LORT-WILLIAMS, J. - This is an application by the Commissioner of Income Tax, Bengal, for a certificate that this is a fit case for appeal to His Majesty in Council.
The petition was presented on November 12th, the first day of sitting of the Court after the long vacation and was within time. But counsel on behalf of the respondents objected that although the petition had been served upon his clients, the notice a motion served upon them was insufficient because it was not in proper form. The notice omitted to call upon the opposite party to show cause as required by Chapter XXXIII, Rule 3, of the Rules and Orders of this Court. The Court gave leave to the petitioner to amend the notice and directed him to re-served it. This was done on November 13th.
Counsel for the respondents then objected that the petition was barred by limitation because the amended noticed was not given for the first day fixed for hearing privy Council matters after the long vacation, as required by the rule and the provisions of the Limitation Act.
The Advocate-General on behalf of the petitioner countered this objection by arguing that Chapter XXXIII, Rule 3, thereof has no application to income tax appeals and that these are governed solely by the provisions of the Code of Civil Procedure. The point is of importance, because hitherto it has been assumed that the practice on petitions for leave to appeal to the Privy Council in income tax matters is governed by Chapter XXXIII, and this practice has been followed for many years. Rules under the Income Tax Act have been made by this court and are contained in Chapter XXX-A, but they do not touch the point in issue which is a matter of practice.
Section 106 (2) of the Government of India (Consolidating) Act, 1915, provides that
'The High Courts have not and may not exercise any original jurisdiction in any matter concerning the revenue or concerning any act ordered or done in the collection thereof, according to the usage and practice of the country or the law for the time being in force.'
But Section 66 (1) of the Income Tax Act provides that 'If in the course of any assessment under this Act or any proceeding in connection therewith other than a proceeding under Chapter VIII, a question of law arisen, the Commissioner may, either on his own motion or on reference from any income-tax authority subordinate to him, draw up a statement of the case and refer it with his own 'opinion thereon to the High Court'; and sub-Sections (2) and (3) provide for similar references at the instance of the assessees.
Sub-Section (5) provides 'The High Court, upon the hearing of any such case, shall decide the questions of law raised thereby, and shall deliver its judgment thereon containing the grounds on which such decision is founded and shall send to the Commissioner by whom the case was stated a copy of such judgment under the seal of the Court and signature of the Registrar, and the Commissioner shall dispose of the case accordingly...'
It is clear, therefore, that the jurisdiction conferred upon the Court by this section is a special jurisdiction and forms no part of the Courts original or appellate jurisdiction. (See Raja Probhat Chandra Baruas Case, and Alcock Ashdown Case) and, as was decided in the case of In re Makhan Lal Ram Sarup, the High Court is not a Court of appeal in income tax cases. Its functions are confined strictly to the disposal of references on points of law under this section.
Section 66-A (1) provides that 'When any case has been referred to the High Court under Section 66, it shall be heard by a Bench of not less than two Judges of the High Court, and in respect of such case the provisions of Section 98 of the Code of Civil Procedure, 1908, shall, so far as may be, apply notwithstanding anything contained in the Letters Patent of any High Court established by Letters Patent or in any other law for the time being in force.'
Sub-Section (2) provides that 'An appeal shall lie to High Majesty in Council from any judgment of High Court delivered on a reference made under Section 66 in any case which the High Court certifies to be fit one for appeal to His Majesty in Council.'
Sub-Section (3) provides that 'the provisions of the Code of Civil Procedure, 1908, relating to appeals to His Majesty in Council shall, so far as may be, apply in the case of appeals from decrees of a High Court.'
Sub-Section (5) provides that 'Nothing in this section shall be deemed - (a) to bar the full and unqualified exercise of His Majestys pleasure in receiving or rejecting appeals to His Majesty in Council, or otherwise however, or (b) to interfere with any rules made by the Judicial Committee of the Privy Council, and for the time being in force, for the presentation of appeal to His Majesty in Council, or their conduct before the said Judicial Committee.'
Section 98 (1) of the Code of Civil Procedure provides that 'Where an appeal is heard by a Bench of two or more Judges, the appeal shall be decided in accordance with the opinion of such Judges or of the majority (if any) of such Judges.'
Section 98 (2) provides that 'Where there is no such majority which concurs in a judgment varying or reversing the decrees appealed from, such decree shall be confirmed.
Provided that where the Bench hearing the appeal is composed of two Judges belonging to a Court consisting of more than two Judges, and the Judges composing the Bench differ in opinion on a point of law, they may state the point of law upon which they differ and the appeal shall then be heard upon that point only by one or more of the other Judges, and such point be decided according to the opinion of the majority (if any) of the Judges who have heard the appeal including those who first heard it.'
Section 98 (3) provides that 'Nothing in this section shall be deemed to alter or otherwise affect any provision of the Letters Patent of any High Court.'
Section 109-112 and Order 45 in the First Schedule deal with the matter of appeals to the King in Council.
Order 45, Rule 2, provides that 'Whoever desire to appeal to His Majesty in Council shall apply by petition to the Court whose decree is complained of.'
Rule 3 provides that (1) 'Every petition shall state the grounds of appeal and pray for a certificate either that as regards amount or value and nature, the case fulfills the requirements of Section 110, or that it is otherwise a fit one for appeal to His Majesty in Council.'
(2) 'Upon receipt of such petition, the Court shall direct notice to be served on the opposite party to show cause why the said certificate should not be granted.'
Section 121 of the Code provides that 'The rules in the first Schedule shall have effect as if enacted in the body of this Code until annulled or altered in accordance with provisions of this part.'
Section 122 of the Code 'High Courts established under the Indian High Courts Act, 1861, or the Government of India Act, 1915, and the Chief Court of Oudh, may, from time to time after previous publication, make rules regulating their own procedure and the procedure of the Civil Courts subject to their superintendence, and may by such rules annul, alter or add to all or any of the rules in the First Schedule.'
Section 123 provides for the constitution of a Committee to be called the Rule Committee.
Section 124 provides that 'Every Rule Committee shall made a report to the High Court established at the town at which it is constituted on any proposal to annul, alter or add to the rules in the first Schedule or to make new rules, and before making any rules under Section 122 the High court shall take such report into consideration.'
Section 126 provides that the Rules shall be subject to certain sanctions.
Section 127 provides for the publication of the rules in the Gazette of India or the local official Gazette, as the case may be.
Section 128 states the matter for which the rules may provide.
Section 129 provides that 'Notwithstanding anything in this Code, any High Court established under the Indian High Courts Act, 1861, or the Government of India Act, 1915, may make such rules not inconsistent with the Letter Patent establishing it to regulate its own procedure in the exercise of its original civil jurisdiction as it shall think fit, and nothing herein contained shall affect the validity of any such rules in force at the commencement of this Code.'
No rules have been made by this Court under the provisions of Sections 122 which alter the provisions of Order 45. The rules in Chapter XXXIII, so far as they have the effect of altering the provisions, have been made under Section 129 and apply to matters arising within the original civil jurisdiction of the Court and therefore have no application to income tax appeals. The Act does not lay down any rules of procedure for references under Section 66 of the Code this Court has made the rules contained in Chapter XXX-A. This it had jurisdiction to do in the absence of any specific provision in the Act. [Smith v. Williams, (8 Tax Cases 321), per SANKEY, J.]. In Section 66-A specific provision has been made and the procedure therein laid down must be followed.
The result is that the petition in this case was presented to the Court within time, and the Court directed notice to be served on the opposite party as provided in Order 45. In my opinion, this case raises a substantial question of law, and is one of great public importance, and is a fit case for appeal to His Majesty in Council. Therefore, the certificate is granted and the petition allowed with costs.
JACK, J. - I agree.