1921 (3) TMI 3 - HC - Income Tax

Court Dismisses Application, Highlights Jurisdiction Limits

The Chief Commissioner Of Income Versus The North Anantapur Gold Mines,

The court allowed the appeal and dismissed the application with costs throughout. The High Court lacks jurisdiction to issue an order under Section 45 of ... - Issues Involved:1. Jurisdiction of the High Court under Section 45 of the Specific Relief Act.2. Application of Section 106 of the Government of India Act 1915.3. Interpretation of Section 52 of the Indian Income Tax Act 1918.4. Nature of duty imposed on the Chief Revenue Authority under Section 51 of the Indian Income Tax Act 1918.5. Relevance of English decisions in interpreting Indian statutes.Issue-wise Detailed Analysis:1. Jurisdiction of the High Court under Section 45 of the Specific Relief ActThe appeal concerns an order directing the Chief Commissioner of Income-tax to make a reference to the High Court under Section 51 of the Indian Income Tax Act 1918. The powers conferred by Section 45 of the Specific Relief Act are in lieu of the writ of mandamus. The court concluded that issuing a writ of mandamus is an exercise of original jurisdiction. The substituted jurisdiction under Section 45 is also considered original jurisdiction. Therefore, making the order prayed for would be exercising original jurisdiction in a matter concerning the revenue, which is prohibited by Section 106 of the Government of India Act 1915.2. Application of Section 106 of the Government of India Act 1915Section 106 prohibits the High Court from exercising any original jurisdiction in matters concerning the revenue. This prohibition was historically applied to the Supreme Courts of Bengal, Madras, and Bombay and was re-enacted in the Government of India Act 1915. The court emphasized that the issuing of a writ of mandamus falls within the original jurisdiction and thus is prohibited by Section 106. The court referenced the Privy Council's wide interpretation in Spooner v. Juddow to support this view.3. Interpretation of Section 52 of the Indian Income Tax Act 1918Section 52 provides that no prosecution, suit, or other proceeding shall lie against any Government Officer for anything done in good faith under the Act. The court interpreted that an application for an order under Section 45 of the Specific Relief Act against the Chief Revenue Officer is a proceeding against him within the meaning of Section 52. The court cited the high authority of Bowen and Kay, L. JJ. in In re Onward Building Society to support this interpretation. Consequently, the present proceeding is prohibited by the express terms of Section 52 since there is no suggestion of any lack of good faith on the part of the Chief Revenue Commissioner.4. Nature of duty imposed on the Chief Revenue Authority under Section 51 of the Indian Income Tax Act 1918Section 51 requires the Revenue Authority to make a reference to the High Court unless it is satisfied that the application is frivolous or unnecessary. The court discussed the meaning of 'frivolous' and 'unnecessary,' concluding that 'necessary' means 'reasonably required for the disposal of the case.' The court noted that the Revenue Authority must exercise discretion in determining whether a reference is necessary. The court found no sufficient grounds to hold that Section 51 partially repeals Section 106, even to the extent of allegations of bad faith.5. Relevance of English decisions in interpreting Indian statutesThe court addressed the argument that the Revenue Authority should not follow English decisions. The court clarified that the Privy Council's reference to 'foreign decisions' in Imambandi v. Mutsaddi was not applicable to English decisions, which continue to provide guidance in India. The court emphasized that the Indian Income Tax Act generally follows the lines of the English Act, and English decisions are the best guide where provisions are similar. The court criticized the Revenue Authority for misinterpreting the Privy Council's stance on English decisions.Conclusion:The court allowed the appeal and dismissed the application with costs throughout. The court concluded that the High Court does not have jurisdiction to issue an order under Section 45 of the Specific Relief Act concerning matters of revenue due to the prohibitions in Section 106 of the Government of India Act 1915 and Section 52 of the Indian Income Tax Act 1918. The court also emphasized the continued relevance of English decisions in interpreting similar provisions in Indian statutes.