Raja Shri Saubhagya Chandra Harichandan Deb vs State of Orissa Agricultural Income Tax Officer

K.S. Raghupathi, Member

This is a revision sought u/s 61 of the Orissa Public Demands Recovery Act of the order of the Revenue Divisional Commissioner, Sambalpur passed on B February 1974 in his Certificate Revision No. 14 of 1973.

The Agricultural Income Tax Officer, -Dhenkanal Circle, Angul was the Certificate Holder and Sri Hrudaya Chandra Dev Birbar Harichandan, Raja Saheb, Talcher, the Certificate Debtor in a Certificate for the recovery of Rs. 66,727.03 towards arrears of Agricultural Income Tax dues for the assessment years 1959-60, 1960-61 and 1961-62.

Notice was served u/s 7 of the Bihar and Orissa Act IV of 1914. The Certificate Debtor did not file any petition denying liability. An order was passed on 29 February 1964 attaching the rent dues payable by the Subdivisional Officer, Talcher for occupation of a building belonging to the Certificate Debtor. A proclamation of sale was also asked to be issued for the sale of certain lands of the Certificate Debtor.

Rent dues of Rs. 18049,63 were paid into the Sub-Treasury, Talcher on 27 March 1964. The Certificate Debtor filed a petition 30 March 1964 to state that he has moved the Commissioner, Agricultural Income Tax in Case No. AIT 25 of 1963-64 to excuse the penalty, interest and cost and that he has also moved the Agricultural Income Tax Tribunal for a reference to the High Court on certain important questions of law. He claimed that the lands in respect of which agricultural income tax had been claimed did not belong to him and that he has all along been challenging the assessment. He said that he was ready to deposit Rs. 27,000/- out of the certificate dues and asked for the certificate proceedings for the balance amount to be postponed until after the final decision of the Commissioner of Agricultural Income Tax and the Tribunal. He added that he has "waived out his right to fresh proclamation."

The Certificate Officer adjourned the sale to 20 April 1964 but added that there will be no further adjournment.

The Certificate Debtor went up in appeal which was dismissed. The sale was thereafter fixed for 1 September 1964 and further postponed to 8 October 1964. Meanwhile the case was taken in revision to the Revenue Divisional Commissioner and from there to the Board of Revenue.

The Revision was rejected by the Board of Revenue on 15 February 1966 with the following observation:

The point is whether the proceeding is a suit or execution of a decree. Where the law provides certain special provisions these have to be construed in accordance with law. While certificate procedure may have some semblance to a decree, it is not itself a decree. A Civil Court cannot cancel it nor an appeal etc. is provided by the Civil Court. Unless, therefore, a specific reference to sections 86 and 87 B refers to a proceeding under the Public Demands Recovery Act, I would hold that the proceeding in execution of a certificate will not be barred by the special provisions of the Civil Procedure Code. The certificate proceeding would, therefore, lie. But the petitioner should have ample opportunity to deny his liability and to claim that the certificate is maintainable or not. As there are not adequate materials it is for the Certificate Officer to go into the question on the facts and the materials whether this can be realisable under the Public Demands Recovery Act. The order of demand is quite justifiable.

I hold, therefore, that while certificate can be executed like a decree, it is not itself a decree, because it does not come within the purview of the Code of Civil Procedure. There is nothing wrong in the certificate proceeding. Revision rejected.

The case was adjourned from time to time by the Certificate Officer. It would appear from the records that the order of the Board of the Revenue had not been received by him when ultimately on 17 March 1970 the following order was passed-

Since C. D. R. has made part payment at of the decretal amount, the question of non-maintainability of the decree falls to the ground. Hence the prayer is rejected. Ask the C. D. R to pay up the balance dues by 23-4-1970 failing which law will take its own course.

The Certificate Debtor who was seriously ill and confined to bed died and a notice was issued to the legal heirs. In response, the present Petitioner Raja Shri Saubhagya Chandra Harichandan Deb filed a petition on behalf of all the legal heirs stating that he was depositing Rs. 700/- on that day and that he would pay regularly Rs. 500/- a month until they are able to sell some of the property and clear the dues. Thereafter on 16 February 1972 an appeal was filed before the Additional District Magistrate, Dhenkanal. This was dismissed. A revision taken to the Revenue Divisional Commissioner. Sambalpur was rejected mainly on the ground that there was no petition filed u/s 8 denying liability and again that liability was not denied when legal heirs were noticed. Hence this revision.

In the hearing before me, the learned Advocate for the Petitioner has laid emphasis on the order of the Board of Revenue passed on 15 February. 1966 and contends that the Certificate Officer who had been asked to give adequate opportunity to deny the liability had not done so and instead passed an order peremptorily that when part payment had been made of the decretal amount the Certificate Debtor could not plead non maintainer. Mr. Jagadeb Mohapatra has also stressed that at the time when the certificate proceedings were initiated the Certificate Debtor believed that he enjoyed immunity under Sections 86 and 87-B of the CPC and that therefore he did not file any petition u/s 8 of the Public Demands Recovery Act. When the Certificate Officer persisted in executing a decree which was ab initio void, the petition of 30 March 1964 was filed. When even this was ignored and sale was insisted on, an appeal had been preferred which in due course resulted in the order of the Board of Revenue.

It had been held that certificate is not a decree and that therefore the provisions of Sections 86(3) would not apply. But, there was clear direction that the Certificate Officer should go both into the question of liability of the Petitioner and into the question of maintainability of the proceedings. In accordance with this the advocate had presented the case to the Certificate Officer, as would be evident from a "Note on Arguments" in the records of that Court. The Certificate Officer did not apply his mind to this and proceeded to pass an .order in violation of the directions of the Board of Revenue.

There has been no part payment made of the decreetal amount. The offer of Rs. 27000/- was for payment in deposit and not in discharge of any dues. It could not mean that liability had been accepted.

It has been the contention of the Petitioner all along that (i) the requisition had not been verified in accordance with Rule 1(2) ; (ii) the amount stated in the requisition is not actually due; (iii) the Certificate Officer had not satisfied himself that the demand is recoverable; (iv) he had not satisfied himself that recovery by suit is not barred by law; and (v) that there was no statement of landed properties sent with the requisition. The certificate was therefore ab initio ultra virus and all the proceedings founded upon it nun and void as had been held in Baijnath Sakai v. Ramgut Singh1.

Thus, there was (i) violation of the mandatory provisions of Sections 4(2) and 5 of the PDR Act (ii) there was violation of the orders of the Board of Revenue when the Certificate Officer declined to go into the objections and the arguments put forth by the advocate for the Petitioner, and (iii) there was denial of natural justice when the Revenue Divisional Commissioner rejected the revision without hearing the Petitioner.

The Learned Standing Counsel for the State had countered this with the argument that none of the irregularities relating to the requisition and its verification was material. They were not such as could be considered fatal to the proceedings. The Certificate Debtor would be estopped from denying liability when he had himself asked for time to pay the dues and more so when the present Petitioner had paid a part of it and had asked for the balance to be paid in monthly instalment''s. There may be a case for the Certificate Officer to allow payment in installments but there would be no case whatever for any fresh hearing on either the maintainability of the proceedings or on the liability of the Certificate Debtor.

On going through the records of the learned Revenue Divisional Commissioner leading to his order of 8 February 1974, I find that the Petitioner has not been given a chance of being heard in the matter, before the petition for revision was rejected. This was an error.

It was also an error on the part of the learned Revenue Divisional Commissioner to have rejected the revision on the ground that there was no petition filed u/s 8(1). The Certificate Debtor had believed that Section 87 of the CPC would help him in the Certificate proceedings and had not therefore filed a petition u/s 8 of the Orissa Public Demands Recovery Act. It is for this reason that, in its order of 15 February 1966 rejecting the revision, the Board of Revenue directed that opportunity should be given to the Certificate Debtor to deny his liability. It was expected that the Certificate Officer would treat the petition filed on 30 April 1964 as one u/s 8 and proceed to hear and determine the petition in the light of the provisions of Sections 8 and 9 of the Act read with Section 43 of the Orissa Agricultural Income Tax Act.

It was an error on the part of the learned Certificate Officer to have rejected the petition on the ground that a part of the decreetal amount had been paid. In the present case the Certificate Debtor had not paid any part of the dues but had only offered to deposit a certain amount. A deposit made to save the sale of property would not estop a certificate debtor from denying liability. Indeed even if part of the dues had been pad it would be open to the debtor to deny liability, as would be evident from a reading of Section 8(1): Liability must be determined without prejudice and if the outcome warrants it the deposit would have to be adjusted.

Notwithstanding these errors, the case of the Petitioner denying liability would fail for different reasons.

The Board of Revenue must observe that there is nothing wrong in the making of the Certificate. It is not disputed that an Assistant Agricultural Income Tax Officer is an authority appointed under Sub-section (3) of Section 18 of the Act. Section 36(3) makes it dear that the amount specified in the Agricultural Income Tax Certificate signed by him is to be recovered as a public demand payable to the Collector. In other words it has to be recovered as if the Certificate had been filed u/s 3 of the Orissa Public Demands Recovery Act. Provisions of Section 4(2) of the Orissa Public Demands Recovery Act or Rule 1(2) of schedule II of that Act are not germane to the making of a Certificate u/s 3.

Once the Agricultural Income Tax certificate is translated into a Certificate u/s 3 of the Public Demands Recovery Act and notice served in accordance with Section 6 of that Act there are two courses open to the Certificate Debtor which are not mutually exclusive. He may present a petition u/s 8(1). He may also institute a suit in a Civil Court u/s 42.

In the light of Section 43 of the Orissa Agricultural Income Tax Act, hearing and determination u/s 9 of the Orissa Public Demands Recovery Act would be confined to denial of liability of one of the two grounds (a) or (b) mentioned in Section 8(1). It is not the case of the Petitioner either (a) that the certificate dues have been fully or partly paid; or (b) that he is not the person named as the Certificate Debtor in the certificate. There is therefore no scope for the certificate officer to exercise jurisdiction u/s 9.

It is the contention of the Certificate Debtor that the amount is not due. It is for a Civil Court acting u/s 43 of the Public Demands Recovery Act and not for the Certificate Officer to cancel a Certificate if no part of the amount stated in the Certificate was due or to modify it if a portion of the amount was not due.

I would accordingly, set aside the orders of the learned Revenue Divisional Commissioner and the learned Additional District Magistrate. That part of the order of the Certificate Officer passed on 17 March 1970 which reads "Since C.D.R. has made part payment of the decreetal amount, the question of non-maintainability of the decree falls to the ground. Hence the prayer is rejected" will stand superseded the decision in paragraphs 19 to 22 supra.

Revision is accordingly allowed, in part and the case remanded to the learned Certificate Officer, Talcher with the direction that the Certificate proceedings which have been lingering for over twelve years be disposed of expeditiously and according to law.

Case remanded and Petition allowed in part.