Statutory meaning of "resident" under the Income-tax Act prevailed over physical residence, and writ relief remained available.
The expression "resident" in section 18(3A) of the Income-tax Act, 1922 was held to bear its statutory income-tax meaning, not mere physical residence, because the section must be read with the interlinked scheme of sections 42 and 43 and the Act's defined terms. The Court rejected a construction based on practical difficulty at the time of payment, holding that such difficulty cannot displace the consistent statutory meaning. It also found the writ petition maintainable, since the appeal under section 30(1A) was not an adequate alternative remedy on the facts, and observed that certiorari may lie for an error of law apparent on the face of the record, though mandamus was more appropriate.
Issues: (i) Whether the word "resident" in section 18(3A) of the Income-tax Act, 1922 means residence in the income-tax sense under the Act or merely physical residence. (ii) Whether the writ petition was barred by the availability of an appeal under section 30(1A) of the Income-tax Act, 1922 and whether certiorari was available against the impugned demand notices.
Issue (i): Whether the word "resident" in section 18(3A) of the Income-tax Act, 1922 means residence in the income-tax sense under the Act or merely physical residence.
Analysis: Section 18(3A) was read with the scheme of sections 42 and 43, which use the expressions "resident" and "non-resident" in the same statutory sense as the general definitions in the Act. The Court held that the legislature did not intend a different popular or physical meaning for section 18. The supposed practical difficulty of applying the statutory test at the time of payment was not enough to displace the defined meaning. Reading "resident" as physical residence would create uncertainty and inconsistent results, whereas the Act's interlinked provisions support one consistent meaning throughout.
Conclusion: The expression "resident" in section 18(3A) means resident in the income-tax sense under the Act, not merely physically resident; the Department's construction was rejected.
Issue (ii): Whether the writ petition was barred by the availability of an appeal under section 30(1A) of the Income-tax Act, 1922 and whether certiorari was available against the impugned demand notices.
Analysis: The appellate remedy under section 30(1A) was not an adequate alternative remedy because it depended on payment or deduction in the manner contemplated by that provision, which had not occurred. The Court also held that certiorari may lie for an error of law apparent on the face of the record, although it expressed doubt whether the impugned notices were proper targets for certiorari and observed that mandamus was the more appropriate relief. These observations did not displace the grant of relief already made.
Conclusion: The writ petition was maintainable and the challenged action was not saved by the alternative remedy objection.
Final Conclusion: The Revenue's demand based on treating the payee as non-resident in the physical sense was unsustainable, and the assessee was entitled to relief under Article 226.
Ratio Decidendi: Where an expression is defined for the purposes of the Act and the statutory provisions are interlinked, the defined meaning governs unless the context clearly repels it; a mere practical difficulty cannot justify substituting an ordinary or physical meaning for the statutory one.
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AI Drafter ✕
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