Durga Prasad Ramniwas Poddar vs V. Vaswaney, 7th WTO

Pratap, J.—In this petition under art. 226 of the Constitution, challenge is raised to the legality and validity of the impugned notice ( exhibit A ) under s. 17 of the W.T. Act, 1957 (hereinafter "the Act"). The notice states that there was reason to believe that the petitioner''s net wealth chargeable to tax for the relevant assessment year has escaped assessment within the meaning of s. 17 of the Act and the WTO, therefore, proposed to assess the said net wealth that has so escaped assessment. The petitioner is an assessee assessed under the I.T. Act, 1961. At the relevant time, he claimed to be the owner of an immovable property "Poddar Bungalow" (hereinafter "the said property") situated at 6, Worli Sea Face, Worli, Bombay. This claim was also set up in a suit, being Suit No. 345 of 1969, filed by him in this High Court. To the said suit, the Union of India was a party defendant. The Union of India had been all along till then treating the said property to be not that of the petitioner but of his late father. However, in view of the claim of ownership set up by the petitioner, the impugned notice under s. 17 of the Act was issued. It could not, therefore, be contended that the impugned notice, when issued, was not legal and valid. Indeed, it was based on the petitioner''s own claim of ownership.

Subsequent developments have, however, rendered the impugned notice infructuous. The petitioner has in this court filed affidavit to the following effect:

"I am given to understand that the notice u/s 17 of the Wealth-tax Act was issued by respondent No. 1 on the ground that I have claimed property known as Poddar Bungalow, situate at 6, Worli Sea Face, Worli, Bombay-25. I admit having made a claim of sole ownership of the said property and filed a declaratory suit, being Suit No. 345 of 1969, wherein I made the Union of India as party defendant No. 9. Subsequently, however, I gave up the plea of ownership and accordingly dropped the Union of India as defendant No. 9. I solemnly declare that I am not the owner of the said property ''Poddar Bungalow'', 6, Worli Sea Face, Bombay-25."

The petitioner is an attorney of this court. There is no reason why his solemn statement on affidavit should not be accepted by this court. His affidavit makes it clear that he does not claim to be the owner of the said property. Still further, as per the said affidavit, he has even dropped the Union of India from the array of defendants in his Suit No. 345 of 1969. Indeed, subsequently on April 1, 1982, the petitioner has withdrawn the said suit itself. Mr. Irani, learned counsel for the petitioner, states that though the petitioner has, subsequent to the withdrawal of the aforesaid suit, filed a fresh suit, he has in the said suit not claimed any ownership rights in the said property. In view of the unequivocal position thus emerging, resulting in the petitioner not being the owner of the said, property nor claiming to be so, the impugned notice is, as indicated, rendered infructuous. The same, therefore, deserves to be quashed as infructuous.

In the result, this petition is allowed. The impugned notice (exhibit A) under s. 17 of the W.T. Act, 1957, is set aside and quashed as having become infructuous. Rule is made absolute in terms aforesaid but, in the circumstances, with no order as to costs.