1970 (7) TMI 4 - HC - Income Tax

Validity of an action of the executive authorities - appellant filed a suit for damages for the humiliation caused to him by his illegal arrest and detention - plea subsequently taken was that the defendants were entitled to the protection of the provisions of section 67 - held that recovery officer is protected by s. 67, IT Act

Issues Involved:
1. Validity of the stay order issued by the Income-tax authorities.
2. Jurisdiction of the Income-tax Officer to issue a stay order after the issuance of a recovery certificate.
3. Legality of the arrest and detention of the appellant.
4. Applicability of protections under Section 67 of the Income-tax Act and Section 233(m) of the Land Revenue Act.
5. Admissibility and proof of documentary evidence (Exhibit 40).
6. Quantum of damages awarded for false imprisonment.

Detailed Analysis:

1. Validity of the Stay Order Issued by the Income-tax Authorities:
The court examined whether the Income-tax authorities had the power to issue a stay order in the circumstances of the case. The relevant facts showed that the Inspecting Assistant Commissioner granted a stay order on March 22, 1952, conditioned on the deposit of Rs. 5,000 by March 29, 1952, which was fulfilled. Subsequently, the Income-tax Officer issued a stay order on April 13, 1953, communicated via Exhibit 40. The court found that Section 45 of the Indian Income-tax Act allowed the Income-tax Officer to treat an assessee as not being in default during the pendency of an appeal, thus validating the stay order.

2. Jurisdiction of the Income-tax Officer to Issue a Stay Order After the Issuance of a Recovery Certificate:
The court addressed whether the Income-tax Officer had the jurisdiction to issue a stay order after a recovery certificate had been issued under Section 46(2). The court concluded that the language of Section 45 allowed the Income-tax Officer to treat an assessee as not being in default during an appeal, irrespective of the issuance of a recovery certificate. The court emphasized that the legislative intent was to provide relief to the assessee and not to preclude the possibility of a stay order post-issuance of the recovery certificate.

3. Legality of the Arrest and Detention of the Appellant:
The court scrutinized the actions of the Additional District Magistrate (ADM) and the Tahsildar Magistrate, who proceeded with coercive measures despite the stay order. It was noted that the ADM was aware of the stay order but chose to ignore it, leading to the appellant's arrest on August 27, 1953. The court found the ADM's actions arbitrary and in utter disregard for the liberty of a citizen. The court held that the arrest and detention were without lawful justification, constituting false imprisonment.

4. Applicability of Protections under Section 67 of the Income-tax Act and Section 233(m) of the Land Revenue Act:
The court examined the respondents' claim for protection under Section 67 of the Income-tax Act and Section 233(m) of the Land Revenue Act. Section 233(m) was found inapplicable as the claim was in tort and not connected with the collection of revenue. Section 67's protection was also deemed inapplicable because the respondents' actions were not in good faith and were without jurisdiction. The court cited precedents affirming that civil courts retain jurisdiction in cases where statutory provisions have not been complied with or where fundamental principles of judicial procedure were not followed.

5. Admissibility and Proof of Documentary Evidence (Exhibit 40):
The respondents challenged the admissibility of Exhibit 40, arguing that no notice under Section 66 of the Indian Evidence Act was given for secondary evidence. The court found that the plaintiff had taken steps to summon the original document and was entitled to produce secondary evidence when the original was not produced. The court also noted that no objection to the mode of proof was raised at trial, making it inadmissible to raise such an objection on appeal.

6. Quantum of Damages Awarded for False Imprisonment:
The trial court had awarded Rs. 1,000 in damages, which the appellant sought to increase to Rs. 4,000. The court took a serious view of the unlawful actions of the respondents, emphasizing the importance of personal liberty. The court referenced Salmond on the Law of Torts, noting that actual damage need not be proved in cases of false imprisonment. Given the grave indignity and harassment suffered by the appellant, the court increased the damages to Rs. 2,000.

Conclusion:
The appeal succeeded, and the appellant's suit for damages was decreed to the extent of Rs. 2,000, with costs throughout. The court underscored the importance of personal liberty and the responsibility of public officials to act within the limits of their jurisdiction.

← Previous Next →