1971 (8) TMI 66 - HC - Income Tax

Recovery Proceedings certificate under section 46(2) - death of defaulter is there a need to amend the certificate showing the legal representatives as the assessee Held no held that revenue authorities were in order in proceeding with the recovery in pursuance of the certificate issued under section 46(2) of the Act and that there is no need to amend the certificate either by the income-tax authorities or by the Collector showing the legal representatives as the assessee

Issues Involved:
1. Maintainability of the suit against the Government for recovery of damages for malicious prosecution and for recovery of the value of the crop alleged to be stolen.
2. Whether the suit is barred under section 59 of the Madras Revenue Recovery Act.
3. Validity of the certificate issued by the Collector showing the deceased defaulter, Gengu Reddy, and its implications on the legal representatives or lessees.
4. Entitlement of the plaintiff to the damages claimed.

Detailed Analysis:

1. Maintainability of the Suit Against the Government:

The court analyzed the historical and constitutional context of the Government's liability in tort. It traced the evolution from the East India Company's dual status as a trading and sovereign entity to the current legal framework under the Constitution of India. The court referred to several landmark cases, including the Peninsular and Oriental Steam Navigation Company v. Secretary of State and State of Rajasthan v. Mst. Vidhyawati, which established the principle that the Government can be held liable for the tortious acts of its servants if such acts would render a private employer liable.

The court concluded that the suit for damages for malicious prosecution is maintainable. It emphasized that the negligence of the talayari, a government servant, in safeguarding the attached crops, leading to theft and subsequent wrongful prosecution of the plaintiff, falls within the ambit of actionable claims against the Government.

2. Barred Under Section 59 of the Madras Revenue Recovery Act:

Section 59 pertains to suits by persons aggrieved by proceedings taken under the Act, with a six-month limitation period. The court clarified that the present suit is not about the proceedings under the Act but for damages due to a criminal case filed against the plaintiff for theft of attached crops. The court cited Marukkolandayammal v. Secretary of State for India in Council and other precedents to establish that section 59 does not apply to the present case, as it is not about challenging the sale or attachment proceedings but about seeking redress for malicious prosecution.

3. Validity of the Certificate Issued by the Collector:

The court examined whether the Collector could proceed with recovery based on a certificate issued in the name of a deceased defaulter, Gengu Reddy. It referred to section 24B of the Income-tax Act, 1922, which makes legal representatives liable for the deceased's tax dues. The court held that the revenue authorities were correct in proceeding with the recovery without amending the certificate to include the legal representatives. It cited Supreme Court decisions, including Additional Income-tax Officer, Circle, Salem v. E. Alfred and First Additional Income-tax Officer, Karaikudi v. T. M. K. Abdul Kassim, to support the view that legal representatives are deemed assessees for recovery purposes.

4. Entitlement to Damages Claimed:

The court found that the revenue authorities acted within the law and there was no proof of malice. The attachment was validly made, and the authorities followed due process. Therefore, the plaintiff's claim for damages under various heads, including legal fees, loss of prestige, and the value of the stolen crops, was not sustainable. The court dismissed the appeal, concluding that the plaintiff failed to establish grounds for the damages claimed.

Conclusion:
The appeal was dismissed, with the court holding that the suit for damages for malicious prosecution is maintainable but not barred by section 59 of the Madras Revenue Recovery Act. The certificate issued in the name of the deceased defaulter was valid for recovery proceedings, and the plaintiff was not entitled to the damages claimed due to the absence of malice and lawful actions by the revenue authorities. No order as to costs was made.

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