnath Bajoria. This witness further stated that at the time of the death of their father, the plaintiffs were living jointly with him. He also admitted that his father did not leave any will. In cross-examination, he also denied that the plaintiffs got by inheritance properties left by their father. From what has been stated above, it appears clearly that this witness who is one of the plaintiffs was making palpably false statements. Accordingly, no reliance can be placed on this witness.

9. Even though, in this case, a few copies of the list of immovable properties (Ex. 6 series) stated to have been attached in execution of the distress warrant were filed, there is nothing on record to show that they were the properties claimed by the plaintiffs to be their personal properties. I have already pointed out that even the plaintiffs make no mention of the properties which were said to have been attached and which the plaintiffs claimed to be their personal properties. In the circumstances, even on merits, the courts would not be justified in making the second declaration asked for by the plaintiffs.

10. Mr. Saraf appearing for the appellants contends that the court of appeal below erred in not holding that the plaintiffs were entitled to declaration that the properties attached were the persona! properties of the plaintiffs and were not liable to be attached in execution of the certificates which were filed before the TRO. From what has already been stated, it will appear that there is nothing on record to show which of the attached properties were the personal properties of the plaintiffs. It was not contended on the side of the appellants that the certificates were not duly filed. They also did not allege any case of fraud. It has also to be noted that on the side of the plaintiffs, no evidence was adduced to establish as to which of the attached properties belonged to them. In the circumstances, even if the suit were maintainable, the declaration asked for could not have been granted.

11. Further, it will appear from the discussions that will follow that the suit was barred by the provisions of Rule 9, Schedule II, of the I.T. Act, 1961, and also Section 37 of the Public Demands Recovery Act, 1913. The text of the said Rule 9 is quoted hereunder :

' 9. General bar to jurisdiction of Civil Courts, save where fraud alleged.--Except as otherwise expressly provided in this Act, every question arising between the Income-tax Officer and the defaulter or their representatives, relating to the execution, discharge or satisfaction of a certificate duly filed under this Act, or relating to the confirmation or setting aside by an order under this Act of a sale held in execution of such certificate, shall be determined, not by suit, but by order of the Tax Recovery Officer before whom such question arises :

Provided that a suit may be brought in a Civil Court in respect of any such question upon the ground of fraud.'

12. Section 37 of the Public Demands Recovery Act, 1913, provides as follows :

' Except as otherwise expressly provided in this Act, every question arising between the certificate holder and the certificate-debtor, or their representatives, relating to the making, execution, discharge or satisfaction of a certificate duly filed under this Act, or relating to the confirmation or setting aside by an order under this Act of a sale held in execution of such certificate, shall be determined, not by suit, but by order of the Certificate Officer before whom such question arises, or of such other Certificate Officer as he may determine :

Provided that a suit may be brought in a civil court in respect of any such question upon the ground of fraud.'

13. The learned advocate appearing for the appellant argues that the court of appeal below was wrong in holding that the provisions of Section 37 of the Public Demands Recovery Act and those of Rule 9 contained in Schedule II of the I.T. Act, 1961, barred the present suit. Thus, according to both the provisions referred to above, any question relating to the execution, discharge or satisfaction of a certificate duly filed under the I.T. Act arising between the ITO and the defaulter or their representatives shall be determined not by a suit but by an order of the TRO before whom such question arises. This is, however, to be read subject to any express provision that is contained in the respective Acts enabling a party to bring a suit. The proviso to both the said rule and Section 37 make it clear that a suit may be brought in a civil court in respect of any such question as is referred to above on the ground of fraud. In the present case, the plaintiffs-appellants alleged no fraud. Further, the learned advocate very fairly conceded that their case was not that there was any fraud vitiating any of the acts impugned in the plaint. Further, after the certificate was duly filed, the TRO proceeded according to law in realising the debts of the defaulter or his representatives. The plaint case shows that the personal properties of the representatives of the said deceased, Ramnath, were being attached. The question whether the personal properties of the representatives were being attached in execution of the certificate in question is, therefore, one relating to the execution of the certificate and, unless otherwise expressly provided by the respective Acts, namely, the I.T. Act, or the Public Demands Recovery Act, no suit will lie for the determination of any question which comes within the purview of the questions referred to in the said Rule 9 or the said Section 37. Thus, the court of appeal below was justified in holding that the present suit was barred bythe provisions of Rule 9 of Schedule II to the I.T. Act, 1961, and Section 37 of the Public Demands Recovery Act, 1913.

14. Further, the provisions of rule 11 of Schedule II to the I.T. Act would also render the present suit a premature one. Sub-rule (1) of Rule 11, referred to above, provides that where any claim is preferred to, or any objection is made to, the attachment or sale of any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the TRO shall proceed to investigate the claim or objection. Thus, the question raised in the instant suit is one which could have been raised before the TRO according to the provisions of Sub-rule (1) of Rule 11 referred to above. The provisions of Sub-rule (6) of Rule 11 entitle the party against whom an order under the sub-rules that precede Sub-rule (6) is made to institute a suit in a civil court to establish the right which he claims to the property in dispute but subject to the result of such suit, if any, the order of the TRO shall be conclusive. This shows that when any claim is preferred or any objection is made to the attachment or sale of any property in execution of a certificate on the ground that such property is not liable to attachment or sale, the TRO shall proceed to investigate such claim or objection and it is only after the completion of such investigation and the making of an order by the TRO that a party aggrieved by such order may bring a suit in civil court. In the present suit, there is nothing to indicate that such stage was reached. Accordingly, even though Sub-rule (6) of Rule 11 expressly provides that a suit may be brought by the party aggrieved, such a suit can be brought only after the termination of the investigation referred to above. Having regard to the provisions of Rule 11, it ought to be held that the present suit was a premature one.

15. In support of his contention that the suit was not a premature one, the learned advocate appearing for the appellants refers me to the decision in M. R. Radhakrishnan v. Union of India : [1959]35ITR142(Mad) . A perusal of that decision will show that no note was taken of the specific provisions of Rule 11 to Schedule II of the I.T. Act. Accordingly, the decision referred to and relied upon by the learned advocate for the appellants is of no avail to him.

16. No other question was raised in this appeal. As all the contentions advanced by the learned advocate for the appellants fail, the appeal is dismissed. In the circumstances of the case, I make no order as to costs.


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