UNION OF INDIA Vs. MALINA GHOSH
LAWS(CAL)-1983-11-4
HIGH COURT OF CALCUTTA
Decided on November 24,1983

UNION OF INDIA Appellant
VERSUS
MALINA GHOSH Respondents

JUDGEMENT

Ganendra Narayan Ray, J. - (1.) This rule was directed against Order No. 3008 dated May 27, 1981, passed by the District Judge, 24-Parganas, in O.S. No. 53 of 1944. It appears that large properties belonging to Shri S. K. Ghose (since deceased) were attached under the provisions of the Criminal Law Amendment Ordinance, 1944, for the purpose of realising a sum of rupees seventy-five lakhs on account of liability of the said Shri S. K. Ghose, who was convicted and sentenced for misappropriating a large sum of Government money in the discharge of his official duties. The District Judge became custodia legis of the said properties belonging to Shri S. K. Ghose, since deceased, and a receiver has been appointed for realising the income out of the said property for liquidating the said amount of rupees seventy-five lakhs out of the income of the said properties under attachment. It appears that in 1962, the Commissioner of Income-tax wanted to realise income-tax out of the estate of Shri S.K. Ghose under attachment but the then District Judge by his Order No. 678 dated August 3, 1962, held that under Sub-section (3) of Section 13 of the said Ordinance, the amount found in the final judgment should first be forefeited to His Majesty (now the Union of India) and after the recovery of the dues of Shri S. K. Ghose including the fine imposed upon him the order of attachment in respect of the said properties should be forthwith withdrawn. The Income-tax Department would, thereafter, proceed against those properties. The income-tax authorities subsequently also tried to realise income-tax out of the said properties and the matter came up before this court in Civil Rule No. 871(W) of 1979 and this court held that in view of the order dated August 3, 1962, passed by the then District Judge which was not set aside by any competent court, the successor-in-office could not ignore the same and he was hound to give effect to the said order and it was not necessary to decide the legality or otherwise of the said order passed on August 3, 1962. It appears that thereafter an application was made by Smt. Molina Ghose, the widow of Shri S. K. Ghose, for suitable order and/or direction on the income-tax authorities to refund all payments received by way of income-tax and/or wealth-tax out of the said properties. It appears that the income-tax authorities also contended that the receiver should be directed to file return out of the income received by the receiver in respect of the said properties under attachment as a representative of the assessee and no direction should be passed for refunding the amount already realised by the Income-tax Department.
(2.) The learned District Judge relying on the observation of this court made in Civil Rule No. 871(W) of 1979 has come to the conclusion that in view of the said judgment of this court, the Commissioner of Income-tax cannot claim any income-tax from the estate so long as it is under attachment. If the Commissioner of Income-tax tries to avoid the refund of the tax already realised or by applies dilatory tactics, the only course that will be left open to the said court is to pass an executable order in respect of the amounts paid by the present receiver after he assumed charge of the office in 1974 and to ascertain the total payments made by his predecessor-in-office.
(3.) Mr. Pal, the learned counsel appearing for the petitioner, has contended that in the said civil rule, this court referred to the order passed by the learned District Judge in August, 1962, and on that basis had held that in view of the said order of the District Judge which had not been set aside by any competent court, the said order must be held to be in force and the subsequent District Judge was not entitled to ignore the same but was bound to give effect to the said order. Mr. Pal contended that there was no occasion for the court to decide as to whether or not the receiver being representative of the assessee had any liability to pay income-tax out of the income received from the said properties. He contended that under the I.T. Act unless an assessee was specifically exempted from the payment of income-tax from the income derived from properties, he is bound to make payment of income-tax in accordance with the provisions of the I.T. Act and the rules framed thereunder. He contended that, under the Ordinance, the owner of the properties whose properties remain attached because of the liquidation of the debt or payment to be made under the provisions of the said Ordinance, has not been exempted from payment of any income-tax out of the income received from the said properties. He contended that although the properties remain under attachment under the Ordinance for the purpose of liquidating the debts, the ownership is not lost and if the debt is liquidated, the properties are required to be released from attachment. He, therefore, contended that it will be incorrect to contend that the owner of the said properties and/or the representative of the owner of the said properties cannot be assessed to any income-tax under the I.T. Act. Mr. Pal also contended that the proceeding under the I.T. Act is not a legal proceeding in a court of law and under the Ordinance, so long as the attachment continues, any proceeding in a court of law remains stayed, but not the proceeding before the income-tax authorities which is a proceeding before a tribunal and/or quasi-judicial authorities. Mr. Pal also contended that an adjudication under the I.T. Act in respect of a particular year cannot be held to be an adjudication for all subsequent years of assessment. The principle of res judicata is not applicable in the matter of subsequent assessment and the law is well settled in that regard. Mr. Pal, therefore, contended that the learned District Judge misconstrued the scope and import of the order passed by this court in the said civil court and also the order passed by his predecessor-in-office in August, 1962, and proceeded on an erroneous footing that the receiver has no liability whatsoever as the representative of the assessee to file returns and/or to make any payment of income-tax in respect of the income received from the properties under attachment. He also contended that once tax is paid on the basis of assessment made under the provisions of the I.T. Act, the same cannot be refunded except in accordadce with the provisions for refund under the said Act. But the learned District Judge has, in fact, held that the income-tax authorities must refund all payments received by way of income-tax paid on assessment, if necessary, by passing an executable order. Mr. Pal, therefore, contended that the said order is absolutely illegal and should be set aside.;


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