# RAJA JAGDISH PRATAP SAHi v. STATE OF UTTAR PRADESH

- **Citation:** [1973] 3 S.C.R. 528
- **Court:** Supreme Court of India
- **Decided:** 1973-02-13
- **Case number:** Civil Appeal No. 1192 of 1970
- **Bench:** K. S. Hegde, P. )Aganmohan Reddy, H. R. Khanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/raja-jagdish-pratap-sahi-v-state-of-uttar-pradesh-5844
- **Pages:** 5

## Headnote

U.P. Agricultural Income-tax Act (3 of 1948), s. 32-Suit for recovery
of tax assessed-Maintainability.
The appellant was assessed to Agricultural income-tax under the U.P.
Agricultural Income-tax Act, 1948,
and was directed to pay it in four
instalments. The appellant defaulted and, when summary proceedi:ogs to
recover the amounts as arrears of land revenue were taken under s. 32
of the Act, it was found that two of the instalments had become time
barred under s. 32(2). In a suit by the respondent State for recovery of
those amounts, the appellant contended that the only remedy open to the
respondent was under s. 32 and that the suit was not maintainable. The
trial court dismissed the suit, but the High Court in appeal decreed the
suit.
Dismissing the appeal to this Court,
HELD : Where a taxing statute provides for a summary
mode of
recovery and is not exhaustive, it will be open to the State to have recourse to any other mode open to it under the general law.
[5320]
Once a notice of den1and is served on the assessee
for payment of
tax due under the Act, and the assessee makes a default _after the date
for payment specified therein has expired, a debt is created in favour
of the State; and the State has the right to recover it by any of the
modes open to it under the general law, unless, as a matter of policy
only a specific mode to the exclusion of any other is prescribed by the
law.
No such prohibition is enacted in s. 32 of the Act. [531C-EJ
Manlckam Chetiar v. Income-tax Officer. Madurai, [1938] VI l.T.R.
180, lnder Chand v. Secretary of State, A.LR. [1942] Patna 81 and Cha·
ganti Raghava Reddy v. State of Andhra Pradesh, A.l.R. [1959] A.P. 631
applied.

## Text

628
RAJA JAGDISH PRATAP SAHi
v.
STATE OF UTTAR PRADESH
February 13, 1973
[K. S. HEGDE, P. )AGANMOHAN REDDY AND H. R. KHANNA, JJ.]
U.P. Agricultural Income-tax Act (3 of 1948), s. 32-Suit for recovery
of tax assessed-Maintainability.
The appellant was assessed to Agricultural income-tax under the U.P.
Agricultural Income-tax Act, 1948,
and was directed to pay it in four
instalments. The appellant defaulted and, when summary proceedi:ogs to
recover the amounts as arrears of land revenue were taken under s. 32
of the Act, it was found that two of the instalments had become time
barred under s. 32(2). In a suit by the respondent State for recovery of
those amounts, the appellant contended that the only remedy open to the
respondent was under s. 32 and that the suit was not maintainable. The
trial court dismissed the suit, but the High Court in appeal decreed the
suit.
Dismissing the appeal to this Court,
HELD : Where a taxing statute provides for a summary
mode of
recovery and is not exhaustive, it will be open to the State to have recourse to any other mode open to it under the general law.
[5320]
Once a notice of den1and is served on the assessee
for payment of
tax due under the Act, and the assessee makes a default _after the date
for payment specified therein has expired, a debt is created in favour
of the State; and the State has the right to recover it by any of the
modes open to it under the general law, unless, as a matter of policy
only a specific mode to the exclusion of any other is prescribed by the
law.
No such prohibition is enacted in s. 32 of the Act. [531C-EJ
Manlckam Chetiar v. Income-tax Officer. Madurai, [1938] VI l.T.R.
180, lnder Chand v. Secretary of State, A.LR. [1942] Patna 81 and Cha·
ganti Raghava Reddy v. State of Andhra Pradesh, A.l.R. [1959] A.P. 631
applied.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1192 of
1970.
Appeal by Certifica1e from the Judgment and order dated
May 20, 1966 of the Allahabad High Court in First Appeal No.
161 ·Of 1960.
Yogeshwar Prasad, Hajii Iqbal Ahmed, S. K. Bagga a.nd S.
Bagga, for the appellant.
S. C. Manchanda and 0. P. Rana, for the respondent.
The Judgment of the Court was delivered by
JAGANMOHAN REDDY, J.
The State of Uttar Pradesh filed a
suit against the appellant for the recovery of a sum of Rs. 26,548-62
being two instalments of the Agricultural Income-tax due from him
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J. P. SAHi v. U.P. STATE (Jaganmohan Reddy, J.)
529
under the U.P. Agricultural Income-tax Act (III of 1948) hereinafter referred to as 'the Act'). The appellant was assessed to Agricultural Income-tax for the year 1359 Fasli, in a sum of Rs.
53,097-25 and was directed to pay the same in four instalments of
Rs. 13,274-31 each payable on December 9, 1952, Febru~ry 9,
1953, April 9, 1953 and June 9, 1953, and accordingly the first
instalment was recovered from him with penalty. Notice to pay
the second and third instalments by April 21,·1953 was served on
him but this amount was not paid. Instead, the appellant filed a
Writ Petition in the Allahabad High Court and obtained a stay
order which was subsequently vacated. Thereafter the State sought
to recover the amout but the appellant filed a revision challenging
the proceedings for recovery on the ground that they had become
time-barred under s. 32(2) of the Act. The Board accepted the
contention and held that no proceedings could be commenced for
the recovery of third and fourth instalments which fell due on April
9, 1953 and June 9, 1953, but in respect cif the proceedings for
the recovery of the second instalment it was held that those proceedings could be continued. An application to the Board for reference to the High Court was dismissed. The appellant then paid
the second instalment.
In view of the decision of the Board, the State of Uttar Pradesh
filed a suit for the recovery of the amounts aforesaid in which the
appellant pleaded that the only remedy open to the State was that
permitted under s. 32(2) of the Act, and that no regular suit was
maintainable. This plea was sustained, and the suit was dismissed
as not maintainable. The High Court, however, in an appeal reversed the judgment of the Trial Court and decreed the suit.
Against that judgment, this appeal is by certificate.
It is contended before us that the only mode of recovery of
arrears of tax or penalty due under the Act is under s. 32, and the
State cannot recover any such amount by any other mode such as
by s. suit. Section 32 is as follows :
"32. Recovery of penalties--(!) The Collector
may, on the motion of assessing authority, recover any
sum imposed by way of penalty under the provisions of
section 17 or section 31, or, where an assessee is in default, the amount assessed as agricultural income-tax as
if it were an arrear of land revenue.
'
(2) No proceedings for the recovery of any sum
p~ya~le under this Act shall be commenced after the expuauon of one year from the date on which the last instal!lle~t fixect under section 30 falls due or after the
exp1rat10n ~f one year from the date on which. any
appeal relatmg to such sum has been disposed of,"
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530
SUPREME COURT REPORTS
[l 973] 3 S.C.R.
Before we deal' with the n1ain contention, it may be stated that
once a notice of demand is served on the assessee for payment of
tax duel under the Act, and the assessee makes a default after the
date for payment specified therein has expired, a debt is createa in
favour of the State. This debt the State can recover by any of the
modes open to it under the general Jaw. · This is also the position
under the Indian Income-tax Act, but it is contended that the analogous provisions of sub-s. (7) of s. 46 of the Indian Income-tax
Act, 1922, or the corresponding provisions of s. 232 of the Incometax Act of 1961 cannot be relied upon for interpreting s. 32 of the
Act inasmuch as there are special provisions in these Acts which
enab'Ie the Revenue to file a suit for the recovery of arrears of tax
due from the assessee. It is true thats. 232 of the Income-tax Act
'05 1961 provides that the modes of recovery under that Act are
not exhaustive, but this clarification, which it is, does not imply
tliat it is only bv virtue of a soecific provision that the legislature
has.conferred this right uoon the Revenue where it did not earlier
possess. nder s. 46(2) of the Act of 1922, the Income-tax Officer
may forward to the Collector a certificate under his signature soecifying the amount of arrears due from an assessee. and the Callee-·
tor. on ·receipt of such certificate, shall oroceed to recover from
s·uch assessee the amount soecified therein as if it were an arrear
of land revenue. Sub-section (7) of the said section orescri6~ a
period of limitation of one year from the last day of the Financial
year in which anv demand is. made under the Act, and thereafter
no proceedings for the recovery can be taken. This section was
amended bv s. 21 of the Indian Income-tax (Amendment) Act,
1953, by which the following exolanation was added :
.
. .
"Explanation.-A proceeding for the recovery of
any sum shall be deemed to have commenced within the
meaning of this section, if some action is taken to recover
the whole or any part of the sum within the period hereinbefore referred to, and for the removal of doubts it is
hereby declared that the several modes of recovery specified in this section are neither mutually exclusive, nor
affect in' any way any other law for the time being in
force relating to the recovery of debts due to Govern-
. ment. and it shall be lawful for the Income-tax Officer. if
for any special reasons to be recorded he so thinks fit, to
nave recourse to .'.!ny such mode of recovery notwith-·
standing that the tax due is being recovered from an
assessee by any other mode."
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It is manifest that this eXplanation does not in any way confer a
right on the Revenue to recover arrears of tax by any.mode ()!her·
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than those provided under that Act. · That right which the State or
thd Revenue has for reeovering arrears of tait which i~ a del;it due
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J. P. SAHi v. U.P. STATE (Jaganmoha11 Reddy, J.)
5:Jl
to it is a general right conferred on it under the law either by a
suu 'or Dy some oma memod open to 1t.
Section 32, thougn H
ctoes not nave an Expianauon analogous to s. 4o nonetneless uoes
not preclude either spec1ticatly or by necessary impllcauon a nghr
to recover the arrears o! tax Clue by a suit. The melhoct prescnbecJ
m tn1s section is one o! the modes of recovery which 1s a summary
rem~Jy. 1t is, however, open to the State to adopt any method
availaDle to it for the recovery of tax in the same way as it would
be open to it to .recover ordinary debt due to it. It can institute a
suit and obtain a decree with costs against the assessee or other
persons liable to pay. It could also probably, without obtammg
a decree or attachment, apply to a Court for ll1e payment of dues
1f there are funds lying to' •me credit of the assessee in the Court,
ur it may perhaJ?.s demand payment in the hands of the receiver
appointed in respect of any property pf the assessee, if due nonce
to all the parties interested in the funds is given. On these aspects,
however, we do not propose to express any views. As already
observed, after an assessment is made upon the assessee quantifying the tax due from him and a demand for the payment thereof is
issued within the period specified therein, it creates a debt payable
by the assessee in favour of the State. It is well established that
once a debt is creati;d, the State has the right to recover it by any
of the modes open to it under the general law, unless as a matter
of policy only ~ specific mode to the exclusion of any other is presc.tiQed by the Jaw.
No such prohibition is enacted in s. 32 of the
Act.
Even prior to the amendment of sub-s. ( 7) of s. 46 of the 1922
Act, several High Courts in this country had taken this view. In
Manickam Chettier v. Income-tax Officer, Madurai('), a Full
Bench of the Madras High Court was dealing with the right of the
Crown to obtain payment of arrears of tax due from the assessee·s
properties sold in execution of a. decree where the question were,
firstly, whether the Government was entitled to claim a priority,
and secondly, whether, as. a matter of procedure, the petition by
the Income-tax Officer to the Civil Court for payment to him from
the amounts to the credit of the assessee, was sustainable. It was
contended before the .Full Bench, as it is contended before us, on
the analogous provisions of section 32 of the Income-tax Act of
1922, that inasmuch as section 46 of that Act nrovides modes for
the recovery of income-tax, the Crown is not entitled to adopt any
different method. This cnntention was repelled.
Leach. C.J.,
observed at p. 185 :
"This section, h·. •.vever, does not profess to be exhaustive and it cannot without express wordo, to that effect
take away from tile Crown the right of enforcing 11av_._n1ent_by any_cithe~_method open to it. Therefore, I do
(1) (1938) VJ l.T.R. 180.
532
SUPREME COURT REPORTS
[1973] 3 s.c.R.
not regard section 46 as imposing a bar to an application
or the nature of the one we are now concerned with."
Varadachariar, J., had expressed a doubt as to the procedure for
recovery,. but he had howev~r no doubt that the Crown had a priority tor the recovery of debts due to it, and consequently agreed
in favour of the view expressed by Leach, C.J. Mockett, J., also
agreed with this view. This case was COl!Sidered by Harris; C.J.,
and Chatterjee, J., of the Patn:i High Court in lnder Chand v.
Secretary of State('). In this case the Patna High Court was confil~ering whether the Crown as a Creditor has th11 ordinary right
of suit against the assessee. Following the Full Bel\ch judgment of
the Madras High Court, it was held that a suit was maintainable.
The contention of Mr. P.R. Das, learned counsel for the appellant,
that the only method by which income-tax may be recovered is that
laid down in s. 46, was repelled by Chatterjee, J. In Chaganti
Raghava Reddy v.
Stat_e of Andhra Pradesh('), the Andhra
Pradesh High Court also took a similar view. On principle.as well
as on the consistent view of the High Courts, it is beyond doubt
that where a taxing statute provides for a summary mode of recovery and is not exhaustive, it will be open to the State to have
recourse to any other mode open to it under the general law.
In this view, the judgment of the High Court is affirmed, and
the appeal is dismissed with costs.
V.P.S.
A ppeat dismissed.
(I) A.l.R. 1942 Patna 87 .
(2) A.LR. 1959 A.P. 631.
LV96Sup,C.l./73-2500-30-8· 74-GIPF.
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