EAPEN E P Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) The writ petitioner was one of the partners of the firm ' Trivandrum Tobacco Corporation ' which was dissolved on 26th October 1953, and was one of the partners of the firm 'Trivandrum Tobacco Combines ' which discontinued its business in the year 1960. The 1st respondent is the Income Tax Officer, BWard, Trivandrum; the 2nd respondent the Tax Recovery Officer, Quilon; and the 3rd respondent the Sales Tax Officer, First Circle, Mattancherry. This petition under Art.226 of the Constitution of India is for quashing Ext. P1 notice of the 1st respondent dated 12th July 1976, Ext. P2 order dated 13th July 1976 of the 3rd respondent and the prohibitory order No. T.R. 358/69 dated 8th July 1976 issued by the 2nd respondent, referred to therein, and Ext. P4 prohibitory order of the 2nd respondent dated 29th July 1976. There is also a prayer for the issue of a writ of mandamus to compel the 3rd respondent to effect the refund in obedience of Ext. P1A order of the Government of Kerala dated 19th June 1976.

(2.) By Ext. P-1A [G.O. Rt. 494/76/TD, Taxes (C) Department, dated 19th June 1976] the Government of Kerala ordered the refund to the petitioner of a sum of Rs. 26,292.50 collected as sales tax from him for the period from 6th September 1955 to 31st December 1965 by M/s Imperial Tobacco Company, Coimbatore and paid over to the State Government; the Board of Revenue was directed to take necessary action for the refund of the amount. Thereafter the 1st respondent issued Ext. P-1 notice under S.226(3) of the Income tax Act, 1961 (Act 43 of 1961) dated 12th July 1976 prohibiting the 3rd respondent from making payments due to the petitioner for the reason that a sum of Rs. 35,951 was due from the petitioner, for M/s Trivandrum Tobacco Combines, Trivandrum, on account of income tax, penalty etc., and that amounts due to the petitioner from him had to be applied to satisfy the claims towards the arrears of tax. In and by Ext. P-2 order No. B-3030/75 dated 13th July 1976 the 3rd respondent informed the petitioner that in view of the 2nd respondent's prohibitory order No. T. R. 358/69 dated 8th July 1976 for Rs. 1,79,254.85 restraining her from making any payment of the amount due to him, she was not in a position to refund the sum of Rs. 26,292.50; the reference to the amount obviously being to the amount of sales tax collected from the petitioner, ordered to be refunded to him under Ext. P-1A order dated 19th June 1976 by the Government of Kerala.

(3.) The writ petition is seen to have been filed in court, with only Exts. P-1 to P-3, on 15th July 1976. Thereafter the 2nd respondent issued Ext. P-4 notice No. T.R. 358/69 dated 29th July 1976 informing the 3rd respondent that the 1st respondent had informed him that a sum of Rs. 35,714 and interest thereon was due from the petitioner for M/s Trivandrum Tobacco Combines and Trivandrum Tobacco Corporation, Trivandrum, and prohibiting and restraining her (3rd respondent) until farther orders, from making any payment to the petitioner from out of the amounts due to him from her, and the petitioner from receiving any such payments from the 3rd respondent. A copy of the prohibitory order marked Ext. P-4 was produced by the petitioner along with his reply affidavit dated 5th August 1976; and the original petition was got amended as per the order on C.M.P. 14505/76 dated 6th August 1976 whereby the petitioner, among other things, sought the additional relief of quashing Ext. P-4 order of the 2nd respondent. Respondents 1 and 2 have filed separate counter affidavits rebutting the grounds taken by the petitioner in the writ petition, and contending, inter alia, that the two firms mentioned were assessed as unregistered firms in which the petitioner was a partner when the firm was dissolved or had discontinued its business, and therefore all the partners of the firm were jointly and severally liable for the amount of tax penalty and other sums payable. The first respondent in paragraph 10 of his counter affidavit has also explained the slight variation in the amount stated to have been due from the petitioner in the prohibitory order issued by him on the one hand, and the one issued by the 2nd respondent on the other, the reason for the difference being that, whereas he had included, in the amount due, interest up-to-date, the 2nd respondent had not done so. In paragraph 4 of the counter affidavit filed by the 2nd respondent, he has explained the error he had committed in stating in the prohibitory order No. T.R. 358/69 dated 8th July 1976 that a sum of Rs. 1,79,254.85 was due from the petitioner. Along with the counter affidavit he has produced Ext. R-1 prohibitory order TR. No. 358/69 dated 29th July 1976 (the same as Ext. P-4) and Ext R-2 covering letter dated 29th July 1976 under which Ext. R-1 (Ext. P-4) was sent by him to the 3rd respondent. In Ext. R-2 it was stated that the Correct amount due from the petitioner was Rs. 35,714, not Rs. 1,74,254.85, as stated in Ext. P-2. In paragraph 4 of the counter affidavit the 2nd respondent has expressed regret for the wrong figure, as to the amount outstanding from the petitioner, shown in Ext. P-2 on the basis of the prohibitory order dated 8th July 1976, without noting the fact that sizable portion of the arrears was already collected. Though in the original petition the correctness of the amount shown in Ext. P-2 as arrears due from the petitioner has been challenged, it has little relevance now, as the prohibitory order referred to therein has subsequently been virtually superseded by Ext. P-4 (Ext. R-1) order; and there is also a prayer for quashing Ext. P-4. It would therefore be sufficient now to go into the validity of Ext. P-4 (Ext. R-1) prohibitory order, which is under challenge as per the amended pleadings, without going into the correctness or validity of the prohibitory order No. T.R. 358/69, dated 8th July 1976 (issued by the 2nd respondent) referred to in the 3rd respondent's order Ext. P-2.