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1969 Supreme(Ker) 165
Judges : P.T.RAMAN NAYAR,K.K.MATHEW
ISHA BEEVI - Appellant
Versus
TAX RECOVERY OFFICER, QUILON - Respondent
Case No : W. A. No. 495, 497, 498, 499, 500, 501, 502, 503, 504, 505 of 1969 from 0. P. No. 2265, 2269, 2280, 2271, 2274, 2281, 2272, 2268, 2275, 2273, 2267, 2266, 2277 of 1968
Decided On : 09/30/1969
Advocates Appeared :
K. V. Suryanarayana Iyer; V. K. K. Menon; N. Palpu; M. Ramachandran; C. J. Balakrishnan; For Appellants Mishra; P. K. Krishnankutty Menon; For Respondents
The main legal point established in the judgment is that the Tax Recovery Officer had the authority to recover arrears under the Travancore Income-tax Act, even if the order of attachment was passed under the wrong provision of law. The court also affirmed the validity of certificates issued after the death of Thangal Kunju Musaliar and upheld the Revenue's entitlement to proceed as if the properties belonged to Thangal Kunju Musaliar on the date of his death.
Headnote:
Income-tax - Recovery of Arrears - Travancore Income-tax Act, 1121 - Indian Income-tax Act, 1922 - S.13 of Indian Finance Act, 1950 - S.46(2) of Income-tax Act, 1922 - S.221 of Income-tax Act, 1961 - Ext. D1 order - S.3 of Central Act 33 of 1950 - R.48 of the second schedule to the Income-tax Act, 1961 - R.85 of the second schedule to the Income-tax Act, 1961 - S.66(3) of the Travancore Income-tax Act - Ext. D2 settlement - Attachment of Immovable Property - Validity of Certificates - Gift Deeds - Alternative Remedy - Disputed Questions of Fact
Fact of the Case:
The appellants, wives and children of Thangal Kunju Musaliar, challenged the validity of an order attaching immovable properties to recover arrears of income-tax due under the Travancore Income-tax Act and the Indian Income-tax Act, 1922. They contended that the attachment was invalid as it was made under the wrong provision of law and that some certificates were issued after the death of Thangal Kunju Musaliar, making them invalid. They also argued that the properties had been gifted to them and therefore could not be attached.
Finding of the Court:
The court overruled the contentions, stating that the Tax Recovery Officer had the authority to recover arrears under the Travancore Income-tax Act, even if the order of attachment was passed under the wrong provision of law. The court also held that the certificates issued after the death of Thangal Kunju Musaliar were valid and that the Revenue could proceed to recover the arrears. The court further held that the Revenue was entitled to proceed as if the properties belonged to Thangal Kunju Musaliar on the date of his death.
Issues: Validity of attachment under the wrong provision of law, validity of certificates issued after the death of Thangal Kunju Musaliar, and the entitlement of the Revenue to proceed as if the properties belonged to Thangal Kunju Musaliar on the date of his death.
Ratio Decidendi: The court held that the Tax Recovery Officer had the authority to recover arrears under the Travancore Income-tax Act, even if the order of attachment was passed under the wrong provision of law. The court also held that the certificates issued after the death of Thangal Kunju Musaliar were valid and that the Revenue could proceed to recover the arrears. Additionally, the court held that the Revenue was entitled to proceed as if the properties belonged to Thangal Kunju Musaliar on the date of his death.
Final Decision: The court declared that the claim enforceable under the attachment would not include the arrears of income-tax specified in the certificates issued after the death of Thangal Kunju Musaliar. The court dismissed the writ appeals, stating that the appellants had an effective alternative remedy and that the claim involved resolution of disputed questions of facts.
1. The appellants are the wives and children of one Thangal Kunju Musaliar, who died on 19 21966. At the time of his death, he was in arrears of income-tax, due both under the Travancore Income-tax, Act, 1121, and the Indian Income-tax Act, 1922. By an order passed on 10 61968 (marked as Ext. P1 in all the writ petitions), the Additional Personal Assistant to the District Collector, Quilon, functioning as Tax Recovery Officer, attached the immovable properties scheduled to the order, by prohibiting the appellants from transferring or otherwise dealing with them under R.48 of the second schedule to the Income-tax Act, 1961, on the basis of 22 certificates covering a total amount of Rs. 50,42,970.34. Some of the certificates were issued under S.46 (2) of the Income-tax Act, 1922, and the others under S.221 (1) of the Income-tax Act, 1961.
2. Thangal Kunju Musaliar had before his death executed gift deeds of immovable properties in 1947, 1953,1954 and 1956 in favour of his wives and children. He had also executed a mortgage Ext. D4 on 17 3 1957 in favour of the Governor of the State of Kerala, for 20 lakhs rupees in consideration of the State Government guaranteeing an overdraft accommodation for the amount by the Central Bank of India in order to enable him to re-open his factories which were closed at the time.
3. By the writ petitions in question the appellants challenged the validity of Ext. P1 order and prayed for an appropriate direction or order quashing the order, and restraining the respondents from proceeding further on the basis of the attachment.
4. The main contentions in the writ petitions were: (1) that the attachment was for recovery of arrears of income-tax due from Thangal Kunju Musaliar both under the Travancore Income-tax Act and the Indian Income-tax Act, 1922, that so far as the arrears due under the Travancore Income-tax Act were concerned, they could be recovered only under the provisions of that Act, and therefore, the proceedings for attachment under the Indian Income-tax Act, 1961, for recovery of the arrears due under the Travancore Income-tax Act are bad; (2) that out of the 22 certificates, 11 were issued only after the death of Thangal Kunju Musaliar, mentioning him as the assessee, and therefore, they were invalid as neither S.66 (3) of the Travancore Income-tax Act, nor S.221 of the Indian Income-tax Act, 1961, authorised the issue of certificates in the name of the assessee after his death, and that as the amounts covered by these certificates have been tacked on to the amounts covered by the other certificates, the attachment was invalid in entirety; and (3) that by the gift deeds executed by Musaliar in favour of his wives and children, the title to the properties comprised in them passed to the donees, and therefore, the Revenue cannot attach the properties as if they belonged to Thangal Kunju Musaliar on the date of his death.
5. The learned judge over-ruled all these contentions. He said that although the order of attachment was passed under R.48 of the second schedule to the Income-tax Act, 1961, the officer had authority also to proceed under the Travancore Income tax Act to recover the arrears due under that Act by resorting to the Travancore-Cochin Revenue Recovery Act, and the fact that he purported to act under a wrong provision of law for recovery of those arrears would not affect his jurisdiction. In other words, the learned judge said that although the Tax Recovery Officer referred to the wrong provision of law for the recovery of the arrears due under the Travancore Income-tax Act, as he had authority to recover the amount, it is merely a case of citing a wrong provision of law for exercising an authority which the officer had. He was also of opinion that the arrears of income-tax due for the years 1119 and 1120 M.E. being covered by Ext. D1. an order made under S.3 of Central Act 33 of 1950, and that order having authorised the Revenue to resort to the provisions of the Tr
