Recovery action and arrest after stay of default were unlawful, creating liability for false imprisonment and damages.

Recovery proceedings could not be continued once the Income-tax Officer treated the assessee as not in default during the pending appeal, and the earlier recovery certificate did not authorise further coercive action by revenue officers. The statutory protections relied on under the Income-tax Act and the U.P. Land Revenue Act did not validate unlawful proceedings, and the wrongful arrest and detention were actionable in tort as false imprisonment. Proof of express malice was unnecessary; malice in law could be inferred from the unlawful act, and the officers could not rely on ignorance of law or purported good faith where they failed to act with due care. Damages for false imprisonment were restored and enhanced with costs.

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Issues: Whether the recovery authorities acted without jurisdiction in continuing coercive recovery and arresting the assessee after the Income-tax Officer had treated him as not in default, whether the statutory protection under the Income-tax Act and the U.P. Land Revenue Act was available, and whether the appellant was entitled to damages for false imprisonment.

Analysis: The Income-tax Officer's order under section 45 of the Indian Income-tax Act, treating the assessee as not in default during the pendency of the appeal, was held to be valid and effective notwithstanding the earlier issue of a recovery certificate under section 46(2). Once the department itself had stayed recovery, the Collector and subordinate revenue officers had no jurisdiction to continue coercive steps. The claim to protection under section 67 of the Income-tax Act and section 233(m) of the U.P. Land Revenue Act failed because those provisions do not protect incompetent or unlawful proceedings, and the civil claim sounded in tort for wrongful arrest and detention. The court further held that proof of malice was unnecessary for false imprisonment, that malice in law could be inferred from the wrongful act, and that the officers could not shelter behind ignorance of law or claim good faith where they failed to act with due care and attention. The documentary objections to the stay letter also failed.

Conclusion: The arrest and detention were without lawful justification, the appellant established false imprisonment, and the defendants were liable in damages.

Final Conclusion: The decree for damages was restored and enhanced, with costs throughout, in favour of the appellant.

Ratio Decidendi: Where an assessee is treated as not in default during a pending appeal, recovery proceedings based on the assessment cannot be continued by the collecting authorities, and an arrest made in disregard of that stay is without jurisdiction and actionable as false imprisonment.

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