UNION OF INDIA Vs. CALCUTTA HARDWARE

JUDGEMENT

(1.) The Union of India obtained these two rules on applications under Article 227 of the Constitution. The subject-matter of challenge in these two rules is an order dated February 22, 1969, passed by the Commissioner, Presidency Division, whereby he disposed of the two appeals under Rule 86 of the Second Schedule to the I.T. Act, 1961, being Cases Nos. 66 and 67 of 1968-69. By the order impugned the Commissioner has held that the tax recovery proceeding initiated under the I.T. Act, 1961, for recovery of tax dues on an assessment made under the previous Act, namely, the Indian I.T. Act, 1922, is not maintainable. According to the Commissioner, demand for payment of such tax having been made under the provisions of the 1922 Act, proceedings for recovery had already started under that Act and notwithstanding the coming into force of the Act of 1961 shortly thereafter, such proceeding under the 1922 Act must continue in view of the provisions of Section 297(2)(c) of the 1961 Act. The Commissioner has, therefore, taken the view that initiation of a proceeding under the 1961 Act for recovery of such dues is not maintainable in law.

(2.) The facts are not in dispute. The assessment was completed under the 1922 Act and the demand for payment of tax assessed was also issued under Section 29 of the 1922 Act at a time when the 1961 Act had not come into effect. But before any certificate could be issued, the 1961 Act came into force and hence, the recovery proceeding was initiated by the Revenue authorities under the provisions of the 1961 Act. An objection was raised that such a proceeding under the new Act is not maintainable which was overruled by the TRO but was sustained by the Commissioner on an appeal referred to hereinbefore. The short point that arises for our consideration is as to whether such a proceeding for recovery under the new Act could be initiated or whether the Revenue authorities are still required to proceed under the old Act for recovery of such dues.

(3.) On a careful consideration of the point at issue, we are of the view that the Commissioner materially misread the legal position as also the terms of Clause (c) of Sub-section (2) of Section 297 of the 1961 Act in thinking that, in view of that clause, the recovery has to be made under the provisions of the old Act.