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HIGH COURT OF CALCUTTA
R. S. Bachawat, P. Chatterjee
N. C. MUKHERJEE - Appellant
Versus
UNION OF INDIA (UOI) - Respondent
Civil Revn. Case 4586 Of 1960
Decided On : SEPTEMBER 26, 1962
PUBLIC DEMANDS RECOVERY ACT - CERTIFICATE - VALIDITY - FORM - NOTICE - VALIDITY - BENGAL PUBLIC DEMANDS RECOVERY ACT, 1913 - SECTIONS 4, 6, 7, 39, 48, 49, 50, 51, 53, 54, 56, 57 - WEST BENGAL ACT XI OF 1961 - CONSTITUTION OF INDIA, ARTICLES 227, 248, 254(2) - LISTS IN SCHEDULE VII - ENTRIES 3, 43, 45, 97 - INTERPRETATION.
Fact of the Case:
The petitioner firm sought to quash and set aside all proceedings in certificate cases for recovery of excess profits tax assessed on the petitioner firm for the chargeable accounting periods ending March 31, 1942, March 31, 1943, March 31, 1944 and March 31, 1946. The certificates were issued under Section 4 of the Bengal Public Demands Recovery Act, 1913. The petitioner contended that the assessments of excess profits tax were made unlawfully upon the partners of the petitioner firm in the firm name and that the assessments made and the notices of demand served on the petitioner firm and the certificates issued against them were invalid. The petitioner also contended that the certificates were invalid because they did not specify (a) the dates of commencement of the chargeable accounting periods and (b) the Income-tax on the basis of which the excess profits tax was assessed. Further, the petitioner contended that the Bengal Public Demands Recovery Act, 1913 and West Bengal Act XI of 1961 were laws with respect to Entry 43 of the Concurrent List of the Constitution and that consequently West Bengal Act XI of 1961 was invalid because (a) the assent of the President to the passing of the Act had not been obtained under Article 254 (2) of the Constitution and alternatively because (b) the State Legislature was not competent to make the law.
Finding of the Court:
The Court held that the assessments of excess profits tax were lawfully made upon the partners of the petitioner firm in their firm name. The Court also held that the certificates were not invalid because they did not specify (a) the dates of commencement of the chargeable accounting periods and (b) the Income-tax on the basis of which the excess profits tax was assessed. Further, the Court held that the Bengal Public Demands Recovery Act, 1913 and West Bengal Act XI of 1961 were not laws with respect to Entry 43 of the Concurrent List of the Constitution and that consequently West Bengal Act XI of 1961 was valid.
Issues: 1. Whether the assessments of excess profits tax were lawfully made upon the partners of the petitioner firm in the firm name? 2. Whether the certificates were invalid because they did not specify (a) the dates of commencement of the chargeable accounting periods and (b) the Income-tax on the basis of which the excess profits tax was assessed? 3. Whether the Bengal Public Demands Recovery Act, 1913 and West Bengal Act XI of 1961 were laws with respect to Entry 43 of the Concurrent List of the Constitution? 4. Whether West Bengal Act XI of 1961 was invalid because (a) the assent of the President to the passing of the Act had not been obtained under Article 254 (2) of the Constitution and alternatively because (b) the State Legislature was not competent to make the law?
Ratio Decidendi: 1. The Court held that the assessments of excess profits tax were lawfully made upon the partners of the petitioner firm in their firm name because Section 14 (3) of the Excess Profits Tax Act, 1940 provided that "where two or more persons were carrying on the business jointly in the chargeable accounting period. . . . . . the assessment shall be made upon them jointly and, in the case of a partnership, may be made in the partnership name." 2. The Court held that the certificates were not invalid because they did not specify (a) the dates of commencement of the chargeable accounting periods and (b) the Income-tax on the basis of which the excess profits tax was assessed because the public demands were sufficiently identified in the certificates and it was not necessary to give any further particulars of the demand in the fourth column. 3. The Court held that the Bengal Public Demands Recovery Act, 1913 and West Bengal Act XI of 1961 were not laws with respect to Entry 43 of the Concurrent List of the Constitution because the Bengal Public Demands Recovery Act, 1913 was not a law with respect to recovery in the State of West Bengal of claims regarding public demands arising outside that State. 4. The Court held that West Bengal Act XI of 1961 was valid because it was a law with respect to (a) land revenue, including assessment and collection of revenue and (b) administration of justice, constitution and organisation of Revenue Court and procedure in Revenue Court enumerated in entries 3 and 45 of the State List.
Final Decision: The Court discharged the rule and held that there would be no order as to costs.
( 1 ) IN these rules the petitioner firm seeks orders quashing and setting aside all proceedings in certificate cases Nos. 158, I. T. (C) of 1955-56, 159 I. T. (C) of 1955-56, 160 I. T. (C) of 1955-56 and 161 I. T. (C) of 1955-56 in respect of four certificates all dated March 29, 1956, signed by the certificate officer, 24-Parganas and filed in his office under Section 4 of the Bengal Public Demands Recovery Act, 1913 for recovery of the public demands due to the Union of India from the petitioner firm on account of excess profits tax assessed on the petitioner firm for the chargeable accounting periods ending March 31, 1942, March 31, 1943, March 31, 1944 and March 31, 1946. By his orders dated March 29, 1956 the certificate officer directed the entry of the certificates in Register X and the issue of notices under Section 7 of the Act. Notices under Section 7 dated April 16, 1956 were issued and served on the petitioner but upon objection filed under Section 9 the certificate officer by his orders dated December 20, 1956 directed the issue and service of fresh notices under Section 7. Fresh notices dated December 20, 1956 were issued and served on the petitioner. Thereupon the petitioner filed under Section 9 of the Act fresh petitions of objections dated January 27, 1957 and supplementary objections dated February 4, 1957. The certificate officer, Shri D. S. P. Mukherjee dismissed the objections by his order dated January 8, 1958. Appeals preferred by the petitioner under Section 51 were dismissed by the Commissioner, Presidency Division, by his order dated April 18, 1958 and revision petitions preferred by the petitioner under Section 53 were dismissed by the Board of Revenue by its order dated April 21, 1960. The petitioner obtained the present rules on November 28, 1960.
( 2 ) ON behalf of the petitioner it is contended that Shri D. S. P. Mukherjee had no power to hear and dispose of the petition under Section 9 as he was not the successor in office of Shri B. K. Banerjee before whom the petition had been filed. This contention was raised for the first time before the Board of Revenue and the Board rightly rejected the contention on the ground that the plea involved new questions of fact and could not be entertained for the first time in revision.
( 3 ) THE assessments of the excess profits tax were made by the Excess Profits Tax Officer on the partners of the petitioner firm in the firm name and consequently the petitioner firm is shown as the certificate debtor in the certificates issued under Section 4 of the Bengal Public Demands Recovery Act, 1913. On behalf of the petitioner it is contended that the assessments Of excess profits tax could not lawfully be made upon the partners of the petitioner firm in the firm name and that the assessments made and the notices of demand served on the petitioner firm and the certificates issued against them are invalid. There is no substance in this contention. Section 4 of the Excess Profits Tax Act, 1940 charged excess profits tax in respect of any business to which the Act applied. Section 13 provided for issue of notice for assessment upon any person engaged in the business. Sub-section (1) of Section 14 provided for assessment of the tax. Sub-section (2) of Section 14 provided that the tax payable in respect of any chargeable accounting period would be payable by the person carrying on the business in that period. Subsection (3) of Section 14 provided that"where two or more persons were carrying on the business jointly in the chargeable accounting period. " the assessment shall be made upon them jointly and, in the case of a partnership, may be made in the partnership name. "the assessment of the excess profits tax could therefore be lawfully made upon the partners of the petitioner firm in their firm name. Section 21 of the Excess Profits Tax Act, 1940 provided inter alia that Sections 29, 45 and 46 of the Indian Income Tax Act, 1922 would apply with such mod
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