Judgment

VENKATARAMIAH, J.:- This appeal by certificate under Article 133 of the Constitution arises out of a writ petition filed by the appellants under Article 226 of the Constitution of India before the High Court of Calcutta. The appellants are partners of a firm of Solicitors known as M/s. Orr. Dignam & Co., having its office at Calcutta. The appellants acted as the Solicitors of a German Corporation known as Ferbwerke Hoechst Aktiengesellschaft Vormals Meister Lucius & Burning (a Corporation organised under the law of Federal Republic of Germany) (hereinafter referred to as the German Corporation) in two suits filed on the Original Side of the Calcutta High Court - one Suit No. 511 of 1962 filed by the Bengal Chemical and Pharmaceutical Works Ltd. against the German Corporation and another Suit No. 1124 of 1962 filed by the German Corporation against the Bengal Chemical and Pharmaceutical Works Ltd. on the alleged infringement of a patent. The appellants were instructed by a firm of Solicitors in London namely M/s. Ashurst, Morris, Crisp and Co. (hereinafter referred to as the London Solicitors) who were also acting for the German Corporation by a cable dated May 31, 1965 to retain in the said suits Mr. Blanco White Q. C., a resident of the United Kingdom, who was a barrister having considerable practice in the branch of patent law. On his arrival in India, the appellants accordingly retained Mr. Blanco White as the counsel to argue the case of their clients - the German Corporation even though they did not deliver any briefs to him and also did not pay or undertake any obligation to pay any fees for his services. The briefs had been earlier delivered by the London Solicitors. It is stated that they did not know as to how much amount was payable to him by the London Solicitors by way of fees. The hearing of one of the said two suits lasted for thirteen days commencing from January 27, 1970 and was concluded on February 16, 1970. Mr. Blanco White left India on February 17, 1970, after the hearing was over without making any arrangement regarding the payment of income -tax on the fees earned by him by arguing the case of the German Corporation. Thereafter on February 19, 1970, the appellants received a notice from the Income-tax Officer, A Ward, Foreign Section asking them to furnish information about the fees earned in India by Mr. Blanco White as counsel engaged by them to argue the case of their clients i. e., the German Corporation and also drawing their attention to the liability arising under Section 195 (2) of the Income-tax Act, 1961 (hereinafter referred to as the Act) which required them to deduct the tax payable under the Act at source on payments made to a non-resident. The appellants sent a reply to that letter on February 24, 1970, starting that Mr. Blanco White had been engaged by the London Solicitors of the German Corporation to appear before the Calcutta High Court on behalf of the German Corporation and that they had neither briefed him nor had they incurred any liability to pay him any fees. They, therefore, denied their liability under Section 195 (2) of the Act. Incidentally it may be stated here that the appellants referred to one other, suit i. e. Suit No. 422 of 1963, on the file of the Calcutta High Court filed by the German Corporation against Albert David Ltd., in which also Mr. Blanco White had been engaged for the German Corporation. Thereupon by a letter dated February 27, 1970, the Income-tax Officer informed the appellants that he proposed to proceed against them under Section 163 (1) of the Act treating them as the agents of Mr. Blanco White on the ground that the income in question had arisen on account of the business connection that existed between the appellants and Mr. Blanco White. To this, the appellants sent a long reply dated March 10/11, 1970, denying their liability to be proceeded against under See. 163 (1) of the Act. In the course of the said reply, the appellants contended in