Kunwar Trivikram Narain Singh vs State Of Uttar Pradesh And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 799 of 1963

Decision Date: 25 September 1964

Coram: Subba Rao, J.C. Shah, S.M. Sikri

In this case, the Court recorded that the petition was titled Kunwar Trivikram Narain Singh versus the State of Uttar Pradesh and others, and that the judgment was delivered on 25 September 1964 by the Supreme Court of India. The bench consisted of Justices Subba Rao, J.C. Shah and S.M. Sikri. The citation for the decision was 1965 AIR 1267 and 1965 SCR (1) 336. The dispute concerned an assessment of agricultural income‑tax made by an Assistant Collector under the Uttar Pradesh Agricultural Income‑Tax Act, 1948 (U.P. Act 3 of 1949), as later amended by the Uttar Pradesh Agricultural Income‑Tax (Amendment) Act, 1956 (U.P. Act 14 of 1956). The headnote explained that the appellant had been assessed by the Assistant Collector in Banaras, but the statute at that time specified only the “Collector” as competent to make such an assessment. Consequently, the Collector set aside the assessment on the ground of lack of jurisdiction. Subsequently, the 1956 amendment redefined the term “Collector” to include the Assistant Collector and empowered the Collector to review his earlier orders quashing assessments if any party applied for review within ninety days of the amendment’s coming into force. The appellant filed such an application, after which the Collector revoked his earlier order and directed the Assistant Collector to proceed with a fresh assessment. The Assistant Collector issued a new assessment, which the appellant challenged by a writ petition before the High Court. After being unsuccessful in the High Court, the appellant obtained special leave to appeal to the Supreme Court. The appellant contended that the fresh assessment, made under the retrospective provisions of the amendment, was barred by limitation because the amendment’s operation should not extend the period for making the assessment. The Court held that the Collector’s order on the review application effectively restored the earlier proceedings; therefore, no limitation question arose, as the proceedings had been timely initiated and remained pending, and the fresh assessment was made within those revived proceedings. The Court noted that the authorities cited in S.C. Prashar v. Vasantsen, AIR 1963 SC 1356, and Commissioner of Income‑Tax, Bihar v. Lakhmir Singh, AIR 1963 SC 1394, were not applicable. The judgment was a civil appeal (No. 799 of 1963) filed by special leave from the Allahabad High Court judgment dated 1 March 1961 in Special Appeal No. 205 of 1958. Counsel for the appellant appeared, and counsel for the respondents appeared on behalf of the State and others. The judgment was delivered by Justice Subba Rao, and the appeal principally raised the question of the scope of the retrospective operation of the Uttar Pradesh Agricultural Income‑Tax (Amendment) Act, 1956.

In this case the factual background was straightforward. On 10 January 1953, for the assessment year 1952‑53, the Additional Collector of Banaras made an assessment of agricultural income tax against the appellant under the Uttar Pradesh Agricultural Income‑Tax Act, 1948 (U.P. Act 3 of 1949). On 9 February 1956, the Uttar Pradesh Agricultural Income‑Tax (Amendment) Ordinance, 1956 (2 of 1956) was enacted, providing that the term “Collector” shall always be deemed to include an Additional Collector. That ordinance was later replaced by the Uttar Pradesh Agricultural Income‑Tax (Amendment) Act 14 of 1956. After the appellant filed an application, the Collector issued an order dated 9 May 1956 revoking his earlier order and directing the Additional Collector to reassess the appellant in accordance with law. Accordingly, the Additional Collector resumed the proceedings and on 7 June 1956 passed a fresh assessment order imposing a tax of Rs 42,761 on the appellant. He then issued a notice on 4 July 1956 demanding payment of that tax. The appellant filed a petition under Article 226 of the Constitution in the High Court of Judicature at Allahabad on 7 August 1956, seeking to set aside both the assessment order and the notice. The petition was heard by Justice Tandon, who dismissed it with costs. The appellant appealed that dismissal to a Division Bench of the High Court, and that appeal was also dismissed, giving rise to the present appeal. Counsel for the appellant argued two points. First, he contended that the respondent’s right to assess the appellant was barred by limitation and therefore the amendment Act could not revive that right. Second, he submitted that the amount recorded as “malikhana” could not in law be the subject‑matter of an assessment. The second point had not been raised before the High Court, and the Court declined to permit its introduction for the first time at this stage. The first point required examination of the relevant provisions of Act 3 of 1949 and Act 14 of 1956. Under Act 3 of 1949 the definition of “Collector” did not include an Additional Collector. Act 14 of 1956 received the Governor’s assent on 17 April 1956 and was published in the Uttar Pradesh Gazette (Extraordinary) on 19 May 1956. Section 2 of Act 14 of 1956 provides that in Section 2 of the Uttar Pradesh Agricultural Income‑Tax Act, 1948, for clause (4) the following substitution shall be deemed always to have been in force: “(4‑a) ‘Collector’ shall have the meaning assigned in the Uttar Pradesh Land Revenue Act, 1901, and shall include an Additional Collector appointed under that Act.” Section 11 of the Amendment Act states that where, before the commencement of this Act, any court or authority has, in any proceeding under the principal Act, set aside an assessment made by an Additional Collector or Additional Assistant Collector in charge of a subdivision merely on the ground that the assessing authority lacked jurisdiction, any party to those proceedings may, within ninety days from the commencement of this Act, apply to the appropriate court or authority for a review of the proceedings in accordance with the provisions of this Act, and the court or authority so applied to shall review the proceedings and make such order, if any, as may be necessary to give effect to the principal Act as amended by sections 2 and 8 of this Act.

The Act provided that any person could, within ninety days from the date on which the Act commenced, apply to the appropriate Court or authority for a review of the proceedings in accordance with the provisions of the Act. The Court or authority receiving such an application was required to review the proceedings and to make any order that might be necessary, including varying or revising the earlier order, so as to give effect to the Principal Act as amended by sections two and eight of the present Act. A combined reading of these provisions indicated that, provided the application for review was filed within the prescribed period, the earlier proceedings would be revived and the parties would be restored to the position they had occupied before the proceedings were set aside on the ground of lack of jurisdiction. In the present case, the Additional Collector had initiated proceedings on 10 January 1953 to assess the appellant for the assessment year 1952‑53. The only defect in those proceedings was that the Additional Collector, at that time, did not have authority under Act three of 1949 to make the assessment. Consequently, the Collector quashed the proceedings by order dated 26 November 1955. After the amending Act was enacted, the appropriate income‑tax authority filed an application within ninety days before the Collector, seeking a review of his quashing order. The Collector exercised the statutory power of review, set aside his earlier order, and thereby restored the proceedings before the Additional Collector. Because the amendment deemed the Additional Collector to be the Collector from the inception of the Principal Act, the restored proceedings were deemed to have been initiated by a proper authority under the Principal Act.

Accordingly, no question of limitation could arise, since the proceedings had been timely initiated and were considered to have been pending continuously, allowing the fresh assessment to be made within those proceedings. The Court observed that the authorities cited by counsel were misplaced. The judgments in S. C. Prashar v. Vasantsen and Commissioner of Income‑Tax Bihar v. Lakhmir Singh dealt with whether an amending Act could revive a remedy that had become time‑barred before the amendment. The Court held that such a question was irrelevant to the present matter, where the constitutionality of the amending Act was not in dispute and the Act expressly empowered the appropriate authority to review its own order if an application was filed within the prescribed time. Once the power of review was exercised, the proceedings were reopened, and the issue of applying an amendment to a barred claim did not arise. Consequently, the Court affirmed the ruling of the High Court, dismissed the appeal, and ordered costs against the appellant.

The Court recorded the figure one hundred forty‑eight.