1970 (9) TMI 28 - HC - Income Tax

Applicability of provisions of the Orissa Public Demands Recovery Act 1962 after coming into force of the Income-tax Act 1961

Summary

Issues:
Recovery of income-tax dues under the Orissa Public Demands Recovery Act, 1963 (1963 Act) despite the existence of the Income-tax Act, 1961 (1961 Act).

Analysis:
The petitioner, a partner in a registered firm, challenged the initiation of recovery proceedings under the 1963 Act by the Certificate Officer, arguing that the tax dues should be recovered following the procedure outlined in the 1961 Act. The petitioner contended that the specific modes of recovery provided in the 1961 Act exclude the applicability of the 1963 Act for income-tax recovery. The court examined the provisions of the 1961 Act, particularly Section 222, which sets out the procedure for recovery of tax dues. It noted that the 1961 Act provides a comprehensive mechanism for recovery, including appointing a receiver for managing the assessee's properties. The court highlighted that the absence of a similar provision in the 1963 Act creates a potential for discrimination if two different modes of recovery are allowed.

The court emphasized that when a statute specifies a particular mode of recovery for a certain demand, that mode must be exclusively followed for recovery. In this case, the court found that the procedure prescribed in the Second Schedule of the 1961 Act should have been followed by the Certificate Officer, who was also recognized as the Tax Recovery Officer. The court concluded that the petitioner's contention regarding the correct procedure for recovery under the 1961 Act was valid. Consequently, the court allowed the writ application, quashed the proceedings initiated under the 1963 Act, and directed the Certificate Officer to proceed in accordance with the recovery procedure outlined in the Second Schedule of the 1961 Act. The judgment was delivered unanimously by the judges, with Justice Das concurring with the Chief Justice's decision.

In summary, the judgment clarifies that the specific modes of recovery provided in the 1961 Act for income-tax dues exclude the applicability of the 1963 Act. The court's decision underscores the importance of adhering to the prescribed procedure for recovery as outlined in the relevant statute to prevent any potential discrimination in the recovery process.