1966 (1) TMI 5 - HC - Income Tax

Arrest and detention for recovery of tax - Where the taxes assessed under the Travancore IT Act, 1121, the assessee is not liable to be arrested or detained in civil prison for non-payment and that his arrest and detention are illegal

Issues Involved:
1. Legality of arrest and detention for taxes assessed under the Travancore Income-tax Act.
2. Applicability of the Indian Income-tax Act to taxes assessed under the Travancore Act.
3. Res judicata concerning previous court decisions.
4. The form and propriety of the habeas corpus petition filed by the wife of the detained individual.
5. Alternative remedies and their impact on the habeas corpus motion.

Detailed Analysis:

1. Legality of Arrest and Detention for Taxes Assessed Under the Travancore Income-tax Act:
The court examined whether the process of arrest and detention is available for taxes assessed under the Travancore Income-tax Act. The petitioner argued that the detention was illegal as there was no provision in the Travancore law for the arrest and detention of an assessee for recovery of income-tax. The court concluded that since the Travancore Act was saved for the purposes of levy, assessment, and collection of taxes for the years prior to 1950-51, the Indian Income-tax Act could not apply retrospectively to those periods. Therefore, the arrest and detention for taxes assessed under the Travancore Act were deemed illegal.

2. Applicability of the Indian Income-tax Act to Taxes Assessed Under the Travancore Act:
The court analyzed Section 13(1) of the Finance Act, 1950, which preserved the Travancore Act for the assessment and collection of taxes for periods before April 1, 1950. The court referenced Supreme Court decisions, including Union of India v. Madan Gopal Kabra, Commissioner of Income-tax v. Patiala Cement Co. Ltd., and A. N. Lakshman Shenoy v. Income-tax Officer, Ernakulam, which clarified that the Indian Income-tax Act does not apply retroactively to taxes assessed under the Travancore Act. The court concluded that the Indian Act replaced the Travancore Act without retrospection, and the latter continued to govern the collection of taxes for periods it covered.

3. Res Judicata Concerning Previous Court Decisions:
The court addressed the revenue's contention that the issue was res judicata due to a previous decision in O.P. No. 819 of 1963. The court clarified that the previous case dealt with the execution of a certificate under the Indian Income-tax Act, 1922, and did not address the non-availability of arrest and detention for taxes assessed under the Travancore Act. Therefore, the current issue was not barred by res judicata.

4. The Form and Propriety of the Habeas Corpus Petition Filed by the Wife of the Detained Individual:
The court considered the propriety of the habeas corpus petition filed by the assessee's wife. The petitioner's wife filed the petition at her husband's instance, supported by his affidavit. The court noted that technicalities should not obstruct the protection of personal liberty. The Supreme Court's observations in Ranjit Singh v. State of Pepsu emphasized the importance of expeditious and simple habeas corpus proceedings. The court found the petition proper and overruled the contention against its form.

5. Alternative Remedies and Their Impact on the Habeas Corpus Motion:
The revenue argued that the existence of an alternative remedy (an appeal before the Board of Revenue) should bar the habeas corpus motion. The court emphasized that Article 21 of the Constitution guarantees personal liberty and that habeas corpus proceedings should be expeditious. The court referenced the Supreme Court's stance in Ranjit Singh v. State of Pepsu and Calcutta Discount Co. Ltd. v. Income-tax Officer, which supported quick relief through habeas corpus when personal liberty is at stake. The court decided to exercise its jurisdiction to safeguard the assessee's personal liberty.

Conclusion:
The court declared the assessee's detention illegal because it was for a composite sum, part of which was assessed under the Travancore Income-tax Act, for which the process of arrest and detention was not available. The court ordered the release of the assessee, who was on bail, and emphasized that the respondents could take fresh steps according to law for taxes assessed under the Indian Income-tax Act for subsequent years. No order as to costs was made.

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