UNION OF INDIA Vs. BIBHUTI BHUSAN SEN

JUDGEMENT

(1.) These appeals are from an order of the High Court of Calcutta dated April 3, 1953, by which the said High Court rejected an application made on behalf of the appellant herein to grant leave to attach and sell through the Certificate Officer, Alipore, the properties and assets of Messrs. Sen Brothers and Co. in the hands of a receiver appointed by the High Court, for the recovery of arrears of income-tax due from the aforesaid firm. The facts lie within a narrow compass and are stated below.

(2.) There was a partition suit going on between certain Sens and one of the properties included in the suit was the firm called Messrs. Sen Brothers and Co. A preliminary decree having been passed in that suit by a court at Alipore, there was an appeal to the High Court of Calcutta and in that appeal an order was made for the appointment of receivers in respect of the firm. From the year 1945 to the year 1953 the receivers were two of the Sens themselves, namely, Balai Lal Sen and Bibhuti Bhusan Sen. Assessments of income-tax were made on them as receivers with respect to the income of the firm for the years 1945- 46, 1949-50, 1950-51, 1951-52 and 1952-53, but of those assessments that for the year 1949-50 was subsequently cancelled. The income-tax department having been unable to realise the tax from the receivers, started certificate proceedings in respect of their dues under each one of remaining four assessments but while the certificate proceedings were pending, the two Sens ceased to hold the office of receiver. They were succeeded by Sisir Kumar Basu and Kanai Lal Sen. on February 5, 1954, but on December 23 following, Sisir Kumar Basu came to be the ole receiver. Thereupon, on February 6, 1955, the union of India, represented by the Commissioner of Income-tax, West Bengal, made an application to the High Court by which they asked for two, relief's, namely, (a) leave to attach and sell through, the Certificate Officer, Alipore, the property and assets of Sen. Brothers and Co. in the hands of Sisir Kumar Basu, the receiver and to realize the arrears of income-tax due from Sen. Brothers and Co and from the said receiver, out of the sale proceeds and (b) leave to serve notice under;sectipn!46(5A) of the Income Tax Act on the said receiver, that is Sish ;Kumar Basu and to. Take further proceedings as provided in the section. A, rule was issued, on that application by P.N, Mookherjee and Renupada Mukherjee J.J. in terms of the prayers. Thereafter, while the rule was pending, Sisir Kumar Basil resigned and M. K. Sen. came to be appointed receiver An application was then made for the substitution of M. K. Sen. which was allowed and the rule came up for hearing as a rule against the receiver so substituted.

(3.) The rule was heard be S. C. Lahiri and S. K. Sen JJ. They discharged the rule on the main ground that there was no provision in the Income Tax Act, 1922, or the Bengal Public Demands Recovery Act for substituting in place of the receiver who was assessed for the income obtained by him on behalf of the owners of the firm, another receiver who has not been so assessed, and that in the absence of an assessment on the firm, it would not be right to hold that the assets in the hands of a subsequent receiver (namely, M. K. Sen), who was not an assessee and who was not before the Certificate Officer at all, could be proceeded against with the permission of the court. It may be stated here that the form of the application made by the present appellant to the High Court was such that the question of the right of the appellant to proceed against the successor to the assessee receivers was directly raised and reliance was placed on sub-section (2) of section 41 of the Income Tax Act and section 43 of the Bengal Public Demands Recovery Act. The learned judges dealt with those provisions and came to the con collusion that they did not justify leave being granted to the appellant proceed against the assets of Messrs. Sen. Brother's arid' Co. in the hands of a receiver who was riot assessed and who could not be substituted in place of the assessee receiver.