V.S.DESAI J. - (1.) THE questions involved in these two petitions under Art. 226 of the Constitution relate to the notices of demand for the advance payment of tax from the petitioners as agents of certain non - residents. The petitioners have asked for a writ of certiorari quashing the said notices of demand and for a writ of prohibition and/or mandamus or other appropriate writ restraining and prohibiting the respondent, his officers, servants and agents from taking any steps or proceedings in enforcement, furtherance, pursuance or implementation of the said notices of demand or from taking any steps or proceedings towards recovery of any portion of the advance tax demanded from the petitioners as the agents of the non -resident firms. The facts which are not in dispute may be briefly stated as follows :
(2.) THE petitioners are a limited company incorporated under the Indian Companies Act, 1913, and carry on the business of manufacturing and selling diesel trucks and bus chassis, locomotives and other heavy engineering products. The manufacture of locomotives is carried on by the petitioners in collaboration with a German firm called "Krauss -Maffei A. G." and the manufacture of diesel trucks and bus chassis is carried on in collaboration with another German firm called " Daimler Benz A. G. " For each of the assessment years from 1955 -56 to 1961 -62 notices had been issued to the petitioners under S. 43 of the Indian IT Act, intimating to them (the petitioners) that they would be treated as agents of the two non -resident firms, and for the said years orders were passed under S. 43 of the Act, treating the petitioners as agents of the said firms. For the asst. yr. 1962 -63, with which we are concerned in the present case, there was no notice under S. 43 of the Act served on the petitioners and no order under that section was passed by the respondent, treating the petitioners as agents of the said firms. On the 8th Sept., 1961, however, the petitioners received two notices of demand under S. 29 of the Act under the first of which the petitioners were called upon to make an advance payment of tax of Rs. 90,833.29 nP. under S. 18A (1) of the Act for the asst. year 1962 -63 as the agents of the " Krauss Maffei A. G. " firm and under the second notice an advance payment of tax of Rs. 6,32,629.62 nP. was called for from them as the agents of the other firm " Daimler Benz A. G. " Correspondence was carried on by the petitioners with the IT authorities in connection with these notices of demand. But on the 2nd and Rd of Nov., 1961, fresh notices for the advance payment of tax were again repeated by the IT authorities. As a result of further correspondence, the amount of Rs. 90,833.29 nP., which was claimed as the advance payment of tax as the agents of the " Krauss Maffei A. G. " firm, was reduced to Rs. 66,832.89 nP. The petitioners went to the CIT who directed them to see the IAC. The petitioners wrote to the IAC to let them know the decision of the CIT at an early date, but subsequently, on the 6th April, 1962, the respondent, who is the ITO, Companies Circle I(1), Bombay, wrote to the petitioners calling upon them to make the advance payment of tax before the 11th April, 1962, and intimating to them that if they failed to do so, coercive measures for recovering the demand would be adopted. Thereafter, on the 16th April, 1962, the petitioners also received a communication from the CIT wherein he expressed his view that the demand for advance payment of tax made by the ITO was correct. Thereafter, the present petition has been filed by the petitioners on the 11th June, 1962, praying that the notices of demand be quashed and the respondent be restrained from taking any coercive measures for the recovery of the amounts stated in the notices of demand. 3. The petitioners' case is that the notices of demand issued by the ITO to the petitioners for the advance payment of tax are illegal, void and without jurisdiction. AccoRding to the petitioners, no advance payment of tax could be demanded from the petitioners unless they were appointed agents of the non -resident firms by oRders properly passed under S. 43 of the Indian IT Act for the asst. year 1962 -63. For the asst. year 1962 -63 there was no notice issued by the ITO to the petitioners under S. 43, intimating to them his intention of treating them as agents of the non - resident firms and they had also not been given an opportunity of being heaRd as to their liability as such agents. AccoRding to the petitioners, therefore, they could not be deemed to be the agents of the non -resident firms and no advance payment of tax could be demanded from them. It is also their case that in view of the scheme of ss. 40(2), 42 and 43 of the Indian IT Act no vicarious liability in respect of the income of a non -resident for any year can be imposed on an agent until after the close of that year and, therefore, the petitioners could not be called upon as agents of the non -resident firms, to pay advance payment of tax under S. 18A of the Act.
(3.) IN the affidavit, which the respondent has filed in reply to the petition, the position taken by the respondent is that inasmuch as by an order passed under S. 43 of the Indian IT Act the petitioners were appointed agents of the non -resident firms for the financial year 1961 -62, that appointment enures for all purposes of the Act during the said financial year. The advance payment of tax was to be made in the said financial year and, therefore, the notices under S. 18A for the advance payment of tax, which were served on the petitioners on the 2nd and 3rd Nov., 1961, which was subsequent to their appointment as agents of the non -resident firms under S. 43 of the Act for the financial year 1961 -62, were perfectly in order. It was contended by him that under S. 60B of the Indian IT Act it was provided that tax may be levied for a period other than the previous year or deducted at source or paid in advance wherever so provided.;