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Petitioner: LINGALA VENKATA RANGA REDDY VS Respondent: AGRICULTURAL INCOME-TAX AND COMMERCIAL TAX OFFICER, WARANGALHonorable Justice MANOHAR PERSHADK. Ranganathachari,Third Government Pleader
1965 P T D 400
1965 P T D 400
[Andhra Pradesh (India)]
Before Chandra Reddy, C. J. and Gopalrao Ekbote, J
LINGALA VENKATA RANGA REDDY
Versus
AGRICULTURAL INCOME-TAX AND COMMERCIAL TAX OFFICER, WARANGAL AND ANOTHER
Writ Petition No. 818 of 1961, decided on 5th November 1963.
Agricultural Income-Recovery of tax-Assessment under Hyderabad Agricultural Income-tax Act-Repeal of Act-Recovery of taxes whether permissible-Issue of demand notice in 1955--Recovery in 1961 whether time-barred-Hyderabad General Clauses Act, 1308-F., S. 3-Hyderabad Agricultural Income-tax Act, 1950, S.34(5).
The petitioner was assessed to agricultural income-tax under the provisions of the Hyderabad Agricultural Income-tax Act for the assessment years 1952-53, 1953-54, 1954-55 and 1957-58. For the years 1952-53 and 1953-54 assessments were made in 1955 and for the latter two years assessments were made in 1959. As the tax was not paid, demand notices were issued for the first two years in 1955 and for the latter two years in 1958 and 1959 respectively. As the assessee did not pay the full amount demanded in spite of these notices, a certificate for non-payment was issued under section 34(3) of the Hyderabad Agricultural Income-tax Act, and, on receipt of the certificate, the District Collector empowered the Tahsildar in 1961 to proceed with the recovery of the amounts under coercive processes. Thereupon, the assessee applied for a writ to prevent the Tahsildar from having recourse to section 52 of the Madras Revenue Recovery Act, 1864. The assessee contended that, as the Hyderabad Agricultural Income-tax Act had been repealed at the time when the tax was sought to be recovered, the recovery proceedings were invalid and alternatively that, having regard to the provisions of section 34(5) of the Hyderabad Agricultural Income-tax Act, the claim in regard to the years 1952-53 and 1953-54 was time-barred.
Held, the repeal of the Hyderabad Agricultural Income-tax Act did not stand in the way of the Department pursuing the remedies available to it for the collection of the taxes due. Section 3 of the Hyderabad General Clauses Act saved the right of the Department to collect the amount and it was competent for the Collector to recover it under section 52 of the Madras Revenue Recovery Act, 1864.
With regard to the assessment years 1952-53 and 1953-54, the taxes became payable in 1955 when notices of demand were issued in respect of it and therefore the proceedings for the collection of taxes started in 1961 was barred by time under the provisions of section 34(5).
[Case-law referred to.]
K. Ranganathachari for Petitioner.
Third Government Pleader for Respondents.
JUDGMENT
[MANOHAR PERSHAD, J., before whom the petition came on for hearing, made the following order:]
In these two writ petitions, the point for consideration is whether the words "liability already incurred" occurring in section 41 of the Andhra Pradesh General Sales Tax Act include the liability to pay. The contention of Sri Choudary, the learned counsel for the petitioner, in W. P. No. 912 of 1961 is that the expression "liability already incurred" used in the above section does not include the liability to pay. My attention is drawn to a decision of the Supreme Court in the case of Chatturam Horilram Ltd. v. Commissioner of Income-tax ((1955) 27 I T R 709, 717). On behalf of the other side, my attention is drawn to the case of Budhan Khan V. State of Andhra Pradesh ((1961) 12 S T C 829) and a Bench decision of this Court in the case of Yellappa Nandyal v. State of Andhra Pradesh ((1960) 1 An. W R 449), and it is contended that in the above cases this Court has not only considered the scope of section 41 of the Andhra Pradesh General Sales Tax Act, but has held that the expression "liability already incurred" means liability-to pay. The contention of Sri Choudary is that the Supreme Court decision was not brought to the notice of the learned Judges and, if their attention was drawn to that, such an interpretation could not have been given to the words used "liability already incurred". It appears that the attention of this Court was not drawn to the Supreme Court decision. As certain observations in the Supreme Court decision appear to support the contention of the petitioner, I think it better if the writ petitions are decided by a Bench. I therefore refer these two petitions to a Bench.
[The petition was heard in pursuance of the aforesaid order by the Chief Justice and GOPALRAO EKBOTE, J. and the following judgment was delivered by the Hon'ble the Chief Justice CHANDRA REDDY:]
CHANDRA REDDY, C. J.-The petitioner seeks the issuance of a writ of mandamus directing the Agricultural Income-tax and Commercial Tax Officer and the Collector of Warangal to forbear from taking further steps inclusive of the certificate proceedings of R. C. No. 1341/61/A2, served on the petitioner on July 4, 1961.
The petitioner was assessed to agricultural income-tax under the provisions of the Hyderabad Agricultural Income-tax Act (XIII of 1950) for the assessment years 1952-53, 1953-54, 1954-55, and 1957-58 in the sums of Rs. 1,108-35 nP., Rs. 1,10835 nP. Rs. 1,138.38 nP. and Rs. 700 respectively. With respect to the assessment year 1957-58, a sum of Rs. 500 was paid and the balance outstanding for the assessment year is only Rs. 200. For the years 1952-53 and 1953-54, assessments were made on June 26, 1955, while for the latter two years the assessments were made on March 14, 1959 and November 30, 1959, respectively. As the tax was not paid by the petitioner, demand notices were issued for the first two years on October 3, 1955, and for the latter two years on August 20, 1958 and December 3, 1959.
Notwithstanding the notices, the assessee did not choose to pay the taxes except the sum of Rs. 500 as mentioned above. This led the concerned officer to issue a certificate of non-payment as required by section 34(3) of the Hyderabad Agricultural Income-tax Act (XIII of 1950).
The District Collector, on receipt of this certificate, empowered the Tahsildar on February 20, 1961, to proceed with the recovery of these amounts under coercive processes. It is to prevent the Tahsildar from having recourse to section 52 of the Madras Revenue Recovery Act (II of 1864) that this writ petition has been presented.
In support of the petition, it was first faintly urged by the learned counsel for the petitioner that by the time the tax leviable and payable under the Hyderabad Agricultural Income-tax Act was sought to be collected, this Act was repealed and there being no machinery for the collection of the amount it was not open to the authorities concerned to invoke the provisions of either section 34 of that Act or the provisions of the Madras Revenue Recovery Act. We do not think that there is any substance in this argument having regard to section 3 of the Hyderabad General Clauses Act, which, inter alia, provides:
"Unless a different intention appears-
(5) a repeal of any Act shall not affect,-
(a) the previous operation of any repealed enactment or anything established by that enactment or duly done; or
(b) any right, privilege, obligation or liability accrued or incurred under any repealed enactment; or . . . .
(d) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid;
and any such investigation, legal proceeding or remedy shall be instituted, continued or enforced, and any such penalty, forfeiture or punishment shall be so imposed as if the enactment had not been repealed."
It is manifest from this section that the repeal of the Hyderabad Agricultural Income-tax Act does not stand in the way of the Department pursuing the remedies available to it for the collection of the taxes due. By reason of the provision in the Hyderabad General Clauses Act (III of 1308-F.), the right of the Department to collect the amount is saved and it is competent for the Collector to recover it under section 52 of the Madras Revenue Recovery Act.
Another argument raised by the learned counsel is that having regard to the provisions of section 34(5) of the Hyderabad Agricultural Income-tax Act, the claim in regard to the years 1952-53 and 1953-54 is barred. This argument is well founded and has to be given effect to. Section 34(5) postulates:
"No proceeding for the recovery of any sum payable under this Act shall be commenced after the expiration of three years after-
(a) the last date on which the sum is payable without the assessee being deemed to be in default; or
(b) the date on which the last instalment fixed under subsection (2) of section 33 falls due."
Incontestably, the taxes became payable in 1955 after the assessments were made and, in fact, the notices of demand were served on the petitioner on October 3, 1955. If so, the proceedings started for the collection of taxes in 1961 are barred as being beyond three years contemplated by section 34(5). It follows that the Department cannot enforce the liability for the two years 1952-53 and 1953-54 under the provisions of the Hyderabad Agricultural Income-tax Act read with section 52 of the Madras Revenue Act. This does not stand in the way of the Department availing itself of such other remedies as may be open to it under any other law.
In the result, the petitioner gets relief in regard to the assessment years 1952-53 and 1953-54 but not in respect of the years 1954-55 and 1957-58, as the proceedings in respect of these years were initiated within the period of three years. To that extent, the writ petition is allowed. In other respects, it is dismissed. There will be no order as to costs.