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TMI Blog1969 (7) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... pay any money which subsequently became due from you to him/them or which you may subsequently hold for or on account of him/them up to the amount of arrears still remaining unpaid, forthwith on the money becoming due or being held by you as aforesaid as such payment is required to meet the amount due by the taxpayer in respect of arrears of income-tax/super-tax/penalty/interest/fine, I am to say that any payment made by you in compliance with this notice is in law deemed to have been under the authority of the taxpayer and my receipt will constitute a good and sufficient discharge of your liability to the person to the extent of the amount referred to in the receipt " The principal contention urged by Mr. Sankar Ghosh appearing on behalf of the petitioner is that the money which is due or may become due from the Coal Board to the petitioner-company is by way of assistance for certain specific purposes. The Coal Board is a statutory authority set up under the provisions of the Coal Mines (Conservation and Safety) Act, 1952. The powers of the Board to utilise the money received by it are limited by the provisions of the above Act. It has no power to utilise the money for any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coal or washing coal which is required to be undertaken by an order under rule 36 or 37; (d) for the following measures voluntarily undertaken by the owner, agent or manager of the coal mine: (i) stowing operations in the interest of safety or conservation of coal, (ii) any process of washing or cleaning coal which reduces its ash content and also improves its qualities, or (iii) any other measures for safety in coal mines or for conservation of coal, (e) for any other measures undertaken by the owner, agent or manager of a coal mine under the order of the Board to ensure conservation of coal. (2) The Board may grant assistance to the owner of any steel work, blast furnace or coke plant for blending of coal undertaken under the orders of the Board. (3) The Board may grant assistance to the owner, agent or manager of a coal mine which is specially handicapped by adverse factors rendering its working uneconomic but which, in the opinion of the Central Government, should be maintained in production for the purposes of ensuring the conservation of coal. In such cases assistance shall be granted by the Board (i) with due regard to the circumstances of each case ; (ii) only in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions. Mr. Gouri Mitter, appearing on behalf of the revenue, raised the contention at the initial stage of the hearing that there was no material before the court to show that any such condition had been attached to the grant in the present case. On the basis of the pleadings before me, Mr. Mitter sought to argue that once the money was granted to the allottee, viz., the petitioner, it was free to utilise the money in any manner it liked. In other words, the grant was not imprest with any particular purpose or purposes. Considering the state of the materials before me on this aspect of the matter, I granted leave to the petitioner to file a further affidavit in these proceedings disclosing the nature of the grant from the Coal Board to the petitioner and also whether any conditions were attached to such grant. Pursuant to the leave granted by me, an affidavit has been affirmed on behalf of the petitioner-company by Ram Avatar Jalan on 13th November, 1968. From the said affidavit it appears that the usual procedure is for the petitioner-company to make an application before the beginning of the financial year for monetary assistance from the Coal Board towards the stowing in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avis v. Freethy. In that case, following the decision in In re General Horticultural Company : Ex Parte Whitehouse , it was held that under an attachment order, the garnishee would be liable to hand over so much of the property which the judgment-debtor could honestly deal with without interfering with the interests of third parties. Relying on the above decision, Mr. Ghosh contended that in the present case, since the assistance from the Coal Board was received for particular purpose, the petitioner who stands in a position comparable to that of a judgment-debtor under the general law, was not free to pay any part of such assistance towards the discharge of his income-tax liabilities. Such a payment would inevitably lead to a breach of the conditions which have been attached to the grant of assistance and which have been accepted by the petitioner-company. Since the petitioner-company itself could not pay any part of this money to the income-tax department, Mr. Ghose contended that revenue could not stand in a better position with regard to the Coal Board whose position is comparable to that of a garnishee under the general law. Consequently, the income-tax department could not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Officer alleged that the aforesaid payment of Rs. 20 000 made to Baliah was in violation of the first notice issued on June 18, 1959, and called upon the firm to pay the sum of Rs. 20,000 to the income-tax department. The firm of Buddha Pictures applied before the Madras High Court for a writ of mandamus directing the income-tax department to forbear from collecting the sum of Rs. 20,000 paid to Baliah after the first notice. Dealing with the contention that the demand for payment of Rs. 20,000 by the income-tax department from Buddha Pictures was not sustainable, Jagadisan J. observed as follows : " The debate before us has very largely centered upon the proper interpretation of the words 'any person from whom money is due or may become due to the assessee.' It is common ground in the present case that the petitioner was not holding and did not subsequently hold money for or on account of the assessee. Now what does the expression 'may become due' mean ? Can it be understood as money which would become payable by the garnishee to the assessee in future after the service of the notice as a result of a, pre-existing liability, or, would it also cover a case where the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not hold that the legislature speaking through the language of the enactment says something but means a different thing. But if, however, the statutory provision is indefinite or obscure, the legislative intent has to be ascertained by resorting to various aids. Where a literal meaning leads to absurdity or contradiction, the spirit prevails over the letter. In such cases the presumption is that the legislature did not intend to lay down a measure which is oppressive and unreasonable to an uncommon degree. We would, therefore, prefer the view that the words 'may become due' mean 'may become payable' and not 'may become entitled'. This would be a just and fair interpretation, harmonious with the scheme of collection of tax." My attention was next drawn to a decision of the Supreme Court on appeal from the above decision of the Madras High Court in the case of Income-tax Officer, Madras v. Buddha Pictures. At page 623 of the report Sikri J. observed as follows : " The learned counsel for the appellant contends that section 46(5A) applies in four sets of circumstances : (1) when money is due from a person to the assessee ; (2) when money may become due to the assessee ; (3) when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployers or traders. This would cast enormous burden on persons receiving such notices. We cannot sustain a construction which could lead to such results. We agree with the conclusion arrived at by the High Court." Relying on the above two decisions, Mr. Ghosh contended that although the words of section 46(5A) of the repealed Act which, I have said, corresponds to section 226(3) of the Act, are of the widest amplitude, the courts have cut down the plain meaning of the words on the ground that any other construction would deprive the parties of their ordinary private rights and would destroy such rights by a side wind. According to this contention, where giving a literal meaning to the words employed in a fiscal statute, would lead to an absurdity of construction or destruction of private rights or rights of third parties. I should adopt the same approach as was adopted by the Madras High Court and the Supreme Court and hold that although the money payable by the Coal Board may come within the literal meaning of the words " money is due " or " may become due " to the assessee, those words should be given a restricted meaning in the facts and circumstances of the present case. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amily ; (b) in the case of a local authority or, company, to the principal officer thereof ; (c) in the case of any other association or body of individuals, to the principal officer or any member thereof ; (d) in the case of any other person (not being an individual), to the person who manages or controls his affairs. Mr. Mitter, on behalf of the revenue, contended that this was a case which came under section 282(2)(d) and the Coal Board was "any other person " within the meaning of that sub-section. According to Mr. Mitter, since the notice was addressed to the Secretary who is a person, who manages or controls the affairs of the Board, the mode of address of the impugned notice should be held to be in compliance with the provisions of section 282(2)(d) of the Act. In my view this contention of Mr. Mitter should be accepted. It appears from rule 13(2) of the Coal Mines (Conservation and Safety) Rules, 1954, that the Secretary of the Coal Board is a principal executive officer of the Board. That being so, it must be held that he is a person who manages and controls the affairs of the Board subject to the direction of the Chairman of the Board. As such, the notice addressed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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