DWARKA DASS L Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is a petition under article 226 of the Constitution.

(2.) THIS is to inform you that the decision of the Government in respect of adjusting the payments made under section 18A in Pakistan has not yet been arrived at. It is therefore that neither recovery of the demands for the relevant assessment years has been pursued nor can the refunds be granted to you. You may please note that the excess payments made by you for the assessment years 1946-47 and 1947-48 cannot be accounted for against the demands outstanding for the assessment year 1948-49.

(3.) THE other argument is that under article 9 of the Indian Independence (Rights, Property and Liabilities) Order, 1947, issued under section 9 of the Indian Independence Act, the liability for the repayment of this amount was imposed on the Dominion Government of India. THE Dominion Government being liable to refund the amount, article 294 of the Constitution makes the Union Government now subject to the same liability. THE learned counsel for the respondent controverts both the above contentions by saying that the amounts having been paid in Lahore, which is now a part of Pakistan, the Union Government cannot be made liable for the refund of the amounts, because the sums were paid before the Partition, and the Indian Income-tax Act would not govern such a case. Concerning the second ground, he says that a liability like this does not come within the words used in article 9 of the Indian Independence (Rights, Property and Liabilities) Order, 1947, because the payment cannot be said to be a loan, nor a guarantee nor a financial obligation within the meaning of the words as used in that article. He has further contended that the Government of the Indian Dominion was liable for the adjustment of the amounts, paid prior to Partition in the territories which now fall in Pakistan, concerning only those cases whose files have been transferred from Pakistan to India. For this assertion, the learned counsel relied on paragraph No. 9(f) of the Report of Export Committee No. III(i), dated August 1, 1947, published at page 10 of Partition Proceedings, Vol. III, a publication of 1948 by the Manager, Government of India Press, New Delhi. This clause deal with refund or adjustment of advance payments of income-tax, and it says that the liability will be on the Government to whom the assessment file is transferred. But the Muslim members made their acceptance of the agreement conditional on the corresponding deposits being transferred to Pakistan. THE argument of the learned counsel is that the file of this case not having been transferred by Pakistan authorities, the Dominion of India was not liable for the refund of the excess payments made under section 18A of the Income-tax Act. THE learned counsel further contended that the petitioner has not filed the assessment order passed in Pakistan with respect to the assessment years 1946-47 and 1947-48, and it was not known what excess payments had actually been made by the petitioner in those years. THE learned counsel further urged that the claim, if it is treated to be a claim for refund, is barred by time. I may also mention the preliminary objection taken to the maintainability of the petition, which is to the effect that the order refusing the refund is appealable and, the petitioner having failed to file an appeal, this petition should not be entertained.