A E M USOOF Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THESE writ petitions are filed under article 226 of the Constitution of India for the issue of appropriate writs. Writ Petition No. 1399 of 1963 is for the issue of a writ of certiorari or any other appropriate writ to quash the order of attachment dated August 31, 1963, issued by the second respondent. Writ Petition No. 1400 of 1963 is a similar writ to quash the order of attachment dated September 29, 1963, issued by the second respondent. Writ Petition No. 1401 of 1963 is for the issue of a writ of cetiorari or any other appropriate writ to quash the proclamation of sale dated October 14, 1963, issued by the second respondent. The first respondent in all these cases is the Income-tax Officer, Tuticorin The facts in these petitions are not in dispute. The petitioner in the status of a "resident and ordinarily resident" was subject to tax of about Rs. 12, 36, 537 in respect of his foreign income in Ceylon for the years 1943-44 to 1956-57.

(2.) THE relative orders of assessments having become final, the departmental authorities started recovery proceedings and attached certain properties in India said to belong to the petitioner. Pursuant to such coercive processes initiated, the properties attached were sought to be brought to sale and necessary proclamations were issued. At this stage the petitioner has come to this court with the above writ petitions on the ground that the laws of Ceylon prohibit or restrict the remittance of money to India and by reason of such prohibition or restriction, funds cannot be brought into the taxable territories and that he cannot, therefore, be treated as a defaulter and that he is entitled to the benefit of the second proviso to section 45 of the Indian Income-tax Act, 1922. Section 45 of the Act runs as follows".45. Tax when payable. --- Any amount specified as payable in a notice of demand under sub-section (3) of section 23A or under section 29 or an order under section 31 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 ofrovided further that where an assessee has been assessed in respect of income arising outside the taxable territories in a country the laws of which prohibit or restrict the remittance of money to the taxable territories, the Income-tax Officer shall not treat the assessee as in default in respect of that part of the tax which is due in respect of that amount of his income which by reason of such prohibition or restriction cannot be brought into the taxable territories, and shall continue to treat the assessee as not in default in respect of such part of the tax until the prohibition or restriction is removedExplanation. --- For the purpose of this section income shall be deemed to have been brought into the taxable territories if it has been utilised or could have been utilised for the purposes of any expenditure actually incurred by the assessee without the taxable territories or if the income whether capitalised or not has been brought into the taxable territories in any form." *It is the petitioner's case that he is not a defaulter within the meaning of section 45 of the Act and the revenue, therefore, cannot proceed against the Indian properties for the issue of the usual certificate under section 46(2). He would say that the prohibition or restriction regarding the remittance of money from Ceylon to India still continues, that he has taken all possible steps to establish the existence of such a prohibition or restriction and that, therefore, the action taken by the respondents in treating him as a defaulter and in attaching the properties in India are illegal or without jurisdiction.