LexRAJA JAGDAMBIKA PRATAP NARAIN SINGH versus CENTRAL BOARD OF DIRECT TAXES & ORS.
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RAJA JAGDAMBIKA PRATAP NARAIN SINGH
v.
CENTRAL BOARD OF DIRECT TAXES & ORS.
July 17, 1975
[V. R, KRISHNA !YER, R. S. SARKARIA AND A. C. GUPTA, JJ .j
. ('onstiturion of India-Article 226-Delay-Article 136-lnterference
by
Supreme Court with exercise of discretion by High Court-income Tax Act
1922 Sec. 4(3), Sec. 30-Agricultural lncdme-Appeal to A.A.C.-Condoffa-
!lafl of dclay-Fitwlity of illegal assessn1ent orders.
The appellant an owner of a mango grove has been deriving income by way
Of fruits and fallen trees. In the year 1939-40 he c1ain1cct this incon1e to be
agricultural income and therefore immune to income ta,x. The Assessing Au-
thorities neRatived the _claim of the appellant. The High Court in the year
1963 held the income to be agricultural income and therefore exempt from
income tax. The State did not challenge the decision of the High Couft.
The appellant did not challenge the orders of the Assessing Authorities for the
subsequent years i.e. 1940 to 1962 in t11e hope that if ultin1ate]y the High
Court upheld his contention for one year the Tax Authorities would give
effect to that holding for all the years. The appellant thereafter awroached the
Central Board of Revenue for refund of the tax paid by the appellant .i.n
respect of the subsequent vem. The Central Board reiected the petition in
1968.
The llDoellant moved the High Court under article 226. The High
Court refused to interfere both on the ground of delay as well as on the ground
that the assessment orders for the relevant years had become final, the assessec
not having taken advantage of his remedy provided for in the statute.
The
High Court, however, made an observation !hat if so advised the appellant
might file
a~peals under section 30_ of the Income Tax Act, 1922 and pray
!or ~ndonat1on of delay u~der section 30(2) of the said Act.
On appeal by
-'rectal leave to thrn Court, it was contended by the appellctnt ·.
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( 1) Since various assessment orders were void the State was bound to
refund what had been illegally levied.
(2) The Central Board should have exercised its power to give appro-
priate directions for refund.
(3) Regardless of statutory remedies and rules of limitation, the High
Court had power under Art. 226 to quash the illegal orders and
to prevent unjust enrichment by the State.
The respondents contended :
(I) The appellant is guiltv of ]aches.
High Court has rightly cxctctscd
its discretion.
This Court nlay not interfere with it.
(2) The a<;sessn1ent orders have become final.
C~) The Central Board of Direct Taxes has no statutory duty to grant
refund evi_:n in cases where orders of asse"'sment, though illegal, have
been allowed to become final hy wilful default of the assessee.
Dismi35ing the appeal,
HELD : ( 1) The impo'>ition of tax on agricultural income is beyond
the
legislative competence of Parliament and altogether outs;de the jurisdiction
of the Income Tax Officer. It may well be contended that the impost is u/trc,
1·ires, its powers. and therefore. a nullity.
We need not consider thi1:
asr~ct
,speci>llY since the writ petition itself is bad for unexplained delay. [54C-El
5-L7!4SupCl/75
50
SUPREME COURT REPOllTS
11976] 1 s.c.a.
(2) The writ jurisdiction is not measured by statutory finality to orders
regardless of their illegality. If the levy io illegal the constitutio,.l n:me<IY
l!Oes into action. However,
Art. 226 is not blanket power regardleos of
temporal and discretionary reotrainL If a party is inexplicably and
unduly
delayed due to !aches the Court may ordinarily deny redress. If the High
Court has exerc:sed its discretion to refuse the redress, this Court declines
to disturb &uch e:xercise unless the ground ~ too untenable. The High Court
in refusing relief on ground Of )aches did not exercise its discretion arbitrarily
<>r improperly.
[55B, D-E]
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( 3) It is doubtful if the Central Board can exercise any judicial power
and direct refund.
Even so, it is always open to the State where the justice
of the case warrants reconsideration of the levy of a tax illegally imposed, 10
view the situation from an equitable standpoint arid direct refund wholly or
in part.
Jn th;• ca.'le a liberal approach may well be justified. The Appellaw
:Authority if moved under section 30(2) wiH give due r~trard to the happen.,
togs in be'ween exercising its power of oondonation of delay in filin~ appeals
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