Advance tax credit after partition: proved pre-partition payment supports Indian adjustment despite no refund voucher.

Advance tax paid under section 18A of the Indian Income-tax Act, 1922 could be credited against assessments in India even where the balance had been paid in Lahore before partition. The operative principle was that section 18(3) of the Indian Independence Act, 1947 altered the incidence of advance tax so that the unadjusted portion remained available for adjustment in India. A refund voucher from Pakistan was not treated as indispensable where payment and entitlement were otherwise proved, and a hyper-technical insistence on that document could not defeat statutory credit for the unadjusted advance tax.

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Issues: Whether the assessee was entitled to adjustment in India of the balance of advance tax paid in Lahore under the Indian Income-tax Act, 1922, without producing a refund voucher from the Pakistan authorities.

Analysis: Advance tax paid under section 18A of the Indian Income-tax Act, 1922 was liable, after partition, to be adjusted against the assessments in both dominions, as the effect of section 18(3) of the Indian Independence Act, 1947 was to alter the incidence of the advance tax. The Court held that the Revenue's insistence on production of a refund voucher was a hyper-technical objection and that the absence of such a voucher did not, by itself, defeat the claim for adjustment where payment of advance tax was admitted and proved. The Court also relied on the settled principle that the unadjusted portion of advance tax paid in Pakistan had to be given credit in India.

Conclusion: The assessee was entitled to set off and adjustment of the balance amount of advance tax in India, and the demand notice could not be sustained.

Final Conclusion: The petition succeeded, the impugned demand notice was quashed, and the assessee obtained relief by way of adjustment of the unadjusted advance tax amount.

Ratio Decidendi: Where advance tax paid before partition is proved, the Indian income-tax authorities must grant credit for the unadjusted balance notwithstanding the non-production of a refund voucher from Pakistan, because the statutory right of adjustment is not defeated by that procedural circumstance.

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