1958 (2) TMI 55 - HC - Income Tax

Summary

Issues Involved:
1. Legality of the prohibitory orders issued by the Additional Collector of Bombay.
2. Amendment of the petition.
3. Maintainability of the petition by a benamidar.
4. Availability of alternative remedies.

Detailed Analysis:

1. Legality of the Prohibitory Orders:
The petitioner challenged two prohibitory orders issued by the Additional Collector of Bombay, arguing that they were illegal and sought a writ of Mandamus under Article 226 of the Constitution to withdraw or cancel these orders. The orders were issued to recover arrears of income tax amounting to Rs. 2,84,042-10-6. The petitioner contended that the 4th respondents, who owned the shares in question, were not the assessees and thus not liable for the arrears of income tax. The Court noted that the assessments for the years 1952-53 to 1955-56 remained unpaid, leading to the issuance of certificates by the Income Tax Officer to the Additional Collector for recovery under Order 21 Rule 46 of the Civil Procedure Code.

2. Amendment of the Petition:
The petitioner sought to amend the petition to introduce new grounds for challenging the orders, including the lack of notice under Section 29 of the Income Tax Act and the jurisdiction of the Additional Collector to proceed under laws other than the Bombay City Land Revenue Act II of 1876. The Court rejected the amendment, stating that it would change the entire basis and tenor of the petition, which was initially based on the petitioner being a benamidar. The Court also highlighted the considerable delay in seeking the amendment, which was asked for 11 months after the original petition was filed.

3. Maintainability of the Petition by a Benamidar:
The Court examined whether a benamidar could maintain a writ petition. The petitioner admitted to being a benamidar of the shares owned by the 4th respondents. The Court held that a benamidar, being a mere ostensible owner without any beneficial interest, could not maintain a writ petition, especially when the real owners (the partners of the 4th respondents) were divided in their stance. The Court cited precedents indicating that a benamidar could not file a suit or proceeding against the wishes of the real owners.

4. Availability of Alternative Remedies:
The Court considered whether the petitioner had other adequate and efficacious remedies available. The respondents argued that the petitioner could have filed an application to the Collector, an appeal under the Bombay City Land Revenue Act, or a suit under Order 21 Rule 63 of the Civil Procedure Code. The Court agreed, noting that the petitioner had not exhausted these remedies and that the extraordinary jurisdiction under Article 226 should be sparingly used. The Court also referenced the decision in Walchandnagar Industries Ltd. v. State of Bombay, which emphasized that the High Court would not exercise its discretion under Article 226 if an equally adequate and prompt remedy was available in ordinary courts of law.

Conclusion:
The Court upheld the preliminary objections raised by the respondents, dismissed the petition, and made no order as to costs. The decision emphasized the importance of exhausting alternative remedies and the limited scope for amending petitions seeking extraordinary writs.