Full Judgment Text
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PETITIONER:
DIRECTOR OF INSPECTION OF INCOME TAX(INVESTIGATION) NEW DELH
Vs.
RESPONDENT:
POORAN MAL & SONS & ANOTHER
DATE OF JUDGMENT20/09/1974
BENCH:
ALAGIRISWAMI, A.
BENCH:
ALAGIRISWAMI, A.
REDDY, P. JAGANMOHAN
CITATION:
1975 AIR 67 1975 SCR (2) 104
1975 SCC (4) 568
CITATOR INFO :
R 1980 SC 485 (13)
R 1980 SC 656 (7)
ACT:
Income-Tax Act, 1961, Section 132(5)-Attachment of silver
bars in the banks-Writ proceedings ending in a consent
order-Fresh enquiry by the Income-Tax Officer-Respondents
challenging the order as one passed beyond the period of
ninety days-Respondents deriving benefit under sec. 132(5),
if could waive the benefits.
lncome-Tax Act, 1961, Sub-sections (5), (11) and (12) of
Section 132 --Income-Tax Officer deciding to whom property
seized belongs-Initial order and subsequent order in
consequence of directions from High Const-If should be
within ninety days.
Income-Tax Act, 1961, Section 132(3)-Order attaching the
silver bars in the batiks-Income Tax Officer deciding to
whom they belong-Order, if can be questioned under sec.
132(5)-When can High Court order return of the silver bars.
HEADNOTE:
On an authorisation issued by the Director of Inspection,
Pooran Mal’s residence and business premises in Delhi were
searched in October 1971. His premises in Bombay were also
searched. On a search made in the Branch offices of Laxmi
Commercial Bank and the Punjab National Bank 84 silver bars
in the former bank were attached under sec. 132(3) of the
Income-Tax Act, 1961, and similarly 30 silver bars in the
other bank were attached. Pooran Mal v. Director of
Inspection [1974] 1 S.C.C. 345, the Supreme Court upheld the
constitutional validity of sec. 132 and the search and
seizure were also held to be legal. Thereafter, respondent
1, the firm, of which Pooran Mal was a partner and
respondent 2, another partner of the same firm, filed writ
Petition No. 829 of 1972 challenging the order of the
Income-Tax Officer dated 12- 1-1972. This Writ Petition was
disposed of on 6-4-1972 on the, basis of the consent of the
parties. The order recited that the parties are agreed that
the impugned order be quashed and that the Department be
Permitted to look into the matter a-fresh after giving an
opportunity to the petitioner to place his case before the
Department in respect of the contention that the property
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belongs to the firm and not to Pooran Mal individually.
After enquiry., the Income-Tax Officer passed an order on 5-
6-1972 holding that the silver bars belonged to Pooran Mal,
the individual and not the 1st respondent firm. Respondents
1 and 2 thereafter filed Civil Writ Petition No. 595 of 1972
contending that the silver bars belonged to the 1st
respondent firm and that the order of the Income-Tax Officer
holding that they represented the undisclosed income of
Pooran Mal individual was illegal. It was also contended
that the Income-Tax Officer had no jurisdiction to pass the
impugned order beyond the period prescribed in sec. 132(5).
The second contention found favour with the learned Judges
of the High Court.
In this appeal it was contended by the appellants : (i)
Section 132(5) is for the benefit of the person concerned
and it is competent for him to waive this benefit. The
respondents waived the benefit by the consent order and by
appearing before the Income-Tax Officer and leading
evidence; and (ii) The period of time applies only to the
initial order and not to any subsequent order that may be
directed under sec. 132(12) or by a Court in writ proceed-
ings.
HELD: (1) The period of limitation is one intended for
the benefit of the person whose property has been seized.
It is open to him to waive it. To hold that the period of
ninety days which is mentioned in see. 132(5) is
105
an immutable one would cause more injury to the citizen than
to the Revenue. It is, therefore, open to the aggrieved
person, as happened in this case, to agree to a fresh
disposal of the case by the Income-Tax Officer and thereby
waive the period of limitation. It is not a case of the
parties conferring jurisdiction on the Income-Tax Officer by
consent. It is a case where the parties agreed to a
particular mode of exercise by the Income-Tax Officer of a
jurisdiction which he cannot be said to have lost or in
respect of which he has become functus officio. Though it
is true that on passing an order under sec. 132(5) the
Income-tax Officer can be said to have become functus to, it
is the court’s order that revives his powers and
jurisdiction. it follows, therefore, that as the High Court
did not go into the question of correctness or otherwise of
the fresh order of the Income-Tax Officer, it was not
competent for the High Court to order the return of the 114
bars of silver to the 1st respondent. [111 C; H; 113 F]
Wilson v. Mc Intosh [1894] AC 129; Phillip v. Martin 11
N.S.W.L.R. 153; and Wright v. John Bagnall & Sons Ltd.
[1900] 2 QB 240, referred to.
(ii) Even if the period of time fixed under sec. 132(5) is
held to be mandatory that was satisfied when the first order
was made. Thereafter, if any direction is given under sec.
132(12) or by a court in writ proceedings, as in this case,
it cannot be said that an order made in pursuance of such a
direction would be subject to the limitations prescribed
under sec. 132(5). Once the order has been made within
ninety days, the aggrieved person has got the right to
approach the notified authority under sec. 132(11) within
thirty days and that authority can direct the Income-Tax
Officer to pass a fresh order. The contention that even
such a fresh order should be passed within ninety days,
would make the subsections (11) and (12) of section 132
ridiculous and useless. It cannot be said that what the
notified authority could direct under sec. 132 could not be
done by a court which exercises its powers under Art. 226 of
the Constitution. To hold otherwise would make the powers
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of courts under Art. 226 wholly ineffective. The Court in
exercising its powers under Art. 226 has to mould the remedy
to suit to the facts of a case. When S. 132(5) permits an
Income-Tax Officer to pass an order within ninety days that
power cannot in any way be whittled down by a rule made
tinder that section. [108 H; 109 A-B; G]
C.I.T. v. Ramesh Chancter, 93 ITR 450 (478) approved and
Ramibliai Kalidas v. I. G. Desai, I.T.O. 80 ITR 721, not
approved.
It is true that there is no equity about a tax. But that
does not necessarily mean that every provision of a taxing
statute will fall within this rule. ’There is no doubt that
there is no equity about limitation. Naturally after the
period of limitation has expired no proceedings can be taken
to assess nor could any period of limitation laid down by
the Act be extended merely by a superior tribunal directing
an inferior tribunal to make an assessment or to take
proceedings which result in assessment after the period of
limitation is over. They are not in pari materia with the
present proceedings. In deciding to whom any property
seized under sec. 132(1) belongs the income-Tax Officer
cannot be said to be exercising any powers of taxation. He
is not deciding the question of taxing a person after the
period prescribed therefore is over. He is really deciding
to whom the property seized belongs and to such a case the
provisions of ordinary law which deals with tribunals and
courts which decide the questions of title to properties
should be deemed to apply. This is not a case where equity
is relied upon to tax a person who is not otherwise liable
to be taxed. It is a general principle applicable to all
judicial proceedings. [110 G-H; III A-B]
Cope Brandy Syndicate v. Inland Revenue Commissioners [1921]
1 KB 64, 71 and Commissioner of Income-Tax v. Ajax Products
Ltd. 55 ITR 741., 747, referred to.
HELD FURTHER, (iii) In this case the silver bars were not
seized from the, respondents tinder S. 132(1) but were
attached under S. 132(3). The first
106
respondent firm cannot, therefore, question the order of the
Income-Tax Officer on the ground that it was passed after
three months period laid down by s. 132(5), nor was it
permissible for the High Court to order- return of the
silver bars to the 1st respondent firm. It had not even
gone into the question whether the Income-tax Officer’s
decision on the question of owner-ship of silver bars was
correct or not- [14C-D]
Lokelnath Tolaram v. B. N. Rangwani A.I.R. 1974 S.C. 150.
referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1118 of
1974.
Appeal by Special Leave from the Judgment & Order dated the
30th November, 1973 of the Delhi High Court in Ref. C.W.
No. 595 of 1972.
F. S. Nariman, Addl. Sol. General of India, G. L. Sanghi
and S. P. Nayar, for the appellants.
N. D. Karkhanis and Ram Lai for the respondents.
The Judgment of the Court was delivered by
ALAGIRISWAMI, J.-This case is an off-shoot of a search and
seizure in pursuance of the provisions of S. 132 of the
Income-tax Act, 1961 dealt with in the decision-of this
Court in Pooran Mal v. Director of Inspection(1). One of
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the cases there dealt with was Writ Petition No. 446 of 1971
filed by one Pooran Mal. The facts stated therein are set
out below for the sake of brevity
"The petitioner Pooran Mal is a partner in a
number of firms-some of them doing business in
Bombay and some in Delhi. His permanent
residence is 12-A Kamla Nagar, Delhi. His
business premises in Delhi are A-14/16 Jamuna
Bhavan, Asaf Ali Road, New Delhi. It would
appear that on an authorisation issued by the
Director of Inspection, his residence and
business premises in Delhi were searched on
October 15/16, 1971. On the 15th his premises
in Bombay were also searched and at that time
it appears the petitioner was present in
Bombay........
The search in the business premises was made
when a number of persons who usually worked
there were present. Books of account,
documents, some jewellery and a large amount
of cash amounting to about Rs. 61,000 were
seized.
On October 16 there was a search in the Branch
Offices of Laxmi Commercial Bank and the
Punjab National Bank. 84 silver bars were
seized from Laxmi Commercial Bank and 30
silver bars were seized from the Punjab
National Bank." (It appears that the bars
themselves were not actually seized but were
only attached under the provisions of sub-s.
(3) of s. 1 3 2 of the Income-tax Act, 1961).
"The value of these silver bars comes to
nearly 18 lakhs. It is the case of the
petitioner that these bars belong to M/s.
Pooranmal and Sons of Bombay
(1) [1974] 1 S. C. C. 345.
107
who sent the same to the Motor and General
Finance Company of which the petitioner is a
partner and this Finance Company, it is
alleged, kept these bars with the two banks.
84 bars were kept in the account of M/s. Udey
Chand Pooranmal for an alleged overdraft limit
while the 30 silver bars were pledged with the
Punjab National Bank in the account of the
Finance Company. In all these aforesaid firms
the petitioner is a partner and it is the
Department’s case that all these bars are the
undisposed assets of the petitioner. It
appears that the Income-tax Officer made a
summary enquiry as required by Section 132(5)
after issuing notice to the petitioner and his
order dated January 12, 1972 shows, of course
prima facie, that all the assets which had
been seized in the house, the business
premises and the banks, except for the value
of the ornaments declared by Mrs. Sharda Devi
in her Wealth Tax Return, had to be retained
for being appropriated against tax dues from
1969 onwards which amounted to nearly 42
lakhs. Indeed this prima facie liability was
subject to regular assessment and re-
assessment."
In the case dealt with earlier by this Court the
constitutional validity of s. 132 and legality of the search
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and seizure alone were under consideration. This Court held
the provisions ’valid and the search and seizure legal.
Thereafter respondent 1, which is a firm of which Pooran Mal
was a partner, and respondent 2, who claims to be another
partner of the 1st respondent firm, filed Writ Petition No.
82 of 1972 challenging the order of the Income-tax Officer
dated 12-1-1972. This writ petition was disposed of on 6-4-
1972 on the basis of the consent of the parties. The
relevant portion of the order is as follows :-
"Mr. G. C.. Sharma, learned counsel appearing
for the respondents, fairly and frankly
conceded that such an opportunity was not
afforded to the petitioner. The parties are
agreed that the impugned order be quashed and
that the Department be permitted to look into
the matter afresh after giving an opportunity
to the petitioner to place his case before the
Department in respect of the contention that
the property belongs to the firm and not to
Pooran Mal individually.
The parties are also agreed that the property
shall remain in the custody of the Department
and shall not be sold by them till fresh
decision is taken by the Department in the
light of evidence to be supplied by the
parties.
Mr. B. S. Gupta, Income-tax Officer-cum-
Assistant Director of Inspection
(intelligence) is present and he has under-
taken to complete this case within two months.
The writ is accordingly accepted and disposed
of in terms of the submissions of the parties
referred to above, but with no order as to
costs."
108
In that writ petition the contention of the petitioners was
that the silver bars were the property of the 1st respondent
firm and not that of Pooran Mal the individual who was only
one of the partners. After the disposal of the writ
petition the Income-tax Officer duly held a fresh enquiry
and passed an order on 5-6-1972 holding that the silver bars
belonged to Pooran Mal the individual and not to 1st
respondent firm. Respondents 1 and 2 thereafter filed Civil
Writ Petition No. 595 of 1972, out of which this appeal
arises, contending that the silver bars belonged to the 1st
respondent firm and that the order of the Income-tax Officer
holding that they represented the undisclosed income of
Pooran Mal the individual was illegal. It was also
contended that the Income-tax Officer had no jurisdiction to
pass the impugned order beyond the period prescribed in sub-
s. (5) of s. 132. This second contention found favour with
the learned Judges of the High Court. As a result they set
aside the order of the Income-tax Officer dated 5-6-1972 and
ordered the return of the 114 silver bars to respondents 1
and 2.
Before us the learned Additional Solicitor General put
forward five contentions :
1. Section 132(5) is for the benefit of the
person concerned and it is competent for him
to waive this benefit. The petitioners waived
the benefit by the consent order and by
appearing before the Income-tax Officer and
leading evidence.
2. Period of time runs from the date of
seizure and on a true construction of the
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order it is a new seizure.
3. The period of time applies only to the
initial order and not to any subsequent order
that may be directed under s. 132(12) or by a
Court in writ proceedings.
4. The period of time is directory and not
mandatory, and finally.
5. The order for return of the silver bars
was also illegal on the ground that only
properties seized under the provisions of s.
132(1) could be ordered to be released and not
property which has been attached under s.
132(3) as in this case.
In the view we take of the matter we think it would be
sufficient to deal with contentions 1 and 3. We do not,
therefore, propose to consider the question whether the
period of time provided in s. 132(5) is directory or
mandatory nor the other two questions.
Even if the period of time fixed under s. 132(5) is held to
be mandatory that was satisfied when the first order was
made. Thereafter if any direction is given under s. 132(12)
or by a Court in writ proceedings, as in this case, we do
not think an order made in pursuance of such a direction
would be subject to the limitations prescribed under S.
132(5). Once the order has been made within ninety days the
aggrieved person has got the right to approach the notified
authority under s. 132(11) within thirty days and that
authority can direct the
109
Income-tax Officer to pass a fresh order. We cannot accept
the contention on behalf of the respondents that even such a
fresh order should be passed within ninety days. It would
make the sub-sections (11) and (12) of s. 132 ridiculous and
useless. It cannot be said that what the notified authority
could direct under s. 132 could not be done by a Court which
exercises its powers under Article 226 of the Constitution.
To hold otherwise would make the powers of courts under
Article 226 wholly ineffective. The Court in exercising its
powers under Article 226 has to mould the remedy to suit the
facts of a case. If in a particular case a Court takes the
view that the Income-tax Officer while passing an order
under s. 132(5) did not give an adequate opportunity to the
party concerned it should not be left with the only option
of quashing it and putting the party at an advantage even
though it may be satisfied that on the material before him
the conclusion arrived at by the Income-tax Officer was
correct or dismissing the petition because otherwise the
party would get unfair advantage. The power to quash an
order under Article 226 can be exercised not merely when the
order sought to be quashed is one made without jurisdiction
in which case there can be no room for the same authority to
be directed to deal with it. But in the circumstances of a
case the Court might take the view that another authority
has the jurisdiction to deal with the matter and may direct
that authority to deal with it or where the order of the
authority which has the jurisdiction is vitiated by
circumstances like failure to observe the principles of
natural justice the Court may quash the order and direct the
authority to dispose of the matter afresh after giving the
aggrieved party a reasonable opportunity of putting forward
its case. Otherwise, it would mean that where a Court
quashes an order because the principles of natural justice
have not been complied with it should not while passing that
order permit the Tribunal or the authority to deal with it
again irrespective of the merits of the case. A Division
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Bench of the Punjab High Court in C.I.T. v. Ramesh
Chander(1) took the view that what the notified authority
could do under s. 132(12) a Court could do in writ
proceedings. Though the observation was obiter we consider
that it is correct. In this connection we must refer to the
decision of the Gujarat High Court, relied upon by the
respondents, in Ramjibhai Kalidas v. I. G. Desai, I.T.O.(2).
In that case it was held that Rule 112A, which provides that
a show cause notice in respect of an inquiry under s. 132(5)
is to be made within 15 days from the date of the seizure,
is mandatory and if that is not done no order under s. 132
(5) can be passed. It seems to have been admitted before
the Bench by the Advocate General who appeared on behalf of
the Revenue that he did not dispute that the period of
ninety days prescribed under s. 162 (5) is a mandatory
period. That decision is, therefore, no authority for the
proposition that the period fixed under section 132(5) is
mandatory. But even if it were the decision that Rule 112A
is also mandatory is clearly erroneous. ’When s. 132(5)
permits an Income-tax Officer to pass an order within ninety
days that power cannot be in any way whittled down by a rule
made under that section.
On behalf of the respondents a number of decisions were
relied upon for contending that no equitable consideration
should enter into in de-
(1) 93 I. T. R. 450,478.
(2) 80 I. T. R. 721.
110
ciding the matter. Reliance was placed on the observations
of Rowlatt J. in Cape Brandy Syndicate v. Inland Revenue
Commissioner(1) referred to with Approval in the decision in
Commr. of Income Tax V. Ajax Products Ltd(2), that :
"In a taxing Act one has to look merely at
what is clearly said. There is no room for
any intendment. There is no equity about a
tax. There is no presumption as to a tax.
Nothing is to be read in, nothing is to be
implied. One can only look fairly at the
language used."
We do not consider that every provision of a taxing statute
will fall within this rule. The question whether a certain
provision of law is directory does not fall to be decided on
different standards because it is found in a taxing statute.
There is no rule that every provision in a taxing statute is
mandatory. The strict construction that a citizen does not
become liable to tax unless he comes within the specific
words of a statute is a different proposition. That a
person cannot be taxed on the principle of estoppel does not
admit of much argument. Article 265 of the Constitution
lays down that no tax shall be levied except when authorised
by law.
It was also argued based on Explanation 1 to s. 132 and
similar provision in certain other sections which lay down
that in computing the period of limitation any period during
which any proceeding is stayed by an order or injunction of
any court shall be excluded, that where it is intended that
the period of limitation prescribed by any of the provisions
of the Income-tax Act should not be strictly enforced the
law itself makes a specific provision. It is a well
established principle of, judicial procedure that where any
proceedings are stayed by an order of a Court or by an
injunction issued by any Court that period should be
excluded in computing any period of limitation laid down by
law. Especially after the Limitation Act 1963, the
provisions of which are now applicable to all proceedings, a
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provision like Explanation 1 to s. 132 is superfluous and no
argument can be based on it.
Reference was made to various decisions of the various
Courts which have held that the particular period of
limitation under consideration by the Court should be
strictly construed. There is no doubt that there is no
equity about limitation. Most of the decisions relied on
relate to provisions which laid down a period of limitation
for taking one kind of action or other in order to assess to
tax the person concerned. Naturally after the period of
limitation has expired no proceedings can be taken to assess
nor could any period of limitation laid down by the Act be
extended merely by a superior tribunal directing an inferior
tribunal to make an assessment or to take proceedings which
result in assessment after the period of limitation is over.
They are not in pari materia with the present proceedings.
In deciding to whom any property seized under s. 132(1)
belongs the Income-tax Officer cannot be said to be
exercising any powers of taxation. He is not deciding the
question of taxing a person after the period prescribed
therefore is over.
(1) [1921] 1 K. D. 64, 71.
(2) 55 1 T. R. 741, 747.
111
He is really deciding to whom the property seized belongs
and to such a case the provisions of ordinary law which
deals with tribunals and courts which decide the questions
of title to properties should be deemed to apply. This is
not a case where equity is relied upon to tax a person who
is not otherwise liable to be taxed. It is a general
principle applicable to all judicial proceedings.
But the most important principle on the basis of which the
order of the Income-tax Officer should be upheld is that it
is in pursuance of an agreement between the parties which
has obtained the imprimaturs of the Court that this order
has been made. The period of limitation is one intended for
the benefit of the person whose property has been seized.
It is open to him to waive it. We consider that to hold
that the period of ninety days which is mentioned in s.
132(5) is an immutable one would cause more injury to the
citizen than to Revenue. It is, therefore, open to the
aggrieved person, as happened in this case, to agree to a
fresh disposal of the case by the Income-tax Officer and
thereby waive the period of limitation.
Even apart from the consent of the parties it was open to
the Court in Writ Petition No. 82 of 1972 to have set aside
the earlier order of the Income-tax Officer and directed a
fresh disposal of the matter by the Income-tax Officer on
the ground which was in fact agreed to by the parties, that
the aggrieved party had no reasonable opportunity of putting
forward its case. It was within its powers to do so. If
respondents 1 and 2 wanted to urge that the order of the
Income-tax Officer impugned in W.P. 82 was liable to be set
aside as they had no reasonable Opportunity to put forward
their case they could have done so. They need not have
agreed to the matter being considered afresh. The Court
would in any case have passed such an order. Having agreed
and thus, persuaded the Court to direct the Income-tax
Officer to pass a fresh order respondents 1 and 2 cannot
question the order of the Income--tax officer on the basis
of such direction. They should be deemed to be estopped
from so contending. They had by their consent made the
Income-tax Officer to put himself at a disadvantage, because
he is now iced with the contention that he had no
jurisdiction to pass a fresh order. Furthermore, it is not
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a case of the Court conferring jurisdiction on the Income-
tax Officer to decide a case after be had lost jurisdiction
over the matter. The procedure from the date of seizure to
the date of the second order of the Income-tax Officer is an
integrated process. Though a proceeding under Article 226
is an original proceeding and not by way of an appeal
against the order of a Court or of Tribunal, it is part and
parcel of our established judicial procedure and to treat it
as though it were something outside the normal procedure and
not part of an integrated whole would be wholly unrealistic.
It is, therefore, possible for the parties to agree to a
fresh disposal by the Income-tax Officer even as the Court
would have ordered. It is also not a case of the parties
conferring jurisdiction on the Income-tax Officer by con-
sent. It is a case where the parties agreed to a particular
mode of exercise by the Income-tax Officer of a jurisdiction
which he cannot be said to have lost or in respect of which
he has become functus officio. Though it is true that on
passing an order under s. 132(5) the Income-tax Officer can
be said to become functus officer it is the Court’s order
that revives his powers and jurisdiction.
112
We also find ourselves unable to accept the contention on
behalf of the respondents that the order contemplated to be
passed by the Income-tax Officer after the fresh inquiry in
pursuance of the order of the High Court in W.P. No. 82 of
1972 was not necessarily an order under s. 132(5). It was
an order under s. 132(5) that was impugned before the High
Court. It was that order that was set aside by consent. It
was the subject matter of that order which had to be
considered by the Income-tax Officer after giving a fresh
opportunity to the petitioners and a new order passed. It
could not therefore be anything but an order under S. 132(5)
that was under contemplation when the consent order was
passed by the High Court in W.P. No. 82 of 1972.
We may in this connection refer to the decision in Wilson v.
McIntosh(1). In that case an applicant to bring lands under
the Real Property Act filed his case in Court under s. 21,
more than three months after a caveat had been lodged, and
thereafter obtained an order that the caveator should file
her case, which she accordingly did. It was held that he
had thereby waived his right to have the caveat set aside as
lapsed under S. 23. The Privy Council held that the
limitation of time contained in S. 23 was introduced for the
benefit of the applicant, to enable him to obtain a speedy
determination of his right to have the land brought under
the provisions of the Act and that it was competent for the
applicant to waive the limit of the three months, and that
he did waive it by stating a case and applying for and
obtaining an order upon the appellant to state her case,
both which steps assumed and proceeded on the assumption of
the continued existence of the caveat. They referred with
approval to the decision in Phillips v. Martin(2) where the
Chief Justice said :
"Here there is abundant evidence of waiver,
and it is quite clear that a man may by his
conduct waive a provision of an Act of
Parliament intended for his benefit. The
caveator was not brought into Court in any way
until the caveat had lapsed. And now the
applicant, after all these proceedings have
been taken by him, after doubtless much
expense has been incurred on the part of the
caveator, and after lying by and hoping to get
a judgment of the Court in his favour, asks
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the Court to do that which but for some
reasons known to himself he might have asked
the Court to do before any other step in the
proceedings had been taken. I think he is
altogether too late. It is to my mind a clear
principle of equity, and I have no doubt there
are abundant authorities on the point, that
equity will interfere to prevent the machinery
of an Act of Parliament being used by a person
to defeat equities which he has himself
raised, and to get rid of a waiver created by
his own acts."
These principles will apply exactly to the facts of this
case.
In Wright v. John Bagnall & Som Ltd.(1), a case arising
under the Workmen’s Compensation Act, 1897 which requires
the claim for corn-
(1) [1894] A. C. 129.
(2) 11 N. S.W. L. R. 153.
(3) [1900] 2 Q. B. 240.
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pensation to be made within six months of the occurrence of
the accident causing the injury, it was held that
"An agreement arrived at between the parties
shortly after the accident that there is a
statutory liability on the employer to pay
compensation, the amount of compensation being
left open for future settlement, is evidence
upon which the judge or arbitrator may
properly find that the employer is estopped
from setting up the defence that the request
for arbitration was not filed within six
months of the accident."
The agreement between the parties in this case that the
Income-tax Officer may pass a fresh order within two months
of the order of the High Court is an agreement which
proceeded on the basis that the Income-tax Officer bad
jurisdiction to pass a fresh order. The principle of these
decisions is also stated in Craies on Statute Law (6th Edn.)
at page 369 as follows :
"As a general rule, the conditions imposed by
statutes which autborise legal proceedings are
treated as being indispensable to giving the
court jurisdiction. But if it appears that
the statutory conditions were inserted by the
legislature simply for the security or benefit
of the parties to the action themselves, and
that no public interests are involved, such
conditions will not be considered as
indispensable, and either party may waive them
without affecting the jurisdiction of the
court."
There is no question of the period of limitation in section
132(5) involving public interests. It is intended for the
benefit of the parties.
We are, thus, satisfied that as the period of limitation
prescribed by s. 132(5) is intended for the benefit of
persons like the respondents, it is competent for them to
waive it, that the respondents have in fact waived it, and
the order of the High Court in W.P. No. 82 of 1972 is a
consequence of such waiver, that the Income-tax Officer had,
therefore, the jurisdiction to pass a fresh order. It
follows, therefore, that as the High Court did not go into
the question of the correctness or otherwise of the fresh
order of the Income-tax Officer that the property belonged
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to Pooran Mal the individual and not to the 1st respondent
firm, it was not competent for the High Court to order the
return of the 1 14 bars of silver to the 1st respondent
firm.
There is still another reason why the order of the kind
which the High Court made could not be made. We may refer
to the decision of this Court in Loke nath Tolaram v. B. N.
Rangwani(1). There certain goods were seized from the
possession of the appellants. They filed a petition
challenging the legality of the order of the Excise autho-
rities granting extension of time to serve notice under s.
124(a) of the Customs Act, 1962 after the expiry of the
period of six months from the date of seizure. During the
pendency of the petition the appellants in pursuance of
consent orders deposited certain securities with Excise
Authorities and executed bonds in their favour and obtained
release of
(1) A.T.R. 1974 S. C. 150.
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the seized goods. The appellants also agreed that in the
event of their, failure in the writ petition the securities
deposited shall be treated as sale proceeds of the said
goods and treated as goods so seized for the purpose of any
adjudication proceedings. They further agreed that they
shall not raise any contention in the adjudication
proceedings that the said proceedings will not be valid on
the ground that the goods have been released to the
appellants and are not available for confiscation or
imposition of fine in lieu of confiscation. It was held
that the consent terms operated as a waiver of notice for
extending time within six months of the seizure of goods.
It was also held that the appellants had no locus standi to
ask for release of the goods because the Bank was in
possession of the goods as the pledgee and the Excise
Authorities seized the goods from the possession of the
Bank. In this case we have al’ready mentioned that. the
silver bars were not seized from the respondents under s.
132(1) but were attached Under S. 132(3). The 1st
respondent firm cannot, therefore, question the order of the
Income-tax Officer on the ground that it was passed after
the three months’ period laid down by S. 132(5), nor was it
permissible for the High Court to order return of the silver
bars to the 1st respondent firm. It had not even gone into
the question whether the Income-tax Officer’s decision on
the question of ownership of the silver bars was correct or
not.
The appeal is, therefore, allowed and the judgment and order
of the High Court set aside. The High Court will not deal
with the other contentions raised in the Writ Petition.
Appeal allowed.
V.M.K.
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