TaxTMI 
TaxTMI 
2003 (12) TMI 42
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..... The particulars are given in para. 2 of the writ petition. Subsequently, two of the partners died and one Sri Durga Prasad joined the partnership. Certain income-tax recoveries were issued against the members of the firm and one of the partners, Matadin Khetan, filed a Writ Petitition No. 5957 of 1971 (Matadin Khetan v. Union of India) challenging the recoveries. It is alleged in para. 7 of the writ petition that during the course of arguments learned counsel for the Department stated that the recovery certificates have been withdrawn and the Department does not propose to take any action in pursuance of these certificates. Hence, the writ petition was dismissed as infructuous on August 23, 1972, vide annexure 1 to the writ petition. Subsequently, the petitioner challenged the sale of the property No. 360 Sahebganj by Writ Petition No. 17690 of 1995 (Sanjay Khetan v. Union of India) which was disposed of by this court on January 22, 1997, directing the Tax Recovery Officer to decide the petitioner's representation. A true copy of the order is annexure 2 to the writ petition. Accordingly, the petitioner filed a representation and he was asked by the Tax Recovery Officer to furn....
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....t places including property at 360, Sahebganj South, Padrauna, were attached. In para. 12 it is stated that there was a huge demand against the defaulter and the tax outstanding was not paid by him even after several opportunities, and hence there was no option but to auction the immovable properties of the defaulters. It is alleged in para. 13 of the counter affidavit that the present recovery is in respect of the demand for the assessment years 1942-43 to 1977-78. It is alleged in paras. 29, 31 and 32 of the counter affidavit that rule 68B of the Second Schedule does not apply because the High Court vide order dated July 5, 1995 (quoted in para. 31 of the counter affidavit), has stayed the confirmation of the sale. It is alleged in para. 35 of the counter affidavit that the sale proclamation was duly served on February 28, 1997, and only thereafter it was published in the newspaper Rashtriya Sahara on March 28, 1997. We have also perused the rejoinder affidavit. The submission of learned counsel for the petitioner is that the recovery was barred by rule 68B of the Second Schedule to the Income-tax Act, 1961. Rule 68B which was inserted by the Finance Act, 1992, with effect ....
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.... under this rule." It appears that the wife of the petitioner filed Writ Petition No. 957 of 1994 by which she challenged the same action of the respondent authorities. The said writ petition was dismissed by this court as stated in para. 6 of the counter affidavit. In our opinion, rule 68B of the Second Schedule to the Income-tax Act is not applicable to the facts of the present case because it was inserted by the Finance Act, 1992, with effect from June I, 1992. Admittedly, the recoveries in question pertain to the assessment years 1942-43 to 1977-78 and the same were pressed from time to time in accordance with law, but the petitioner succeeded in avoiding the same by one way or another as is evident from the order of the Tax Recovery Officer dated February 26, 1997, vide annexure 7 to the writ petition. The Finance Act, 1992, was not retrospective and hence, in our opinion, will not apply to the impugned recoveries as they were in respect of the earlier assessment years in respect of which the assessment and penalty orders have become final long before June 1, 1992. The recoveries for the assessment years 1942-43 to 1977-78 are being made as the amounts have not been paid by....
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....dings were initiated in the year 1972 itself when one of the writ petitions was filed. However, it is obvious from the facts that all the orders became conclusive much before 1980 and the period of three years as given in rule 68B also expired much before the addition of rule 68B. Hence, in our opinion, rule 68B is not applicable to such orders which have become final and conclusive much before June 1, 1992. In the present case, the orders were in respect of the assessment years 1942-43 to 1977-78 for which the recovery certificate was issued on March 21, 1982, as admitted by the petitioner. These orders had become conclusive much before June 1, 1992. In our opinion, rule 68B cannot be said to be retrospective. Hence, it cannot apply in those cases where the order under section 245-1 or Chapter XX of the Act became conclusive before June 1, 1992, which is the date on which rule 68B came into effect. Rule 68B applies only in cases where a conclusive order was passed under section 245-1 or Chapter XX of the Act on or after June 1, 1992. Alternatively, it is also possible to hold that rule 68B will apply to cases where the three year period from the end of the financial year in whic....
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....arly, nova constitutio futuris formam imponere debet, non praeteritis. This rule, which is in effect that enactments in a statute are generally to be construed to be prospective, and intended to regulate the future conduct of persons, is deeply founded in good sense and strict justice, and has been acted upon in many cases." In Ward v. British Oak Insurance CO. [1932] 1 KB 392 (CA), Scrutton LJ: observed: "unless an intention to the contrary is clear, an Act is to be construed as operating only on cases or facts which come into existence after the Act, and not retrospectively on cases or facts which had come into existence before the Act." In our opinion, rule 68B should not be construed to impair the obligation on the assessee to pay his taxes, particularly when it has not been enacted retrospectively. As a general rule, every statute is deemed to be prospective, unless by express provision or necessary implication it is to have a retrospective effect. In Punjab Tin Supply Co. v. Central Government, AIR 1984 SC 87, the Supreme Court observed: "All laws which affect substantive rights generally operate prospectively and there is a presumption against their retrospectivity if t....