# • THE PREMIER AUTOMOBILES LTD v. S. N. SHRIV ASTA VA & ANR

- **Citation:** [1969] 2 S.C.R. 353
- **Court:** Supreme Court of India
- **Decided:** 1968-10-10
- **Case number:** Writ Petition No. ft! of 1965
- **Bench:** J. C. Shah, V. Ramaswami, G. K. Mitter, K. S. Hegde, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-premier-automobiles-ltd-v-s-n-shriv-asta-va-anr-4503
- **Pages:** 7

## Headnote

Indian Income-tax, 1961, ss. 160, 163, 209, 210, 212-Agent of non·
r,esident whether liable to pay
advance-tax payable by
non-residentPrqvisions creating such liability whether violative of Constitution
of
India, Art. 14.
The Income-tax Officer, Companies Circle, Bombay treating the petitioner as an agent of a non-resident issued a notice of de.mand under s. 156
read with s. 210 of the Indian Income-tax Act, 1961.
By this notice
the petiti_oner was called upon to pay advance tax as agent of the foreign
principal during the financial year 1964-65. The petitioner filed a petition under Art. 32 of the Constitution challenging the demand.
The
contentions in support of the petition were : (i) that under ss. 209 and
210 of the1 India11 !ncomNax Act, 1961 no order fqr payment of advance
tax can be made against an agent of a non-resident; (ii) that a provision which authorises collection of advance-tax from an agent of a
non-resident infringes the equality clause of the Constitution.
In support of the first contention it was urged that since under s. 209(1) the
amount of advance-tax payable by an assessee in the financial year is
to be computed on his total income of the latest previous year in respect
of which he• has been assessed by way of regular 'assessment, an agent
cannot be directed to pay advance-tax the liability whereof
depends
upon the determination of total income of the principal.
HELD : (i) Sections 207 and 208 which impose
liability to pay
advance-tax in a financial year. s. 210 which authorises the Income-tax
Officer to make a demand for payment of advance-tax from a person
who is previously assessed, and s. 212(-3) \Vhich imposes the duty to
make an estimate of the total income likely to be received or to accrue
or arise, and to pay advance-tax jf the total estimated income
exceeds
the maximum amount not chargeable to tax in his case by Rs. 2,500/-
apply to e:very person whether he is assessed in respect of his own income or as a representative assessee, and it is
not possible to imply
in the application of these provisions ·an unexpressed limitation on the
express words of the statute in favour of an agent of a non-resident
principal. [358 C-D]
It is expressly enacted by s. 161 that as regards income in respect
of which. a person is a. representative assessee:, he sh·aU be subject to the
sam~ duties, responsibillties and liabilities as if the income· were income
:ece1.ved by or accruing to or in favour of him beneficially. It is clearly
1mphc1t therein that a representative assessee is not exempt from li'abilitv
to pay aclvance-tax. [357 CJ
-
. Of the liability to pay advance-tax it is not predicated that the previous ye~ should have come to an end before the liability can arise.
The previous year of an
assessee. may in some cases end after
the
com:nencement ~mt befo:e the end of a financial year in which advance
tax 1s. payable : 1t may ~n .~ther cases
commence. and end with
the
financial year.
But the hab1hty to pay advance tax is not in any manner
354
SUPREME COURT REPORTS
(1969] 2 S.C.R.
affected because the previous year ends before or with the. firrancial year.
There is nothing in the Act under which the liability to pay advance
tax of a representative assesseedepends ·upon
determination of the
total for the previous year. [357 C--G]
Accordingly, it could not be held that the petitioner was not liable
to pay advance tax on behalf of his non-resident principal. [358 E---F]
(ii) The plea that the provisions imposing liability to pay advance•
tax upon an ·agent of a non-resident infringe the equality clause of the
Constitution
could not be accepted. The only ground urged, that an
assessee. may escape liability to pay advance tax when his previous year
coincides with the financial year, was without substance. [359 B--C]
ORIGINAL JURISDICTION : Writ Petition No. ft! of 1965.
Petition under Art. 32 of the Constitution of India for enforcement of the fundamental rights.
M. C. Chagla, F. N. Kaka, 0. P. Malhotra and J

## Text

A
•
B
...
c
D
E
F
•
THE PREMIER AUTOMOBILES LTD.
v.
S. N. SHRIV ASTA VA & ANR.
October 10, 1968
(J. C. SHAH, V. RAMASWAMI, G. K. MITTER, K. S. HEGDE AND
A. N. GROVER, JJ.J
Indian Income-tax, 1961, ss. 160, 163, 209, 210, 212-Agent of non·
r,esident whether liable to pay
advance-tax payable by
non-residentPrqvisions creating such liability whether violative of Constitution
of
India, Art. 14.
The Income-tax Officer, Companies Circle, Bombay treating the petitioner as an agent of a non-resident issued a notice of de.mand under s. 156
read with s. 210 of the Indian Income-tax Act, 1961.
By this notice
the petiti_oner was called upon to pay advance tax as agent of the foreign
principal during the financial year 1964-65. The petitioner filed a petition under Art. 32 of the Constitution challenging the demand.
The
contentions in support of the petition were : (i) that under ss. 209 and
210 of the1 India11 !ncomNax Act, 1961 no order fqr payment of advance
tax can be made against an agent of a non-resident; (ii) that a provision which authorises collection of advance-tax from an agent of a
non-resident infringes the equality clause of the Constitution.
In support of the first contention it was urged that since under s. 209(1) the
amount of advance-tax payable by an assessee in the financial year is
to be computed on his total income of the latest previous year in respect
of which he• has been assessed by way of regular 'assessment, an agent
cannot be directed to pay advance-tax the liability whereof
depends
upon the determination of total income of the principal.
HELD : (i) Sections 207 and 208 which impose
liability to pay
advance-tax in a financial year. s. 210 which authorises the Income-tax
Officer to make a demand for payment of advance-tax from a person
who is previously assessed, and s. 212(-3) \Vhich imposes the duty to
make an estimate of the total income likely to be received or to accrue
or arise, and to pay advance-tax jf the total estimated income
exceeds
the maximum amount not chargeable to tax in his case by Rs. 2,500/-
apply to e:very person whether he is assessed in respect of his own income or as a representative assessee, and it is
not possible to imply
in the application of these provisions ·an unexpressed limitation on the
express words of the statute in favour of an agent of a non-resident
principal. [358 C-D]
It is expressly enacted by s. 161 that as regards income in respect
of which. a person is a. representative assessee:, he sh·aU be subject to the
sam~ duties, responsibillties and liabilities as if the income· were income
:ece1.ved by or accruing to or in favour of him beneficially. It is clearly
1mphc1t therein that a representative assessee is not exempt from li'abilitv
to pay aclvance-tax. [357 CJ
-
. Of the liability to pay advance-tax it is not predicated that the previous ye~ should have come to an end before the liability can arise.
The previous year of an
assessee. may in some cases end after
the
com:nencement ~mt befo:e the end of a financial year in which advance
tax 1s. payable : 1t may ~n .~ther cases
commence. and end with
the
financial year.
But the hab1hty to pay advance tax is not in any manner
354
SUPREME COURT REPORTS
(1969] 2 S.C.R.
affected because the previous year ends before or with the. firrancial year.
There is nothing in the Act under which the liability to pay advance
tax of a representative assesseedepends ·upon
determination of the
total for the previous year. [357 C--G]
Accordingly, it could not be held that the petitioner was not liable
to pay advance tax on behalf of his non-resident principal. [358 E---F]
(ii) The plea that the provisions imposing liability to pay advance•
tax upon an ·agent of a non-resident infringe the equality clause of the
Constitution
could not be accepted. The only ground urged, that an
assessee. may escape liability to pay advance tax when his previous year
coincides with the financial year, was without substance. [359 B--C]
ORIGINAL JURISDICTION : Writ Petition No. ft! of 1965.
Petition under Art. 32 of the Constitution of India for enforcement of the fundamental rights.
M. C. Chagla, F. N. Kaka, 0. P. Malhotra and J. B. Dadac/utnji, for the petitioner.
B. Sen, T. A. Ramachandran and R. N. Sachthey, for the respondents.
·
The Judgment of the Court was delivered by
Shah, J_
On February 25, 1965, the Income-tax Officer,
Companies Circle I(3), Bombay, directed that for·the purpose
of the Income-tax Act, 1961, the Premier Automobiles Ltd.-
hereinafter called 'the Company'-be treated as an agent of
M/s Dodge Brothers of United Kingdom-a non-resident Company. On the same day the Income-tax Officer issued a notice of
demand under s. 156 read with s. 210 of the Act calling upon
the Company to pay on or before March l, 1965, advance-tax of
Rs. 11,51,235-91 as agent of the foreign principal during the
financial year 1964-65. The Company then moved a petition in
this Court for an order quashing and setting aside the order under
s . .163 and notice of demand under s. 156 for the assessment year
1965-66 and for an injunction or prohibition restraining the Income-tax Officer from enforcing or implementing the order under
s. 163 and the notice under s. 156 read withs. 210 of the Incometax Act, 1961.
The petition was resisted by
the
Income-tax
Officer.
In support of the petition counsel for the
Company raised
two contentions :
(1) that under ss. 209 and 210 of the Indian Income-tax Act, 1961, no order for payment of advancetax can be made against an agent of a non-resident;
and
( 2) that a provision which authorises collection of
.advance-tax from an agent of a non-resident infringes
/,;),
B;
D•
E.
F'
G:
Hi
'f •
•
~ . ..
;-
\
'<
¥
•
•
~ '
A
•
B
... ,.
c
•
D
E
F
•
G
H
PREMIER AUTOMOBILES V. S. N. SHR!VASTAVA (Shah, J.)
355.
the equality clause of the Constitution and is on that
account void.
Sections 207 and 208 of the Income-tax Act, 1961, insofar
as they are material, provide :
207-"(1) Tax shall be payable in advance in
accordance with the provisions of sections 208 to 219
in the case of income other than income chargeable
under the head "Capital gains.""
208-"Advance tax shall be payable in the financial year-
( a) where the total income
exclusive
Otf
capital
gains of the assessee referred to in sub-clause
( i) of clause (a) of section 209 exceeded the
maximum amount not chargeable to incometax in his case by two thousand five hundred
rupees; or
(b)
"
Section 209 sets out the rules for computation of amount of
advance-tax payable by an assessee in the financial year. Seciion
210 provides by sub-s. (1 )-
"Where a person has been previously assessed by
way of reguhr assessment under this Act or under the
Indian Income-tax Act, 1922, the Income-tax Officer
may, on or after the 1st day of April in the financial
year, by order in writing, require him to pay to the credit
of the Central Government advance-tax determined in
accordance with the provisions of sections 207, 208 and
209 ."
Section 207, 208, 209 and 210 prescribe machmery for imposition of liability for and determination of the quantum of advanceiax in respect of income which is chargeable to income-tax in
the hands of a person on regular assessment.
Under the Income-tax Act, 1961 a person is liable to be
assessed to tax in respect of his own income, and also in respect
of certain classes of income received by or accruing or arising to.
others. He is also liable to be assessed to tax as a representative·
assessee.
That is expressly so enacted by s. 161 (1 ) which pro-·
vides :
"Every representative assessee, as regards the income
in respect of which he is a repre3entative assessee, shall
be subject to the same duties, responsibilities and liabilities as if "the income were income received by or
accr~ing to or in favour of him beneficially, and sh.all
be liable to assessment in his own name in respect of
:356
SUPREME COURT REPORTS
[1969) 2 S.C.R.
that income; but any such assessment sha!l be deem~d
to be made upon him in his representative capacity
only,
"
A representative assessee by sub-s. ( 1) of s. 160 includes amongst
others, the agent of a non-resident in respect of the income of
a non-resident specified in s. 9 (1 )(iJ, and also a person who 1s
treated as an agent under s. 163. By sub-s. (2) a representative
.assessee is deemed to be an assessee for the purpose of the Act.
By s. 162 the representative assessee, who as such pays any sum
.under the Act, may recover the sum so paid from the person on
whose behalf it is paid. Section 163 (1) defines for the purposes
.of the Act -an "agent" in relation to a non-resident.
Resort to
the machinery for assessing a representative assesse.e is however
not obligatory : it is open to the Income-tax Ofiicer to make a
"direct assessment of the person on whose beh«;f or for whose
benefit income therein referred to is receivable", or to recover
·"from such person the tax payable in respect of such income".
On regular assessment an agent of a non-resident 1s, by
virtue of s. 160 (1) read with s. 163 liable to be assessed to tax
.and the tax so assessed may be recovered from him. The agent,
if assessed to tax, has the right to recover tax paid by hin1 from
the person whom he represents : s. 162. Since a non-resident is
.in respect of income which forms part of his total income liable to
be assessed to tax, he may also be called upon to pay advance-
·tax in respect of the income accruing to or received by him which
forms part of his total income chargeable to tax by virtue ot
ss. 4, 5 and 207. So far there is no dispute. Counsel for the
·Company however urged that an agent of a non-resident may be
assessed in regular assessment in respect of the income accruing
A
B
c
D
E
or arising to his principal, but he cannot be called upon to pay
advance-tax even-though he is by virtue of s. 160(2) deemed an
F
assessee for the purposes of the Act. Diverse reasons were sug-.
·gested iu support of that argument. It was said that since under
s. 209 ( 1) the amount of advance-tax payable by an assessee in
the financial year is to be computed ou his total income of the
1aiest previous year in respect of which he has been assessed by
way of regular assessment, an agent cannot b.e directed to pay
advance-tax, the incidence of liability whereof depends upon the
determination of total income of the principal.
We fail to see
any substance in this argument.
Section 207 imposes liability
for payment of advance-tax, and s. 208 prescribes the conditions
·of liability to pay advance-tax. Determination of total income of
the previous year of the assessee is not made a condition of the
liability to pay advance-tax. Advance-tax payable by an assessee
is computed in the manner provided by s. 209 when the assessee
bas been previously assessed to tax.
The Income-tax Officer is
:also enjoined by s. 210 to issue a notice fo a person who has been
G
H
i•
•
•
··-
J ...
I ·
\ .
f
4''
,
' .
•
~---
A
B
c
D
E
F
G
H
PREMIER AUTOMOBILES V. S. N. SHRIVASTAVA (Shah, J.) 357
previously assessed "by way of regular assessment" to pay
advance-tax for the financial year. If the assessee has not been
previously assessed by way of regular assessment, he is required
by s. 212(3) to make an estimate of his total income--excluding
capital gains-if it is likely to exceed the maximum amount not
chargeable to tax by two thousand five hundred rupees.
These
provisions apply to all assessees. If an assessee is chargeable to
tax in respect of his own income or income of others which is
chargeable to tax as his own income, those provisions indisputably
apply. It is expressly enacted by s. 161 that as regards income
in respect of which a person is a representative assessee, he shall
be subject to the same duties, responsibilities and liabilities as if
the income were income received by or accruing to or in favour
of him beneficially. It is clearly implicit therein that a representative assessee is not exempt from liability to pay advance-tax.
Of the liability to pay advance-tax it is not predicated that the
previous year should have come to an end before liability can
arise. The previous year of an assessee may in some cases .end
after the commencement but before the end of a financial year
in which advance-tax is payable : it may in other cases commence
and end with the financial year.
But the liability to pay advancetax is not in any manner affected because the previous year ends
before or with the financial year. Where an assessee's previous
year is the financial year, his total income may not be determined for the previous year before the commencement of the
fin~ncial year, but on that account no exemption from payment
of advance-tax is granted by the Act. On the commencement of
a financial year, a person who is previously assessed to tax is ·
liable to pay advance-tax on demand by the Income-tax Officer
under s. 210. The quantum of tax will be determined by s. 209
and will be adjusted in the manner provided by s. 210(3). That
aJJplies to every assessee whether the tax is liable to be paid by
him on his own total income, or on the income assessed in his
hands as a representative assessee. If he has not been previously
assessed in the character in which he is liable to pay tax, an obligation is imposed bys. 212(3) upon him to make an estimate of
his income and to pay advance-tax. That provision also applies
to his own income and also to the income in respect of which he
is a representative assessee.
There is nothing in the Act under
which the liability to pay advance-tax of a representative assessee
depends upon determination of the total income for the previous
year.
An argument of hardship was also raised. It was said that
an agent of a non-resident may not normally have in his possession any materials on which he may estimate the income in respect of which he may be chargeable to advance-tax, if he has not
been previously assessed to tax as an agent of a non-resident.
That again, in our judgment, is not a ground which exempts an
:358
SUPREME COURT REPORTS
[1969) 2 S.C.R.
.agent from liability to pay advance-tax on behalf of his principal.
Liability· to submit an estimate necessarily implies the duty
to
.secure the requisite information from the non-resident for submitting the estimate .. The tax, it must be remembered,. is assessed
on the agent for and on behalf of the principal, and the Act has
made an express provision enabling the agent to recover from
the principal the tax so paid by him.
Once the Income-tax
·Officer treats a person as an agent of a non-resident, liability to
pay tax on regular assessment arises; and· his liability as a representative assessee to pay advance-tax is. not excluded by any provision of the Act.
In our judgment, ,ss. 207 and 208 which impose liability to
,pay advance-tax in a financial year, s. 210 which authorise the
Income-tax Officer to make a demand for payment of advancetax from a person who is previously assessed, ands. 212(3) which
imposes the duty to make an estimate of the total income likely
to be received or to accrue or arise and to pay advance-tax if the
total estimated income exceeds the maximum amount not charge-
:able to tax in his case by Rs. 2,500, apply to every person whether
he is assessed in respect of his own income or as a representative
assessee, and we are unable to imply an unexpressed limitation
en the express words of the statute in favour of an agent of a
non-resident principal.
In the present case by order dated February 25,
1965, for
the assessment year 1964-65 the Company was tr.eaied as an agent
of the non-resident principal.
Since the Company was treated
as an agent of the non-resident, it became liable to pay advancetax in the financial year 1964-65. By viriue of s. 207 read with
s. 208 the declar'ation that the Company was an agent involved
liability to pay advance-tax as well as tax assessed on regular
assessment.
We are unable to hold that the liability to pay
advance-tax did not arise against the Company.
The plea that the provisions imposing liability to pay advancetax upon an agent of a non-resident infringe the equality clause
of the Constitution has no substance. As already observed, the
liability to pay advance-tax arises under ss. 207 and 208 and its
quantum is determined by ss. 209, 210 and 212(3), and it is not
predicated of the accrual of liability that the total income of the
previous year should be ascertained or precisely asceriainable
when demand is made by the Income-tax Officer under s. 210, or
when the assessee is required to make an estimate. The assumption that an assessee whose year of account coincides with the
financial year is not in respect of that year liable to pay advancetax is not warranted.
The computation of advance-tax is not
dependent upon the completion of the previous year : it depends
upon the rules prescribed by ss. 209, 210 and 212. Every person
·who has been previously assessed to tax is liable when ordered
A
B
c
D
E
F
G
H
< ..
' _,
..
•
' -
'
..
•
A
B
·C
PREMIER AUTOMOBILES v. S. N. SHRIVASTAVA (Shah, J.)
359
by the Income-tax Officer to pay advance-tax, subject to the right
to make an estimate under s. 212(1). A person who has not
been previously assessed but whose income is likely to exceed the
specified amount is also liable to pay advance-tax. The Act does
not accord discriminatory treatment between different assessees. ·
Payment of advance-tax is on account and is always liable to be
adjusted against the tax assessed on regular assessment.
That
again applies to all assessees. It is then difficult to appreciate the
grounds on which the plea of denial of equal protection may be
·sustained. The only ground urged, that "!ln assessee may escape
liability to pay advance-tax where his previous year coincides
with the financial year, is without substance, and no other ground
is set up in support of the plea of violation of the guarantee of
equality under Art. 14 of the Constitution.
The petition therefore fails and is dismissed with costs.
G.C.
Petition dismissed.