LexCOLLECTOR OF CUSTOMS & ORS. versus M/S. SOORAJMULL NAGARMULL & ANR.
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A B c D E F G H 123 COLLECTOR OF cusroMS & ORS. v. Mis. SOORAJMULL NAGARMULL & ANR. March 28, 1969 [M. HIDAYATULLAH, C.J. AND G. K. MITTER, J.] Civil Procedur. Code, 1908---0rder 21 Rule 2, Income Tax Act, 1922, section 46 (5A)-Decree against the Union of India for refund of exceu customs duty collected-Notice is.ued to Collector by the Income Tax Of!icer undtr section 46(5A) of Income Tax Act, 1922-Payment by Collector against tax-Whether amounted to payment by judgment debtor which could be adjusted under Order 21 Rule 2. The re.pondent filed suits against the Collector of Customs and the Union elf India claiming refund of excess customs duty levied on spindle oil imported into India. The trial court granted decrees against the Union of India for the amounts charged in exc"'8. As the respondent had large outstandings of tax, the Income Tax Officer issued a notice under section 46(5A) of the Income Tax Act, 1922 calling upon the Collector of Customs to pay the amount of the decree to him. The Collector paid the amount into the Reserve Bank, who issued receipts crediting the amount against super-tax due from the respondent. He then applied to the High Court under O. 21 r. 2 C.P.C. for the adjustment elf the decree by ttiis amount. This was refused by a single Judge as well as in appeal by a division bench. It was held that the decree. were against the Union of India and not the Collector of Customs and that payment by the Collector was not a payment by the judgment debtor. Furthermore the amounls wert held by the Collector on behalf of the Union of India and not · on behalf of the Firm. The Hieb Court also found the notice to be defective inasmuch as it asked for payment towards income tax and penalty. while the receipts which were granted to the Firm stated that the amount paid was against super-tax due. On appeal to this Court, HELD : The Union of India operate. through different Departments and a notice to the Collector of Customs in the circumstances was a proper notice to issue because it was the Collector Of Customs who h1d in the firat instance recovered the amount and held it from the respondent. 1be Collector paid the amount on behalf elf the Union of India. [126 A] A notice under section 46(SA) is no more than a kind of garnishee order. issued to the person holding money and the money is due to an ass"'8ee. The amount whkh was held by the Collector of Customs could pro~erly be asked to be deposited with the income tax authorities under section 46(SA). [127 B-D] Super tax i• also a kind of income tax and therefore, the notice could is•ue in the form it did. There was no force in the contention that the amount, which could be adjusted under 0. 21, r. 2, is a voluntary payment by the judgment debtor to the decree holder and the present case was not one of voluntary pay- ment at all. Order No. 21, r. 2 merely contemplate. payment out elf. court and says nothing about voluntary payment. A garnishee order can never by its nature lead to a voluntary payment and it is not to be thought that a garnishee order does not lead to the adjustment of the decree / 124 SUPREME COURT REPORTS (1970] I S.C.R. sullicient for being certified by the Court. Payment by virtue of s. 46(5Al is in the nature of a garnishee payment and mlljt, therefore, be sub1ect to the same rule. (127 G-I 28 Bl In,. Btckit~ [19331 l.T.R. I, Bidhoo Beebtt v. Kcshub Chundtr Baboo & Ors. 9 W.R. 462, Mahiganj Loan Office Ltd. v. Bthari Lal Chakl, !.L.R. 119371 I Cal. 781, A. P. BQ/lchi v. Mrs. F. Morgun A.J.R. 1935, All 513, Thomc.s Skinne' v. Ram Rachpal I.LR. [1938) All 294, distinguished. CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 429 and 430 of 1966 Appeals by special leave f·om the judgments and orders dated Ja,nuary 22, 1964 of the Calcutta High Court in Appeals Nos. 199 and 200 of 1962 from Original Order. B. Sen and S. P. Nayar, for the appellants (in both the appeals). A. N. Sinha and D. N. Gupta, for respondent No. I (in both the appeals). The Judgment of the Court was delivered by Hidayatullah, C.J. This is an appeal against the judgment and decree of the High Court of Calcutta refusing to enter satisfaction of two decrees under 0. 21 r. 2 of the Code of Civil Procedure obtained by the respondents against the Union of India in the following circumstances. The respondents M/s Soorajmull Nagarmull imported spindle oil from Philadelphia. The firm was
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