THE INCOME-TAX OFFICER, ALWAYE v. THE ASOK TEXTILES LTD., ALWAYE
Citation: [1961] 3 S.C.R. 236; 1960 INSC 266
Court: Supreme Court of India
Bench: J.L. KAPUR , M. HIDAYATULLAH, J.C. SHAH
Judgment date:
Case summary
1960 INSC 266. Supreme Court of India judgment dated 1960-12-13. THE INCOME-TAX OFFICER, ALWAYE v. THE ASOK TEXTILES LTD., ALWAYE. Read the judgment and...
Judgment text
236 SUPREME COURT REPORTS [1961] ,960 folders. That was the finding made by the authority on an earlier occasion when Punamchand and Vishnuc Sh•i Ambic• Mills prasad had moved the authority under s. 15 of the , Commi>sioner of Income- tax, Bombay City v. ]algaon Electric Supply Co. Ltd. , [1960] 40 l. T. R. 184 and Commissioner of Income-tax, Bombay City v. Khatau Makanji Spng. c5- Weavg Co. Ltd. , [1960] 40 l. T. R. r89, not applicable. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 311 of 1959. Appeal from the judgment and order dated October 31, 1955, of the Travancore Cochin High Court, Erna- kulam, in Original Petition No. 75 of 1955. A. N. Kripal and D. Gupta, for the appellant. Sardar Bahadur, for the respondent. 1960. December 13. The Judgment of the Court was delivered by 238 SUPREME COURT REPORTS [1961] KAPUR, J.
-This is an appeal pursuant to a certifi- ne Income-ta• cate of the High Court Of Kerala against the judg- Officer, Alwaye ment and order of that court and the question for v. . decision is the applicability of s. 35 of the Indian The Asok Tt>t:'es Income-tax Act (hereinafter termed the 'Act'). Ltd. , Alwaye Th r t I · h h · · h 1 e 1ac s w uc ave given nse to t e appea are Kapu 1 ;. these: The respondent is a limited company which owns a spinning mills at Alwaye. It commenced busi- ness in January, 1951, and its first accounting year ended on December 31, 1951, and the relevant assess- ment year is 1952-53. It filed its return showing an income Rs. 3,21,284 without taking into account the amount allowable under s. 150 of the Act. On Febru- ary 2, 1953, the net assessable income of the respon- dent was determined at Rs. 1,47,083 after deducting Rs. l,79,081 under s. 15C. The respondent however declared a dividend of Rs. 4,72,415 which attracted the application of s.
2 of the Finance Act, 1952, read with Part 13, proviso (ii) of First Schedule and thus it became liable to the payment of additional income tax and this fact was overlooked by the Income-tax Offi- cer. After giving. notice under s. 35 of the Act, the Income-tax Officer by an order dated January 25, 1954, rectified this error and imposed an additional tax at the rate of one anna in the rupee. He later discovered that this was also erroneous and the rate should have been 5 annas in a rupee. By an order dated August 12, 1954, he rectified the error. Under s. 18A, advance income tax had to be paid and the rAspondent com- pany had deposited only Rs. 5,000 and therefore be- came liable to penal interest under s. 18A(8) of the Act. By the same order this omission to impose penal interest was corrected and this error was thus recti- fied. Against this order the respondent company went in revision under 0 11; 33A(2) to the Commissioner of In- come-tax but the revision was dismissed.
Thereupon the respondent co>mpa. ny filed a petition in the High Court of Kera. la. under Art. 226 of the Constitution on the ground that s. 35 of the Act did not apply and that on the merits additional tax could not be impos- ed. The High Court by its judgment dated October 31, T l ' 3 S. C. R. SUPREME COURT REPORTS 239 1955, held that the orders made were without jurisdic- I960 tion and therefore granted a writ of certiorari quash- d 0 The lncomeMla~ ing the or ers and the Income. tax fficer has brought Officer, Alwaye this appeal pursuant to a certificate of that High •. Court. Th~ Asvk 1·e~tiles According to the High Court, s. 35 of the Act was a Ltd. , Alwaye provision for rectification of "mistakes apparent on the record" and in the opinion of the High Court it }(apur f. was a mistake analogous to 0. 47, r. 1 of the Code of Civil Procedure for grant of review on the ground of mistake or error apparent on the face of the record and it construed it in the following words:- "i. e.
an evident error which does not require any extraneous matter to show its incorrectness'. The error may be one of fact but is not limited to mat- ters of fact and include also errors of law. But the law must be definite and capable of ascertainment. An erroneous view of law on a debatable point or a wrong exposition of the law or a wrong application of the law or a failure to apply the appropriate law cannot be considered a mistake or error apparent on the face of the record. See Chita. ley's C. P. C. Col. III pp. 3549-50, 5th edition. " On the ground that the applicability of proviso (ii) of Part B of the First Schedule of the Finance Act was a complex question which could not be said to be "apparent on the face of the record", the High Court held that the necessary foundation for the exercise of the powers under s. 35 had not been la. id and there- fore the Income-tax Officer had no jurisdiction to make the order that he did.
The High Court also held that the levy of penal interest under s. 18A(8) of the Act for failure to make ad va. nce deposit under s. 18A(3) was also without jurisdiction. The learned Judges of the High Court seem to have fallen into an error in equating the language and scope of s. 35 of the Act with that of 0. 47, r. 1, Civil Procedure Code. The language of the j;wo is different because according to s. 35 of the Act which provides for rectification of mistakes the power is given to the various income-tax authorities within four yea. rs from the date of any assessment passed by them to rectify 240 SUPREME COURT REPORTS [1961] '9 60 any mistake "apparent from the record" and in the The 1 ,,, 0 • . ,. 1 . , Civil Procedure Code the words are "an error appa- Officer. Alway• rent on the face of the record" and the two provisions v, do not mean the same thing. This court in Maharana Th• Asok Te•liles MillB (Private) Ltd. v. Income-tax Officer, Porbandar (') Ltd.
, Alway• has laid down the scope of s. 35 at p. 358 in the i ] 40 I. T. R. q2. (2) [196a] 40 l. T. R. 184. (3)[1g6a]40 I. T. R. 189. ffapur ]. 242 SUPREME COURT REPORTS I [1961] 1960 Finance Act was not applicable in that case. In the The Income-ta• second there was no profit in any preceding year and Officer, Alwaye therefore the fiction failed because it postulates that v. there should be undistributed profits of one or more ' Asok Textiles years immediately preceding the previous year. In Lid. , Alway• the third case also the Finance Act was inapplicable Kapu. J. because the additional tax was not properly laid upon the total income and what was actually taxed was never a part of the total income of the previous year. z960 De&ember 13. In our opinion the order of the High Court was erroneous. We therefore allow this appeal and set aside the judgment and order of the High Court with costs in this court and in the High Court. Appeal allowed. DIAMOND SUGAR MILLS LTD. , AND ANOTHER v.
THE STATE OF UTTAR PRADESH AND ANOTHER (JA. FER IMAM, J. L. KAPUR, K. c. DAS GUPTA, RAGllUIIAR DAYAL and N. RAJAGOPALA AYYANGAR, JJ,) Sugar Cane-Imposition of cess-Enactment taxing entry of cane into factory-Constitutionality of-"LocaJ, areli', Connotati011 of-Constitution of India, Sch. VII, Lisi II, Entry 52-U. P. Sugarcane Gess Acl, z956 (U. P. XXII of z956), s. 3. Entry 52 of List II of the Seventh Schedule to the Constf- tution empowered State Legislatures to make a Jaw relating to "taxes on the entry of goods into a local area for conswnptioa, use or sale therein". The U. P. Legislature passed the U. P. Sugarcane Cess Act, 1956, which authorised the State Govern- ment to impose a cess on the entry of cane into the premises of a factory for use, consumption or sale therein. The appellant contended that the premises of a factory was not a 'local area' within the meaning of Entry 52 and the Act was beyond the competence of the legislature.
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