Decided on December 24,1973

Vrajlal Chhaganlal Appellant
Shariff B A Cit Respondents


DIVAN,C.J. - (1.)THE same point of law arises in each of these special civil applications. The facts are also similar in each case and it will be convenient to dispose of the six special civil applications by this common judgment and that is why we deliver a common judgment in these matters. In order to indicate how the point of law arises, we will take up the facts in Special Civil Application No. 403 of 1972. The petitioner in this special civil application and each of the petitioners in the remaining petitions have been assessed as an individual under the Gift -tax Act, 1958. Each of the petitioners is a coparcener of a Hindu undivided family and he has his own Hindu undivided family consisting of himself, his wife and his children. Each of the petitioners in this group of special civil applications has thrown into the hotchpot of one or the other of the Hindu undivided family his self -acquired properties in the relevant assessment year and each of them purports to have thrown his self -acquired property into the common hotchpot of the Hindu undivided family with the intention of relinquishing his proprietary interest in the property thus thrown into the common hotchpot. These amounts of self -acquired property thrown into the common hotchpot have been treated by the Gift -tax Officer concerned at the relevant time as gifts made by the individual concerned to the Hindu undivided family. Each of these alleged gifts was made in the accounting period relevant to the assessment year 1964 -65. In Special Civil Application No. 405 of 1972, some more amounts were also thrown into the common hotchpot in the assessment year 1966 -67. In each of these six matters, at the time when the return for gift -tax purposes was filed, the learned advocate representing the petitioner concerned, had addressed a letter to the Gift -tax Officer in charge of the assessment pointing out that the Income -tax Appellate Tribunal, Hyderabad, had held in the case of Goli Eswariah v. Commissioner of Gift -tax that when a separate property of a coparcener becomes impressed with the character of coparcenery property, the act of the coparcener does not amount to a gift and hence no gift -tax is payable. He also pointed out that a similar view had been taken by the Income -tax Appellate Tribunal, Madras Bench, in P. Rangasami Naidu v. III Additional Gift -tax Officer, Madurai, and in view of these two decisions of the different Benches of the Income -tax Appellate Tribunal, the advocate submitted that no gift -tax was payable by the respective petitioners in this group of special civil applications but in order to show the bona fides of the petitioner concerned, each petitioner was filing his return for gift -tax purposes without prejudice, showing the taxable gift as nil. After these returns of gift -tax were filed, the Gift -tax Officer assessed the amount of tax on the footing that the amounts thrown into the common hotchpot were gifts. The letter addressed by the learned advocate in each of these six cases was in identical terms and the letter was dated June 23, 1964. The orders of the Gift -tax Officer were passed in due course some time in the month of February, 1966, so far as all the other matters were concerned and in Special Civil Application No. 405 of 1972, the order for assessment year 1964 -65 was passed on February 15, 1965, and the order for assessment year 1966 -67 was passed on July 21, 1966. Thereafter, the amounts if gift -tax were duly paid up by each of the different petitioners. On May 5, 1970, the Supreme Court delivered its judgment in Goli Eswariah v. Commissioner of Gift -tax. After the decision of the Supreme Court was received and became known, each of the petitioners in this group of special civil applications addressed a letter dated September 13, 1971, in identical terms. The letter was addressed by the learned advocate on behalf of these six petitioners and it was pointed out that the common point in the cases of these six petitioners was that each assessee voluntarily threw his self -acquired property into the common hotchpot of the Hindu undivided family and the transaction had been treated as a gift chargeable under the Gift -tax Act, 1958, and gift -tax was collected from each of these six petitioners. More than four years had already passed from the date the assessment order was made in each of the cases of the six petitioners. The letter also pointed out that in Goli Eswariah v. Commissioner of Gift -tax, the Supreme Court had held that impressing the character of joint Hindu family property on the self -acquired property owned by a coparcener did not amount to a transfer so as to attract the provisions of the Gift -tax Act, 1958. He said that the facts of the case of these six different petitioners in this group of special civil applications were identical and the ratio of the said Supreme Court judgment applied to their cases. Then the letter proceeded to submit :
'The effect of the decision of their Lordships of the Supreme Court is that the levy of Gift -tax on the property thrown into the hotchpot of the Hindu undivided family by a coparcener was, at no time, good. The levy was invalid and the orders made by the Gift -tax Officer were bad at there inception on the date they were made. In other words, the gift -tax collected from my clients is collected without the authority of law and they are entitled to get refund of the total amount so paid.'

(2.)A demand, on these submissions, was made in that letter that the Commissioner of Gift -tax might call for the gift -tax records of these different petitioners and on being satisfied about the genuineness of his submission, the Commissioner might direct the Gift -tax Officer to issue the necessary refunds.
To this letter of September 13, 1971, a reply was sent by the Commissioner of Income -tax who was also the Commissioner of Gift -tax stating that since no application for rectification was filed by these different petitioners, the request for granting the refund could not be entertained. The Commissioner appears to have treated the request contained in the letter of september 13, 1971, as a request for accepting rectification proceedings and the Commissioner pointed out in his letter dated December 12, 1971, that section 154 of the Income -tax Act imposed a time limit for filing of an application and the time limit prescribed by the statute had expired when the letter of September 13, 1971, was written. The Commissioner stated in his letter :

'The Supreme Court's interpretation makes the law as laid down by the Supreme Court operative from the date of enactment, since the interpretation of the Supreme Court is information, the department can act on receipt of an application in time for rectification to give effect to the state of the law as pronounced by the Supreme Court. But if the time limit has expired nothing can be done.'

(3.)AFTER receiving this letter from the Commissioner the petitioners have approached this court by these special civil applications and each of the petitioners had claimed that the relevant gift -tax order may be quashed and set aside and the amount of gift -tax paid by the respective petitioner should be directed to be refunded to him. In the alternative the petitioners have prayed that an appropriate direction, writ or order may be issued calling for the records of the case and, after satisfying itself as to the legality thereof, the High Court should quash and set aside the order passed by the Commissioner on December 12, 1971, and the High Court should direct the Commissioner to condone the delay, if any, in preferring revision applications and to hear the petitioners' revision applications on merits.

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