Statutory tax recovery as arrears of land revenue bars collateral challenge to the assessment in recovery proceedings.
Where sales tax and penalty are statutorily recoverable as arrears of land revenue, the certificate procedure under the Revenue Recovery Act is valid and the receiving Collector must enforce it as such. The recovery authority cannot re-open the assessment or test its correctness in collateral recovery proceedings; the taxpayer must use the statutory remedy of payment under protest and suit for repayment where liability is disputed. A challenge that the assessment is a nullity for want of notice or authority also fails where delegation is presumed regular and the assessee had not pursued the remedies provided by the taxing statute. The enforcement machinery was therefore upheld.
Issues: (i) Whether the certificate sent for recovery of the sales tax demand was valid and enforceable under the statutory scheme; (ii) Whether the assessee could, in recovery proceedings, challenge the validity or correctness of the assessment order itself; (iii) Whether the assessment order was a nullity for want of jurisdiction on the grounds of alleged absence of notice and alleged lack of authority in the assessing officer.
Issue (i): Whether the certificate sent for recovery of the sales tax demand was valid and enforceable under the statutory scheme.
Analysis: The demand arose from an assessment under the Bengal Finance (Sales Tax) Act, 1941, and the unpaid tax and penalty were recoverable as arrears of land revenue under section 11(4) of that Act. The Revenue Recovery Act, Central Act 1 of 1890 authorised a Collector to forward a certificate for recovery where an arrear of land revenue or a sum recoverable as such was payable by a defaulter having property in another district. On receipt of the certificate, the collecting authority was bound to recover the amount as if it were an arrear of land revenue accruing in its own district. The use of section 3 in the certificate did not vitiate the recovery process, because section 5 incorporated the machinery of section 3 for sums recoverable as arrears of land revenue, and the Act applied throughout India.
Conclusion: The recovery certificate was held to be valid and enforceable.
Issue (ii): Whether the assessee could, in recovery proceedings, challenge the validity or correctness of the assessment order itself.
Analysis: Section 3(3) of the Revenue Recovery Act, Central Act 1 of 1890 required the receiving Collector to recover the amount stated in the certificate as if it were an arrear of land revenue in his own district. Section 4 provided the remedy of payment under protest followed by a suit for repayment if liability was denied. In that statutory framework, the recovery authority could not sit in appeal over the assessment or re-examine the amount certified as due. Section 7 did not enlarge the defaulter's right to contest the certificate in recovery proceedings.
Conclusion: The assessee could not question the assessment order in the recovery proceedings.
Issue (iii): Whether the assessment order was a nullity for want of jurisdiction on the grounds of alleged absence of notice and alleged lack of authority in the assessing officer.
Analysis: The Act permitted the Commissioner, subject to prescribed restrictions, to delegate powers under section 11 to an officer appointed to assist him, and the rules limited such delegation only by rank. The court accepted the presumption of regularity in respect of the delegation. As to territorial jurisdiction, the existence of a place of business in Calcutta was a jurisdictional fact, but the authority to decide that fact lay with the assessing officer himself in the absence of a contrary statutory provision. The assessee had received a notice of demand and had not pursued the remedies available under the Act to set aside the assessment. In those circumstances, the assessment could not be treated as a nullity in a writ petition under article 226 of the Constitution of India.
Conclusion: The assessment order was not a nullity and the jurisdictional challenge failed.
Final Conclusion: The statutory recovery machinery was properly invoked, and no ground was made out to invalidate the assessment or prevent its enforcement. The writ petition therefore failed.
Ratio Decidendi: Where a tax demand is statutorily made recoverable as arrears of land revenue, the receiving recovery authority must execute the certificate as such and cannot re-open the assessment, while any challenge to the assessment must be pursued through the remedy provided by the governing statute and not in collateral recovery proceedings.
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