SECRETARY OF STATE Vs. VMMEYYAPPA CHETTIAR

JUDGEMENT

(1.) This appeal arises out of a suit for a declaration that the plaintiff is not liable to be assessed to income-tax on the income received by him from his business in Saigon and for recovery of tax levied from him for the years 1929-30 and 1930-31. Issue 1 in the case raised the question whether the suit was not barred by Section 67, Income-tax Act 11 of 1922. Dealing with this point as a preliminary issue, the District Munsif dismissed the suit as barred by that section. The lower appellate Court was of opinion that the suit would be maintainable if the assessment was ultra vires or had been made without jurisdiction. In view of the allegations in the plaint, it held that the Court must decide on evidence whether the plaintiff was permanently residing in French territory, as, in that case, any income there received by the plaintiff from the Saigon business would not be income assessable under the Act. It recorded as concession by the plaintiff's vakil that issue 6 in the case, viz.: Whether the assessment was made without proper inquiry and without giving the plaintiff an opportunity to prove his contentions could not be tried by the civil Court. Issue 5(a) raised the question of fact: Whether the plaintiff had ceased to reside in British India, and whether he had no assessable income in British India.

(2.) The other issues were consequential. The lower appellate Court accordingly remanded the suit for trial of issue 5(a) and for findings on the other issues in the light of the finding that may be come to on issue 5(a). Against that order of remand, this appeal has been preferred by the Secretary of State. In view of the arguments urged before us, it is necessary to refer to a few facts appearing from the documents put in evidence as bearing on the preliminary issue. The plaintiff was at one time admittedly a resident of Palavangudi in the Chettinad (Ramnad District), but his case was that from 1926 he had been permanently residing at Pondicherry in French Territory and that after a partition in his family in 1928, he had no proprietary interests, business or assets anywhere in British India. In October 1929 the plaintiff's agent appeared before the Income-tax Officer and put forward this contention. For reasons recorded in Ex. 1, that officer declined to accept that plea. He was of opinion that the plaintiff's residence out of British India was only temporary, that his wife was living in Chettinad and that he had a right to a share in the family house in Chettinad after his father's death. An appeal against Ex. 1 proved infructuous; and as the plaintiff did not make any return in respect of his income or produce his accounts in spite of several adjournments, he was assessed Under Section 23(4) of the Act on a sum of Rs. 8,100, being the amount disclosed by the accounts of the partnership to have been remitted to him (vide Ex. 2). For the next assessment, there was no appearance by or on behalf of the plaintiff before the Income-tax Officer. The steps taken to serve notices on the assessee are detailed in Ex. 3. On default of appearance in spite of these steps, the assessment had again to be made Under Section 23 (4). But as, in the meanwhile, the assessee had sent a notice of suit to the Commissioner of Income-tax on 26 November 1930, the Income-tax Officer referred in his order (Ex. 3) dated 4 March 1931 to the materials on which he came to the conclusion that the plaintiff must be regarded as residing in Palavangudi. In addition to the circumstances stated in Ex. 1, he referred to the fact that the plaintiff's wife was living in Palavangudi in a house which he believed was purchased by the plaintiff in her name and that from an affidavit filed by that wife it appeared that plaintiff celebrated his daughter's marriage in that house in the year Sukla (1929-80) and that the plaintiff occasionally used to come and stay with her in that house.

(3.) In the circumstances above stated, two contentions have been urged before us in support of the Government's appeal; (1) that the bar enacted by the first part of Section 67, Income- tax Act of 1922 is absolute and unqualified, and (2) that the legislature has left it to the income-tax authorities to decide both questions of fact and of law, that appropriate remedies by way of appeal and reference (including a reference to the High Court on points of law) have been provided in the Act and that it could not therefore be the intention of the Legislature that civil Courts should in a separate suit be at liberty to examine the correctness of the conclusions arrived at by the income-tax authorities. Before dealing with the decisions cited before us, it is necessary to emphasize the fact that, in some of them, the question of exclusion of the civil Court's jurisdiction had to be dealt with merely on general principles and in the absence of a statutory prohibition, while in others the decision turned upon the scope of the prohibition enacted by statute. In the former class of cases, reliance has naturally to be placed on the general scheme of the law creating or empowering the authority whose acts are sought to be challenged. The observations of the Judicial Committee in Colonial Bank of Australia V/s. Willan, (1874) 5 PC 417 are frequently referred to, as defining the limits of the civil Court's powers of intervention. But even in applying these observations, it seems to me unwarranted to assume that in all cases in which a prerogative writ can, according to those observations, issue from a superior Court, there must also exist a right of civil suit in the ordinary Courts of the land.