Civil suit barred by income-tax exclusivity where declarations and injunctions would nullify assessment and recovery proceedings.

Section 67 of the Indian Income-tax Act, 1922 barred civil suits that directly or in substance sought to set aside an assessment or defeat recovery proceedings under the Act. Reliefs framed as declarations of non-liability and injunctions against recovery were treated as an attempt to nullify assessment and recovery steps, which had to be challenged through the statutory appellate and revisional machinery. Alleged defects in notice, service, timing, or recovery procedure were treated as procedural irregularities, not a total absence of jurisdiction. The civil suit was therefore not maintainable.

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Issues: Whether a civil suit was barred by section 67 of the Indian Income-tax Act, 1922 when the plaintiff sought declarations and injunctions which, in substance, would nullify assessment and recovery proceedings taken under the Act.

Analysis: Section 67 prohibits civil suits that directly or in substance seek to set aside or modify an assessment made under the Act. The reliefs claimed, though framed as declarations of non-liability and invalidity of the recovery process, would effectively undo the assessment orders and recovery steps. The Act vested the income-tax authorities with authority to determine the relevant partnership and liability questions, and any alleged defect in notice, service, timing, or recovery procedure was a matter for the appellate and revisional machinery provided by the statute. Mere error, irregularity, or even an erroneous determination did not amount to a total absence of jurisdiction so as to permit a civil suit.

Conclusion: The suit was barred by section 67 of the Indian Income-tax Act, 1922 and was not maintainable in the civil court.

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