1957 (4) TMI 76 - HC - Income Tax

Summary

Issues Involved:
1. Validity of the appointment of the certificate officer.
2. Necessity of a second notice of demand under section 29 after appellate reduction.
3. Competency of simultaneous proceedings under section 46(2) and section 46(5A).
4. Constitutionality of sections 51 and 53 of the Public Demands Recovery Act.

Detailed Analysis:

1. Validity of the Appointment of the Certificate Officer:
The firm contended that the certificate officer, Mr. D.K. Ghosh, was not properly appointed and thus lacked jurisdiction. Initially, Mr. Ghosh's appointment as an Additional District Magistrate was invalid as he was not first appointed a magistrate of the first class, violating section 10(2) of the Criminal Procedure Code. This initial appointment was indeed invalid, as confirmed by the court. However, Mr. Ghosh's subsequent appointment on February 13, 1954, was valid. By this appointment, he was first vested with the powers of a magistrate of the first class and then appointed as an Additional District Magistrate, satisfying the statutory requirements. Consequently, Mr. Ghosh acquired the status of a certificate officer under the Public Demands Recovery Act. The court also noted that the definition of "Collector" in the Public Demands Recovery Act sufficed, making reference to the Bengal General Clauses Act unnecessary.

2. Necessity of a Second Notice of Demand Under Section 29:
The firm argued that after the appellate reduction of the tax, a fresh notice of demand under section 29 was required to make the tax payable. The court disagreed, stating that if a proper notice of demand was initially served, and the tax was subsequently reduced on appeal, no second notice was necessary. The original notice covered the reduced amount, and the reduction merely eliminated the excess demand. The court referenced the case of Metropolitan Structural Works Ltd. v. Union of India to support that while a second notice is permissible, it is not obligatory when the tax amount is reduced on appeal. The court also agreed with the Allahabad High Court's view in Municipal Board, Agra v. Commissioner of Income-tax that amendments to the certificate to reflect the reduced tax amount satisfy legal requirements.

3. Competency of Simultaneous Proceedings Under Section 46(2) and Section 46(5A):
The firm contended that simultaneous proceedings under sections 46(2) and 46(5A) were not permissible. The court held that section 46(2) and section 46(5A) are not mutually exclusive and can be pursued concurrently if special reasons are recorded. The explanation to section 46(7) clarified that multiple modes of recovery are lawful. The Income-tax Officer had recorded reasons for proceeding under section 46(5A), noting delays in the certificate proceedings, thus justifying the simultaneous action.

4. Constitutionality of Sections 51 and 53 of the Public Demands Recovery Act:
The firm argued that sections 51 and 53 were unconstitutional as they created unreasonable classification among certificate debtors, violating article 14 of the Constitution. The court found this point irrelevant to the case since the firm did not attempt to appeal under these sections. Furthermore, the court noted that the sections did not inherently discriminate between debtors but provided for different appellate and revision mechanisms based on the initial authority handling the case. The court emphasized that no one has a vested right of appeal, and the provisions did not direct administrative discrimination.

Conclusion:
The court dismissed the appeal on all grounds, upholding the validity of the certificate officer's appointment, the sufficiency of the original notice of demand, the legality of simultaneous proceedings under sections 46(2) and 46(5A), and the constitutionality of sections 51 and 53 of the Public Demands Recovery Act. The appeal was dismissed with costs, certified for two counsel.