Letters Patent appeal and valid service by affixation: writ order was appealable, but notice under section 34 failed for lack of due diligence.

An order under article 226 can be a judgment appealable under clause 15 of the Letters Patent where it finally determines a right or liability in the writ proceeding itself, even if the assessment remains pending; the court held an appeal lay. Service of notice under section 34 by affixation was invalid because affixation under Order V rules 15 and 17 is permissible only after due and reasonable diligence has failed to locate the person to be served; mere absence at the address was insufficient. As valid service was not established, the further assessment step based on that notice was without jurisdiction, and restraining relief was granted.

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Issues: (i) whether the order under article 226 determining the validity of service of notice under section 34 of the Income-tax Act was a judgment appealable under clause 15 of the Letters Patent; (ii) whether service of the notice under section 34 was valid in law, so as to sustain further assessment proceedings.

Issue (i): whether the order under article 226 determining the validity of service of notice under section 34 of the Income-tax Act was a judgment appealable under clause 15 of the Letters Patent.

Analysis: A judgment under clause 15 is one which affects the merits of the question between the parties by determining some right or liability. The proceeding under article 226 was an independent proceeding in which the right of the Income-tax Officer to continue assessment on the basis of the alleged service of notice was directly in issue and finally determined. The fact that the assessment proceeding itself remained pending did not prevent the High Court order from determining the right or liability raised in the writ proceeding.

Conclusion: The order was a judgment within clause 15 and an appeal lay.

Issue (ii): whether service of the notice under section 34 was valid in law, so as to sustain further assessment proceedings.

Analysis: Under section 63 of the Income-tax Act, notice may be served as a summons under the Code of Civil Procedure. Under Order V, rules 15 and 17, affixation is permissible only after the serving officer cannot find the defendant despite due and reasonable diligence. Mere absence at the address, without proper inquiry or attempts to trace the person, is insufficient. On the affidavit before the court, the requirement that the assessee could not be found was not established, so service by affixation was invalid. Consequently, the subsequent step taken on the assumption of valid service under section 34 lacked jurisdiction.

Conclusion: The service was invalid and the further notice issued on that assumption was without jurisdiction.

Final Conclusion: The appeal succeeded, the order of the court below was set aside, and mandamus relief was granted restraining further action founded on the invalid service.

Ratio Decidendi: For an appeal under clause 15 of the Letters Patent, the order must determine a right or liability in the proceeding itself; and service by affixation under the Code of Civil Procedure is valid only when the serving officer has been unable to find the person to be served after due and reasonable diligence.

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