PETER ELIZABETH v. AITO, ALLEPPEY — 1970 DIGILAW 39 (KER)

Judgment :- 1. The question raised by the widow of a deceased assessee under the Agricultural Income Tax Act, 1950 (hereinafter referred to as the Act) is whether a notice Ext. P1 issued by the second respondent, the Deputy Tahsildar of Revenue Recovery, Sherthallai under S.7 of the Travancore-Cochin Revenue Recovery Act, 1951 to her is incompetent or not. After the death of the original assessee, George Peter, who it is admitted was a defaulter as envisaged by S.30 of the Act, no notice was issued to the petitioner, the widow of George Peter under S.30 of the Act, and therefore it is contended that the petitioner is not a defaulter. Consequently it is urged that no certificate could have been issued under S.41 (3) of the Act to the Revenue Recovery Officer for recovery from the petitioner of the tax due from the said George Peter. 2. George Peter was assessed on 12-12-1963 for the assessment year 1963-64. A notice under S.30 of the Act was admittedly issued to him. He did not pay the tax. He died on 3-4-1967. Thereafter no notice under S.30 of the Act was issued to the petitioner. But Ext. P1 Revenue Recovery Notice dated 29-1-1968 was issued to the petitioner as well as the other heirs of George Peter stating that the properties mentioned in the notice will be proceeded against for recovery of the tax. A certificate dated 26-6-1964 had been issued to the second respondent stating that a sum of Rs. 776-79 was due from the said George Peter. After his death another certificate dated 1611968 was issued to the second respondent stating that the identical amount was due from the petitioner, the widow of the said George Peter and the other legal heirs, seven in number, mentioned in that certificate. 3. In order to answer the questions raised by counsel, it is necessary to refer to the definition of the term assessee' in the Act in S.2 (d) as well as S.24, 30 and 41. I shall extract the definition as well as the sections. "2 (d) 'Assessed means a person by whom Agricultural Income-tax is payable;" "24. Tax of deceased person payable by representative. I shall extract the definition as well as the sections. "2 (d) 'Assessed means a person by whom Agricultural Income-tax is payable;" "24. Tax of deceased person payable by representative. (1) Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person, to the extent to which the estate is capable of meeting the charge the agricultural income-tax assessed as payable by such person or any agricultural income tax which would have been payable by him under this Act if he had not died. (2) Where a person dies before the 1st June in any year or before he is served with a notice under sub-section (2) of S.17 or under S.35, as the case may be, his executor, administrator or other legal representative shall, on the serving of the notice under Subsection (2) of S.17 or under S.35, as the case may be, comply therewith, and the Agricultural income-tax Officer may proceed to assess the total agricultural income of the deceased person as if such executor, administrator or other legal representative were the assessee. (3) Where a person dies without having furnished a return which he has been required to furnish under S.17, or having furnished a return which the Agricultural Income-tax Officer has reason to believe to be incorrect or incomplete, such officer may make an assessment of the total agricultural income of such person and determine the agricultural income-tax payable by him on the basis of such assessment, and for this purpose may. by the issue of the appropriate notice which would have had to be served upon the deceased person bad he survived, require from the executor, administrator or other legal representative of the deceased person any accounts, documents or other evidence which he might under S 17 or S.18 have required from the deceased person." "41. Mode and time of recovery: (1) When an assessee is in default in making a payment of agricultural income-tax, the Agricultural Income-tax Officer may in his discretion direct that, in addition to the amount of the arrears, a sum not exceeding that amount shall be recovered from the assessee by way of penalty. Mode and time of recovery: (1) When an assessee is in default in making a payment of agricultural income-tax, the Agricultural Income-tax Officer may in his discretion direct that, in addition to the amount of the arrears, a sum not exceeding that amount shall be recovered from the assessee by way of penalty. (2) For the purposes of sub-section (1), the Agricultural Income-tax Officer may direct the recovery of any sum less than the amount of the arrears and may enhance the sum so directed to be recovered from time to time in the case of the continuing default, so however that the total sum so directed to be recovered shall not exceed the amount of the arrears payable. (3) The Agricultural Income-tax Officer may forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee and the Collector on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue: Provided that without prejudice to any other powers of the Collector in this behalf, he shall for the purpose of recovering the said amount have the powers which under the Travancore or Cochin Code of Civil Procedure a Civil Court has for the purpose of the recovery of an amount due under a decree. (4) No proceeding for the recovery of any sum payable under this Act shall be commenced after the expiration of three years from the latest day fixed for payment in the notice of demand served under S.30 or where the assessee has been treated as not being in default under the proviso to S.40 pending his appeal, after the expiration of three years from the date on which the appeal is decided." 4. The petitioner has a case that she has not come by any estate of the deceased person and that therefore S.24 will have no application and she has no liability to pay the tax. This question cannot be resolved in these proceedings, and in the view I am taking which will be stated hereinafter will have to be decided by the Revenue Recovery Officer, the second respondent. 5. This question cannot be resolved in these proceedings, and in the view I am taking which will be stated hereinafter will have to be decided by the Revenue Recovery Officer, the second respondent. 5. Counsel for the petitioner has urged that though the petitioner is an assessee within the meaning of the definition in S.2 (2) already referred to, the petitioner is not an assessee in default and that it cannot be said that there is any arrears of tax due from the petitioner. He therefore urged that no certificate at all could have been issued for the recovery of any amount by way of arrears of tax from her and the second respondent has no jurisdiction to issue Ext. P1 notice. Reliance was placed on Kanga's Commentary to S.222 and 223 of the Income Tax Act, 1961, corresponding to S.46 of the Indian Income Tax Act, 1922 at page 938 and the rulings referred to therein. I do not think it is necessary to decide this question in this petition. 6. It is not urged by the Revenue that the petitioner is an "assessee in default". The argument is that S.41 (3) unlike S.41 (1) does not speak of an "assessee in default" but only of an assessee. Reliance was placed by counsel on the ruling of the Supreme Court in The III Income tax Officer, Mangalore v. M. Damodar Bhat reported in AIR. 1969 SC. 408 wherein, dealing with the interpretation of S.226 (3) of the Income-tax Act, 1961, the wording of which section is very similar to that of S.41 (3) of the Act, the Supreme Court held that the wording of S.226 (3) does not justify the contention that there should be "an assessee in default" before a notice under S.226 (3) of the Income-Tax Act, 1961, is issued to the debtor of the assessee. The court has also held that the amount was due though the period granted by the notice issued under S.156 of the Income-Tax Act, 1961, for payment of the tax had not expired when notice under S.226 (3) was issued to the debtor of the assessee. The notice was sustained. The court has also held that the amount was due though the period granted by the notice issued under S.156 of the Income-Tax Act, 1961, for payment of the tax had not expired when notice under S.226 (3) was issued to the debtor of the assessee. The notice was sustained. No point seems to have been made before the Supreme Court on the wording of S.226 (3) of the Income-Tax Act, 1961 which uses the words "to pay the amount due by the assessee in respect of arrears and there is no discussion in the judgment as to whether any amount could be said to be in arrears when the period stated in the notice of demand had not expired. The pronouncement seems to support counsel on behalf of the Revenue that S.41 (3) of the Act must be understood in the same manner as S.226 (3) of the Income-tax Act, 1961, as understood by the Supreme Court. 7. The proceedings contemplated by S.226 (3) of the Income-Tax Act, 1961 and by S.41 (3) of the Act are entirely different, and I, therefore, do not wish to pronounce on the question as to whether a certificate can be issued in the absence of a demand notice under S.30 of the Act or if there is one before the expiry of the period mentioned in that notice for payment of the money since S.41 (3) speaks of arrears. I leave this question open, for the case can be disposed of on another ground. 8. That ground is based on the contentions raised by counsel on behalf of the Revenue that the Collector by virtue of the proviso to S.41 (3) has the powers of a Civil Court and that therefore the Collector can take action against the legal representatives of an assessee in default. George Peter was admittedly an assessee in default. There was a valid certificate issued for the collection of arrears of tax from him dated 26 41964. After his death the Collector who will have the powers of a court under the Code of Civil Procedure can rely on S.52 (2) read with R.22 of 0.21 of the Code of Civil Procedure and can issue notice to the legal representatives of the assessee in default. After his death the Collector who will have the powers of a court under the Code of Civil Procedure can rely on S.52 (2) read with R.22 of 0.21 of the Code of Civil Procedure and can issue notice to the legal representatives of the assessee in default. The Civil Procedure Code being made applicable, it must apply mutatis mutandis and so it is not difficult to visualise that the legal representatives of an assessee in default can be proceeded against by virtue of the powers under S.52 (2) as well as R.22 of 0.21 of the Code of Civil Procedure. Counsel for the petitioner has brought to my notice R.12 of 0.22 and by virtue of this rule, it is unnecessary to bring any legal representatives on record. The only question then is whether there should be something in the nature of a fresh execution application in the form of a request from the Income-tax Officer to the Collector to proceed against the legal representatives of the original defaulter. I do not think this is necessary. In fact in the case in Sangheswar v. Income Tax Officer reported in AIR. 1969 SC. 668 a very similar question arose and Their Lordships of the Supreme Court held that by virtue of the powers which must be taken to be vested in the Collector under the proviso to S.46 (3) of the Indian Income Tax Act, 1922, the Collector can take steps for realisation of the arrears of tax due from an unregistered firm which was assessed under the Income-Tax Act from the partners of the firm at the relevant time. In that case there was no fresh request by the Income-tax Officer that the tax may be collected from the person who was a partner of the firm during the relevant period i. e. during the period the income was earned. Their Lordships relied on the provisions in R.50 of 0.21 of the Civil Procedure Code and this provision, it was ruled, was attracted by virtue of the proviso to S.46 (3) of the Indian Income-tax Act, 1922. 9. The second respondent herein had a valid certificate before him, the one dated 26 41964. The person mentioned therein had died and the petitioner is his widow. 9. The second respondent herein had a valid certificate before him, the one dated 26 41964. The person mentioned therein had died and the petitioner is his widow. If the petitioner is a legal representative of George Peter in the sense that she represents the estate to whatever extent it he of the deceased, then, she is liable by virtue of sub-section (2) of S.52 of the Civil Procedure Code read with the proviso to sub-section (3) of 41 of the Act. If the principle of the ruling in Sangheswar v. Income Tax Officer is made applicable the Collector is enabled to proceed against the petitioner. But there has been no notice under the Code of Civil Procedure as visualised by R.22 of 0.21 which is an imperative provision before proceeding against the legal representative. It is clear that there should be compliance with this provision. The notice Ext. P1 does not even purport to be one under the Civil Procedure Code. In fact it specifically is one under the Revenue Recovery Act and which is the certificate the Collector relied on before issuing Ext. P1; whether the one dated 26-4-1964 or the later certificate dated 16-1-1968 is not clear. But if an inference is possible, I am inclined to draw the inference that he must have relied on the latter certificate. Notwithstanding the above defects one of which atleast is vital counsel for the Revenue has suggested that the powers of the Collector on the admitted facts are undisputable. He submits that the notice Ext. P1 may be taken to be a notice under R.22 of 0.21 of the Civil Procedure Code entitling the petitioner to raise all objections which a legal representative could have raised when a decree is sought to be executed against the legal representative including the contention that he is not a legal representative and is therefore not liable to pay any amount as mentioned in Ext. P1 and that the matter may be allowed to be proceeded with on that basis. I am inclined to agree. After all the requirement of R.22 of 0.21, though mandatory is to enable the legal representatives sought to be proceeded against to raise all valid contentions regarding that he is not liable for the debt. P1 and that the matter may be allowed to be proceeded with on that basis. I am inclined to agree. After all the requirement of R.22 of 0.21, though mandatory is to enable the legal representatives sought to be proceeded against to raise all valid contentions regarding that he is not liable for the debt. As long as this requirement which is the substance of the rule is satisfied, I think, there will be no violation of any statutory provision, the principles of natural justice, nor can any injustice result from adopting such a course. 10. In the light of the above, I direct that the notice Ext. P1 will be considered as a notice under R.22 of 0.21 of the Civil Procedure Code and the petitioner will have a month's time from today to raise all her objections to the proposal to recover the amount from her. She will send her objections to reach the second respondent by registered post acknowledgment due on or before the 9th of March. If such an objection is taken, it will be duly considered during which process a reasonable opportunity will be given to the petitioner, and an order passed by the second respondent determining the question of liability, if any, of the petitioner for the amount mentioned in Ext. P1. Only after such an order is passed, coercive steps under the Revenue Recovery Act will be taken for recovery of the amount from the petitioner, in case it is found that she is liable. Such proceedings, if it is to be taken, will be commenced by a fresh notice under the Revenue Recovery Act. 11. This Original petition is ordered as above. I direct the parties to bear their respective costs.