M.N.Shukla J. - (1.) IN this appeal the appellant has challenged the validity of an action 61 the executive authorities which involved an invasion of the physical liberty of a citizen. The appellant filed a suit for damages for the humiliation and indignity, the mental and physical pain caused to him by his illegal arrest and detention on the 27th and 28th August; 1963. The plaintiff's case was that he was a respectable citizen of INdia possessing sufficient property, carrying on a flourishing business under several firm names and was annually assessed to considerable income-tax. By an order dated the 10th January, 1952, the INcome-tax Officer, "A" Ward, Kanpur, assessed him to an income-tax amounting to Rs. 83,594-3-0 for the assessment year 1947-48, against which he preferred an appeal under Section 3 of the INcome-tax Act to the Appellate Assistant Commissioner, INcome- tax. He also moved an application before the INspecting Assistant Commissioner, INcome-tax, to the effect that he had filed an appeal and was depositing Rs. 5,000 each and meanwhile no proceedings may be taken against him for the realisation of the aforementioned tax till the disposal of the appeal. On the 22nd of March, 1952, Sri R. N. Mattoo, INspecting Assistant Commissioner, INcome-tax, ordered that no proceedings be taken for the recovery of the tax assessed under the aforesaid order dated January 10, 1952, till the decision of the appeal, provided the plaintiff deposited a further sum of Rs. 5,000 by the 29th March, 1952. This amount was also deposited by the plaintiff within time, but, notwithstanding these orders, it was alleged that Sri Sukhdeo Prasad Nigani, defendant No. 2, who was then the Tahsildar Magistrate, INcome-tax, Kanpur, issued notice to the plaintiff calling upon him to pay the amount of the tax within four days as certificate had been received under Section 46, Clause (2), of the INcome-tax Act, through the Collector, Kanpur for the recovery of the said amount and if the deposit was not made within time steps for recovery would be taken. The plaintiff applied to the Tahsildar Magistrate (defendant No. 2) and also to defendant No. 1, who was then the Additional District Magistrate, Rural Area, Kanpur, as well as to the District Magistrate, Kanpur, but to no effect. It was also alleged in the plaint that by mistake the INcome-tax Officer had issued recovery certificate in spite of the stay by the INspecting Assistant Commissioner of INcome-tax but the mistake was rectified when the matter was brought to the notice of the income-tax authorities by the plaintiff and the INcome-tax Officer issued a rectification letter dated April 13, 1953 (Exhibit 40), wherein it was clearly mentioned that the recovery of arrears against Sri Jwala Prasad Nigam (plaintiff) for the assessment year 1947-48' were to be staged as time had been allowed till appeal. It was alleged that despite this stay order, the defendants proceeded to issue coercive measures' for realisation of the income-tax and, ultimately, caused him to be arrested on 27th August, 1953. He was lodged in the Unnao jail for more than 24 hours in pursuance of these illegal orders and it was only on the evening of August 28, 1953, when he actually deposited Rs. 10,000 more in cash that he was released from custody. The plaintiff claimed a sum of Rs. 10,000 as damages for his wrongful arrest by the defendants.
(2.) THE defendants alleged that the Income-tax Officer was, not competent, to stay further proceedings after he had issued the certificate of recovery the order of stay was without jurisdiction and the defendants were justified in proceeding with coercive measures for realisation of the arrears of Government dues. It was further alleged by virtue of a later amendment in the written statement that the defendants did not receive any stay order from the income-tax authorities for stay of the proceedings and that they were seized of the case on receipt of recovery certificate from the income-tax authorities. Another plea subsequently taken was that the defendants were entitled to the protection of the provisions of Section 67 of the Income-tax Act and Section 283(m) of the Land Revenue Act. The trial court decreed the plaintiff's suit for damages to the tune of Rs. 1,000 only, against Which the defendants filed an appeal and the plaintiff also filed cross-objections. The lower appellate court allowed the defendants' appeal and dismissed the plaintiff's cross-objections with the result that the suit for damages stood dismissed with costs. In these circumstances' the plaintiff has preferred this second appeal and prayed that the suit for Rs. 4,000 be decreed with costs throughout. The main points which were urged before me on behalf of the appellant were that the income-tax authorities were competent to pass the stay order and the order of the Income-tax Officer, dated April 13, 1953, was valid and within his jurisdiction, that the stay order was communicated to the defendants Nos. 1 and 2, and actually received in their office on April 14, 1953, and, thereafter, the defendants had no jurisdiction to proceed with the recovery and were bound to stay their hands and that, in the circumstances, the Additional District Magistrate and the Tahsildar Magistrate, Income-tax, Kanpur, acted plainly without jurisdiction and contrary ,to law, that they could not claim protection under Section 67 of the Income-tax Act or Section 233(m) of the U.P. Land Revenue Act, and they were liable for damages.
(3.) THE first point, therefore, which falls for consideration is as to the power of the income-tax authorities to pass the stay order in the circumstances of the case. THE relevant facts are that the Inspecting Assistant Commissioner, Income-tax, had granted; a stay order on the 22nd March, 1952, on the condition that the assessee should deposit another sum of Rs. 5,000 by 29th March, 1952. That condition was fulfilled. THErefore, on the 13th April, 1953, the Income-tax Officer, Kanpur, passed an order of stay and communicated the same by his letter dated the 13th April, 1953, exhibit 40, addressed to the Collector, Kanpur, clearly intimating that proceedings in respect of the recovery certificate issued against Sri Jwala Prasad (assessee) were to be stayed on account of the time allowed to him till appeal. It was contended for the respondents that in view of the provisions of Sections 45 and 46 of the Indian Income-tax Act, 1922, an order of stay could be passed only prior to the issue of a recovery certificate or in the alternative only after the cancellation of the recovery certificate, that otherwise there was no jurisdiction to stay the recovery and the Collector was competent to take coercive measures for realising the amount in respect of which the recovery certificate was once issued. Section 45 of the Indian Income-tax Act runs as follows: " Any amount specified as payable in a notice of demand under Subsection (3) of Section 23A or under Section 29 or an order under Section 3.1 or Section 33, shall be paid within the time, at the place and to the person mentioned in the notice or order, or if a time is not so mentioned, then on or before the first day of the second month following the date of the service of the notice or order, and any assessee failing so to pay shall be deemed to be in default, provided that, when an assessee has presented an appeal under Section 30, the Income-tax Officer may in his discretion treat the assessee as not being in default as long as such appeal is undisposed of." The recovery certificate is issued Under Section 46, Sub-section (2), and it reads as under: " The 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." ;