Garnishee payment under income-tax law can be certified as decree satisfaction under Order 21, rule 2 CPC.

Money recovered by the Collector of Customs and paid to the income-tax authorities under section 46(5A) of the Indian Income-tax Act, 1922 could be certified as satisfaction of a decree under Order 21, rule 2 CPC. The Court treated the payment as a lawful out-of-court payment made through the department in possession of the money on behalf of the judgment-debtor, and held that Order 21, rule 2 is not confined to voluntary payments. A notice referring to income-tax and penalty was not invalid merely because the appropriation was towards super-tax, since super-tax is a form of income-tax. The objection to adjustment therefore failed.

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Issues: Whether money paid by the Collector of Customs pursuant to a notice under section 46(5A) of the Indian Income-tax Act, 1922 could be certified as an adjustment of the decree under Order 21, rule 2 of the Code of Civil Procedure.

Analysis: The amount recovered by the Collector of Customs was being held on behalf of the Union of India, and payment to the income-tax authorities under section 46(5A) was treated as a lawful payment by the judgment-debtor through the department in possession of the money. The notice was not invalid merely because it referred to income-tax and penalty while the appropriation was toward super-tax, since super-tax is a form of income-tax. Order 21, rule 2 contemplates payment out of court and is not confined to voluntary payments. A payment made in the nature of a garnishee payment under section 46(5A) stands on the same footing as any other out-of-court payment capable of being certified.

Conclusion: The payment was liable to be certified as satisfaction of the decretal liability, and the objection to adjustment failed.

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