Tax recovery procedure and arrest limits: uniform statutory discretion upheld, but detention barred for a mere HUF member.

A recovery proviso under section 46(2) of the Income-tax Act was held not to violate article 14 because it applied uniformly and only authorised choice among recovery modes. Assessments were not invalid merely because the Finance Acts were extended to the excluded area after the period began, as tax liability arose under section 3 and the operative law was in force when assessment was made. Recovery was also not time-barred under section 46(7), since limitation ran from forwarding of the certificate. The Collector could proceed under the Code of Civil Procedure independently of the Public Demands Recovery Act, but arrest and detention could not be ordered against a mere HUF member without proof of charge or control over recoverable property.

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Issues: (i) Whether the proviso to section 46(2) of the Income-tax Act was void for conferring an arbitrary choice of recovery procedure and thereby violating article 14 of the Constitution; (ii) whether the assessments were invalid because the Finance Acts were extended to the excluded area after the relevant period had begun; (iii) whether the recovery proceedings were barred by limitation under section 46(7) of the Income-tax Act; (iv) whether the Collector could proceed under the Code of Civil Procedure independently of the Public Demands Recovery Act and treat the assessee as in default during pending appeals; and (v) whether a mere member of a Hindu undivided family, who was not the karta and had no charge over joint family property, could be subjected to arrest and detention for recovery of the tax arrears.

Issue (i): Whether the proviso to section 46(2) of the Income-tax Act was void for conferring an arbitrary choice of recovery procedure and thereby violating article 14 of the Constitution.

Analysis: The law under section 46(2) applied uniformly to all assessees. It did not classify assessees differently, but merely authorised the Collector to use one of the available recovery modes. A provision that leaves selection of the procedure to an administrative authority is not discriminatory merely because one procedure may be more rigorous than another, so long as the statutory rule is the same for the entire class.

Conclusion: The proviso was not unconstitutional and did not offend article 14.

Issue (ii): Whether the assessments were invalid because the Finance Acts were extended to the excluded area after the relevant period had begun.

Analysis: Liability to income tax arises under section 3 of the Income-tax Act, while the Finance Acts regulate the rate and other incidents of assessment. Once the Finance Act had come into force before the assessment was made, there was no retrospective operation merely because its extension to the area occurred later than in the rest of India. The subsequent extension did not invalidate assessments already made under the operative law.

Conclusion: The assessments were not invalid on this ground.

Issue (iii): Whether the recovery proceedings were barred by limitation under section 46(7) of the Income-tax Act.

Analysis: The recovery proceedings were independent of the Public Demands Recovery Act proceedings. For limitation purposes, the forwarding of the certificate by the Income-tax Officer constituted the first step taken to recover the sum within the meaning of the explanation to section 46(7). The proceeding therefore commenced when the certificate was forwarded, not when later coercive steps were sought.

Conclusion: The proceedings were not barred by limitation.

Issue (iv): Whether the Collector could proceed under the Code of Civil Procedure independently of the Public Demands Recovery Act and treat the assessee as in default during pending appeals.

Analysis: The words of section 46(2), especially the phrase preserving the Collector's other powers, authorised use of the powers under the Code of Civil Procedure independently of any action under the Public Demands Recovery Act. As to default, section 45 made the assessee liable to be treated as in default, and the discretion to refrain from doing so during an appeal rested with the Income-tax Officer; it was not a mandatory duty. The Collector was not shown to be disqualified or biased merely because he was described as certificate-holder in form.

Conclusion: The Collector had authority to proceed, and the pendency of appeals did not by itself prevent the assessee from being treated as in default.

Issue (v): Whether a mere member of a Hindu undivided family, who was not the karta and had no charge over joint family property, could be subjected to arrest and detention for recovery of the tax arrears.

Analysis: Liability for the family debt could attach to joint family property, but not to the personal property of a mere member. Arrest and detention under the recovery machinery required a foundation showing control or charge over property available for satisfaction of the demand. On the facts, Kashiram was only an ordinary member and no charge or control over joint family property was shown against him.

Conclusion: The Collector had no jurisdiction to recover the arrears by arresting and detaining Kashiram Agarwalla.

Final Conclusion: The challenge failed as to the proceedings against the karta, but succeeded as to the ordinary member of the Hindu undivided family, so the matter was only partly successful for the petitioners.

Ratio Decidendi: A statutory recovery scheme that applies equally to all assessees is not discriminatory merely because it authorises an administrative authority to choose between alternative procedures, and arrest in tax recovery cannot be ordered against a person unless the statutory preconditions tying him to property available for recovery are satisfied.

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