RADHAKISHAN BRIJLAL Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is a petition wherein the petitioner challenges two prohibitory orders, copies whereof are annexed as Exs. A and B to the petition, passed by the 2nd respondent, the Additional Collector of Bombay, on the ground that they are illegal and prays that a writ of Mandamus or any other appropriate direction, order or writ be issued under Art. 226 of the Constitution directing the 2nd respondent to withdraw or cancel the said orders and to prohibit him from proceeding further there under or from taking any steps for recovering the sum of Rs. 2,84,042-10-6, being the arrears of in come-tax.

(2.) THE facts leading to the present petition may shortly be stated. At all material times the firm of Bilasrai Banarasilal and Co. were the Managing Agents of the Vishnu Sugar Mills Ltd. The osten sible partners in Messrs. Bilasrai Banarasilal and Co. were one Bilasari Joharmal and Banarasilal Meghraj. It is not in dispute and in fact it is admitted, that Bilasrai was the nominee of the 4th respondents and Banarasilal Meghraj was the nominee of the partnership of Messrs Narandas Kedarnath. Until 1950-51 the firm of Bilasrai Banarasilal and Co. was assessed by the Income Tax authorities as a registered firm under S. 23 (5) (b) of the Income-tax Act, and the tax assessed in respect of that firm was paid by the two firms of the 4th respondents and Messrs. Narandas Kedarnath upon the footing that Bilasrai Joharmal and Banarasilal Meghraj were the partners in the Managing Agency firm representing and as the nominees of those two firms. From and after 1951-52 the said Managing Agency firm was treated as an unregistered firm. It is not in dispute that the assessments for the years 1952-53 to 1955-56 remained unpaid. The result was that the Income Tax Officer issued the requisite certificates to the Additional Collector of Bombay to take steps for the recovery of the arrears of income tax under the provisions of O. 21 R. 46 of the Civil Procedure Code. Alter these certificates were issued, the 2nd respondent called a meeting where the partners of the 4th respondents were present. The partners of the 4th respondent-firm represented by Mr. Manek-shaw admitted the liability of the 4th respondents to pay the arrears of income tax and proposed that the shares in question which stood in the name of the petitioner should be utilised for the purpose of payment of these arrears of income tax. The rest of the partners represented by Mr. Kania appeared through their Attorneys, Messrs. Jeshtaram and Co. , and opposed the proposal that the said shares should be used for the payment of arrears of income tax and protested that the 4th respondents were not liable to pay those arrears. The stand taken by them, it appears was that Messrs. Bilasrai Banarasilal and Co. being the assessees and not the 4th respondents, the latter were not liable to pay the said arrears of income tax. After this meeting was held the 2nd respondent issued the two prohibitory orders which are headed as having been issued under O. 21, R. 46 of the Civil Procedure Code.

(3.) IT is not in dispute that the shares in question belong to the 4th respondents. It is equally not in dispute that the petitioner is a holder of these shares as the nominee and in fact in the petition itself he has stated that he is prepared to argue this petition on the footing that he is the benamidar and the nominee of the 4th respondents in respect of these shares. His plea in the petition is the same as the one taken by Mr. Kama's clients before the Additional Collector, viz. that the 4th respondents not being the assessees are hot liable to pay these arrears and that therefore the shares in question being their property cannot be the subject-matter of the two prohibitory orders.