M R RADHAKRISHNAN Vs. UNION OF INDIA

JUDGEMENT

(1.) THE plaintiffs in O. S. No. 50 of 1953 in the court of the Subordinate Judge of madurai are the appellants before us. They are the sons of the second defendant. They filed the suit for a declaration that the properties set out in the schedule to the plaint which according to them were properties belonging to the joint family consisting of them and their father are not liable to be proceeded against for the realisation of the income-tax assessed on their father the second defendant for the assessment years 1945-46, 1946-47 and 1947-48, in so far as it related to their interest in the suit properties. They alleged in the plaint inter alia that the family of the plaintiffs and the second defendant was carrying on an ancestral business in textiles, that the second defendant started and conducted several new businesses which were speculative in character, including the import and export in several commodities, infringing the control orders in force at the time, and that he never bestowed any control over the affairs of the business nor maintained proper accounts. The pontiffs submitted that the levy of assessment could not in Jaw affect their interest in the joint family properties for the following among other grounds, namely, that the assessment on me second defendant was made on an estimate basis because proper accounts had not been maintained regularly and the assessment was made on the footing that several accounts had been suppressed by him and it was by reason of his negligence amounting to criminal omission to submit proper information to the income-tax, department that he was assessed in a large sum which was far in excess of what would be legitimately payable on the actual income. The first defendant is the Union of India, representing the Income-tax department. They denied the material allegations in the plaint and stated that the assessment was made on profits which the second defendant must have made and in any event the assessment could not be questioned in the suit. They also took an objection that the plaintiffs had no cause of action against the Government. This plea was evidently a plea that the suit was premature because only certificates had been issued by the Income-tax authorities under Section 46 (2) of the income-tax Act. They pleaded that in fact the properties sought to be proceeded against were not properties belonging to the joint family.

(2.) THE learned Subordinate Judge of Madurai who tried the suit held that the suit properties were joint family properties/ that the businesses conducted by the second defendant were not speculative in nature, that the second defendant had not mismanaged the conduct of the business and therefore the liability of the second defendant to pay income-tax was a debt which the plaintiffs as sons were bound to pay from and out of the joint family properties under the doctrine of pious obligation. He further held that this debt could not be held to be tainted with immorality so as to bring it within the category of avyavaharika debts. He also upheld the objection raised on behalf of the Union of India that the suit was premature and hence not maintainable. On these findings the suit was dismissed. Hence the appeal.

(3.) AT the outset we may briefly dispose of one of the grounds on which the suit was dismissed, namely, that the suit was premature. We are unable to agree with the learned Subordinate Judge. Admittedly the certificate under Section 46 (2) of the Income-tax Act had been issued. Under that provision once the Collector receives the certificate, he shall proceed to recover from the assessee the amount specified therein as if it were an arrear of land revenue. The plaintiffs, apprehending that not merely the interest of the assessee, that is the second defendant, but the entire properties of the family including the shares of the plaintiffs might be brought to sale, have filed the suit. We fail to see why they should wait till a date is fixed. for the sale or till the sale takes place. Mr. Rama Rao Sahib, who appeared for the Income-tax Department very fairly did not try to uphold the finding of the learned trial Judge on this point.