Certificate under section 46(2) constitutes a valid recovery proceeding; collector may recover only the lawfully revised amount.

Certificate issued under section 46(2) was held to constitute a proceeding to recover arrears for purposes of section 46(7); the certificate dated 13 March 1953 was within the one year period measured from the demand of 30 April 1952, so limitation did not bar recovery. The Court further held that a subsequently reduced assessment does not render a properly issued certificate void; rather, recovery must be limited to the amount lawfully due after revision and the Collector/certificate officer may amend the certificate to give effect to the reduced liability.

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Issues: Whether the certificate issued under section 46(2) of the Income-tax Act (dated 13th March, 1953) constituted a proceeding to recover tax for the purposes of section 46(7) and whether recovery based on that certificate is barred by limitation or rendered invalid by a subsequent revision reducing the assessed liability.

Analysis: The Court examined whether the certificate dated 13th March, 1953, amounted to proceedings for recovery within the meaning of section 46(7) and whether the subsequent revision by the Commissioner on 7th January, 1954, which reduced the tax liability, vitiated the earlier certificate. The Court accepted that a certificate under section 46(2) is a proceeding to recover arrears and that the certificate issued on 13th March, 1953, was within the one-year period prescribed by section 46(7) measured from the demand made on 30th April, 1952. The Court further considered whether an overstated certificate (relative to a later-reduced liability) is void; it held that a certificate properly issued in accordance with the assessment in force when made remains a valid proceeding to recover arrears, subject to allowing collection only of the amount lawfully due after revision. The Court also noted that the certificate officer/Collector may amend the certificate to give effect to the reduced liability.

Conclusion: The certificate dated 13th March, 1953, was a valid proceeding under section 46(2) and not barred by limitation under section 46(7); the Collector was entitled to proceed on that certificate but could recover only the amount lawfully due after the Commissioner s revision. The petitioner's challenge on limitation and invalidity of the certificate is rejected; decision is in favour of the revenue.

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