Judgement

Appeal (No. 62 of 1922) from an order of the High Court (October 21, 1920) discharging a rule nisi obtained by the appellants for an order under s. 45 of the Specific Relief Act (I. of 1877).

Law Rep. 50 Ind. App. 227 ( 1922- 1923) Adcock, Ashdown and C o. Ltd v. C hief Revenue-Authority

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The appellants were assessed by the collector of income tax to excess profits duty for the accounting period of twelve months ending on December 31, 1918, at Rs.8,79,582. For the purpose of the assessment they had elected to have the standard profits of the business ascertained under s. 6, sub-s. 1 (b) (iii.), of the Excess Profits Duty Act (X. of 1919). They applied to the Chief Revenue-authority to discharge the assessment under s. 23 of the Indian Income Tax Act (VII. of 1918), as applied by s. 15 of the Excess Profits Duty Act, 1919, on the ground that a deduction ought to have been made in accordance with the first proviso to s. 6, sub-s. 1 (6), of the Excess Profits Duty Act, 1919, in computing the profits chargeable on account of an increase of average capital employed in the business at the end of the accounting period, or in the alternative to state a case for the opinion of the High Court under s. 51 of the Income Tax Act, 1918, as applied to excess profits duty by s. 15 of the Excess Profits Duty Act, 1919. The circumstances in which the appellants claimed the deduction appear from the judgment of the Judicial Committee.

The Chief Revenue-authority rejected the application to discharge the assessment, and declined to state a case as in his view the Act of 1919 was clear and a reference unnecessary.

The appellants applied to the High Court by petition praying under s. 45 of the Specific Relief Act, 1877, that the Chief Revenue-authority might be ordered under the enactments above mentioned to state a case and refer to the Court the following question—namely " whether the cash and investments on December 31, 1918, should be taken into consideration for purposes of excess profits duty " ; alternatively they prayed that the Chief Revenue-authority should be ordered to hear and determine their application to him to refer the said question.

The High Court granted a rule, which was subsequently argued before a Division Bench (Macleod

C.J. and Fawcett J.). On October 21, 1920, the learned judges delivered judgment discharging the rule on the ground that the question was one of fact. The proceedings are reported at I. L. R. 45 B. 881 under the title In re Excess Profits Duty Act,

1923. May 4, 7. Clauson K.C., Latter K.C. and Cyril King for the appellants. The High Court had jurisdiction to make an order in the nature of a mandamus under s. 45 of the Specific Relief Act, 1877, since there was a statutory duty upon the respondent under s. 51 of the Indian Income Tax Act, 1918. The question was not one of fact, but of the true construction of the Excess Profits Duty Act, 1918. The appellants under their memorandum of association had power to invest surplus capital. Sums so invested were capital "employed in the business" within the meaning of s. 6 of the Excess Profits Duty Act, 1919. That Act differs materially from the English Acts dealing with excess profits duty see Finance (No. 2) Act (5 & 6 Geo. 5, c. 89), Sch. IV. [They were stopped.]

Dunne K.C. and Reginald Hills for the respondent. The High Court had no jurisdiction to issue any proceedings in the matter having regard to s. 106, sub-s. 2, of the Government of India Act, 1915, which excludes jurisdiction " in any matter concerning the revenue " Spooner v. Juddow (( 1850) 4 Moo. I. A. 353.) ; Chief Commissioner of Income Tax v. North Anantapur Gold Mines. (( 1921) I. L.

R. 44 M. 718.) Sect. 52 of the Indian Income Tax Act, 1918, supports the view that there was no jurisdiction. Further, s. 51, sub-s. 1, of that Act does not cast a duty upon the Revenue-authority to state a case upon application, but gives him a discretion in the matter. The language of the sub-section exclud