Balimara Tea Company (Pvt.) Ltd. vs The Agricultural Income Tax Officer and Others

Baharul Islam, C.J.—In these Rules a common question fails for decision. The question is, whether the provision of Section 68(2) of the Assam Land and Revenue Regulation is mandatory as contended by counsel for the Petitioner.

The Bakijai proceedings impugned in the Rules arises out of agricultural income tax, Civil Rule No. 478 of 1972 relates to the assessment year 1962-63. Civil Rule No. 479 of 1972 to the assessment year 1963-64 and Civil Rule No. 480 of 1972 to the assessment year 1964-65. It will be sufficient if we refer to the facts of Civil Rule No. 472/78.

The material facts are that the Petitioner company owns a tea estate manufacturing and selling tea within the State of Assam. It is assessed to agricultural income tax under the Assam agricultural Income Tax Act, 1939 (hereinafter ''the Act''). For the assessment year 1962-63 the Agricultural income tax Officer (Respondent No. 1) assessed the Petitioner u/s 20(4) of the Act at Rs. 70,919/- of agricultural income tax. The Petitioner did not prefer any appeal and paid Rs. 51,000/- of the assessed tax. The Respondent No. 1 issued a Certificate to the Collector of Dibrugarh (Respondent No. 3) for recovery of the balance amount of Rs. 61,919/- for the assessment year 1962-63. The Bakijai Officer, Dibrugarh (Respondent No. 2), on receipt of the certificate, initiated proceedings for the recovery of the said amount. In pursuance of the said proceedings the Nazir attached movable properties of the Petitioner worth Rs. 1,65,000/-. The attachment was done without any notice as required u/s 68(2) of the Regulation.

Mr. J.P. Bhattacharjee, learned Advocate General, Nagaland appearing for the Petitioner, submits that the attachment is without jurisdiction inasmuch as it is in violation of the provisions of the provide to Sub-section (2) of Section 68 of the Regulation, which he submits, is mandatory and non-compliance thereof vitiates the attachment.

In reply Mr. B.C. Baruah, learned Advocate General, Assam submits that the provision to Sub-section (2) of Section 68 of the Regulation is directory and its non-compliance is a mere irregularity and does not vitiate the attachment. He submits that immediately the arrear is paid by the Assessee-Petitioner the movable seized will be released. The undisputed case is that movables seized have not been sold.

The admitted position is that the arrear of the agricultural income tax maybe realized as an arrear of land revenue under the Regulation. The mode of recovery of arrear of land revenue has been prescribed in chapter V of the Regulation, Section 68 of the Regulation provides: (relevant portion only).

68 (1).

(2) If the arrear is not in respect of a permanently settled estate, the prescribed officer may in his discretion before employing any of the processes for enforcing payment prescribed by this Chapter, issue a notice of demand, calling on the defaulter to pay the amount within a time specified:

Provided that, in such classes of cases, not being cases in which an arrear has accrued in respect of a permanently settled estate, as the State Government may direct in this behalf, the prescribed officer shall not employ any such process for enforcing payment as aforesaid, until he has issued a notice of demand and the defaulter has failed to pay the arrear within the time specified in such notice.

The Petitioner''s submission is that the issue of a notice of demand as required by the provison is mandatory and unless the notice is issued, the Collector does not have the jurisdiction to seize the property. The ''process for enforcing payment'', in my opinion, involves two stages-firstly the attachment of the property, and secondly its sale, if the arrear is not paid meanwhile. The purpose of employing the ''process for enforcing payment'' is to realize the arrear of land revenue. Mere seizure does not serve the purpose of the realizing the arrear of land revenue. The arrear can be realized only by sale of the property seized. The procedure of sale of movable properties has been prescribed u/s 69 of the Regulation. The purpose of seizure is sale and the purpose of sale, as stated above, is to recover the money. In certain cases is possible that the arrear may be comparatively smaller than the value of the property attached and intended to be sold. If the property of such higher value is seized and Hold the defaulter will suffer, in that case, if he knows that his property is going to be sold, he would, in all probability, pay up the arrear. It, therefore, stands to reason that a sale and attachment are preceded by a notice of demand. Mere attachment, however, does not harm the defaulter, but the sale may. Therefore, in my opinion, mere attachment Without a prior notice is a mere irregularity and will not vitiate the attachment itself. It is not the case of the Petitioner that the Deputy Commissioner had total lack of jurisdiction in directing the attachment of the property. In the result I hold that the provision to Sub-section (2) of Section 68 of the Assam Land and Revenue Regulation is directory and not mandatory and its non-compliance does not vitiate the attachment. The impugned attachment tore has not been vitiated.

In support of His contention the Petitioner cited before us a decision of the Supreme Court in the case of Wazir Chand Vs. The State of Himachal Pradesh, In my opinion this case is of no assistance to the Petitioner, In that case certain goods in possession of the Appellant were seized by Police in India at the instance of Policy of Jammu and Kashmir and "the (SIC) was not under any authority of law, inasmuch as (SIC)were not under orders of any magistrate, nor were they under any of the Sections 51, 95, 98 and 163 of the Code of Criminal Procedure (SIC) no report of any offence committed by the Petitioner was made to the police in India and the Indian Police were not authorized to make any investigation".

In the Supreme Court Case (supra) there was total lack of Jurisdiction on the part of the Indian Police to seize the property, but in the case in hand the Deputy Commissioner had the requisite power to seize the property u/s 68 of the Regulation; what lacked was a prior notice.

In the result I hold that these applications have no merit and are dismissed. The orders of stay earlier granted are vacated.

We are told that the Petitioners have not yet paid up the arrears in view of the stay order granted by this Court on 15.5.1972. The Petitioners have successfully held up the payment of the arrears. The Petitioners, therefore are liable to pay costs. The Petitioners shall pay a consolidated cost of Rs. 300/- to the Respondents.