1962 (9) TMI 93 - HC - Income Tax

Summary

Issues Involved:
1. Competency of Shri D.S.P. Mukherjee to hear and dispose of the petition under section 9.
2. Validity of assessments and certificates issued under the Excess Profits Tax Act, 1940.
3. Payment of tax dues and adjustments against refunds.
4. Specificity and sufficiency of details in the certificates.
5. Validity of the certificates' form and the notices under section 7.
6. Constitutionality of the Bengal Public Demands Recovery Act, 1913, and West Bengal Act XI of 1961.

Detailed Analysis:

1. Competency of Shri D.S.P. Mukherjee:
The petitioner contended that Shri D.S.P. Mukherjee had no power to hear and dispose of the petition under section 9 as he was not the successor in office of Shri S.K. Banerjee. This contention was raised for the first time before the Board of Revenue, which rightly rejected it on the ground that the plea involved new questions of fact and could not be entertained for the first time in revision.

2. Validity of Assessments and Certificates:
The petitioner argued that the assessments of excess profits tax could not lawfully be made upon the partners of the petitioner firm in the firm name. The court found no substance in this contention. Under section 14(3) of the Excess Profits Tax Act, 1940, the assessment could be made upon the partners jointly in the partnership name. Sections 29, 45, and 46 of the Indian Income-tax Act, 1922, applied to the Excess Profits Tax Act, allowing the notice of demand to be served upon the partnership firm. Thus, the assessment, notice of demand, requisition for the certificates, and the certificates in the name of the petitioner firm were lawfully issued.

3. Payment of Tax Dues and Adjustments:
The petitioner contended that a large sum of money had been paid on account of tax dues. The Certificate Officer and the Commissioner rejected this contention as no challans showing the alleged payments were forthcoming. The petitioner further argued that on adjustment of accounts, no money would be found due to the Union of India, relying on letters from the Income-tax Officer. However, no order for refund under section 48 of the Indian Income-tax Act, 1922, was shown, and it was not established that any ascertained sum of money was presently payable to the petitioner on account of refund. Therefore, the petitioner did not establish any ground for setting aside, varying, or modifying the certificates under section 10 of the Bengal Public Demands Recovery Act, 1913.

4. Specificity and Sufficiency of Details in Certificates:
The petitioner argued that the certificates were invalid as they did not specify the dates of commencement of the chargeable accounting periods and the income-tax on the basis of which the excess profits tax was assessed. The court held that the certificates sufficiently identified the public demands by specifying the chargeable accounting periods ending on the specified dates. It was not necessary to specify explicitly the dates of the commencement of the chargeable accounting periods or to mention the income-tax basis.

5. Validity of Certificates' Form and Notices:
The validity of the certificates was attacked on the ground that they were not in the prescribed form. The court found that the certificates sufficiently identified the certificate-debtor, certificate-creditor, and the public demand, and certified that the demand was due and recoverable, satisfying the test of a valid certificate. The notices under section 7 were also challenged for not being signed on the same date as the certificates. The court held that the absence of such amendment did not invalidate the notices issued in the instant case. Furthermore, the Bengal Public Demands Recovery (Validation of Certificates and Notices) Act, 1961, provided that no certificate or notice should be deemed invalid merely on the ground of defect, error, or irregularity in the form.

6. Constitutionality of the Bengal Public Demands Recovery Act, 1913, and West Bengal Act XI of 1961:
The petitioner contended that the Bengal Public Demands Recovery Act, 1913, and West Bengal Act XI of 1961 were invalid as they were laws with respect to entry No. 43 of the Concurrent List, requiring the President's assent under article 254(2) of the Constitution. The court held that the Bengal Public Demands Recovery Act, 1913, was a State law providing for the speedy recovery of public demands of the State of West Bengal and was covered by entries Nos. 3 and 45 of the State List. Consequently, the West Bengal Act XI of 1961 was also a law with respect to matters enumerated in the State List, and the State Legislature was competent to enact this law without the President's assent.

Conclusion:
The rule was discharged, and there was no order as to costs. The court validated the certificates and notices, upheld the constitutionality of the Bengal Public Demands Recovery Act, 1913, and West Bengal Act XI of 1961, and found no merit in the petitioner's contentions.