judgement:
Civil Appeal No. 23 of 1966.
Appeal from the judgment and decree dated May 11, 1962 of the Patna High Court in Appeal from Original Decree No. 169 of 1958.
U.P. Singh, for the appellants.
Sarjoo Prasad and R.C. Prasad, for respondents Nos. 1 and 2.
The Judgment of the Court was delivered by Bachawat J.
The plaintiffs, defendants 5 to 7 and the ancestor of defendants 8 to 13 were the sixteen anna proprietors of certain villages in district Shahbad.
By a registered deed dated October 3, 1944 they leased the forest rights in the villages to the defendants 1 and 2 for a period of 9 years ending Bhado 30, 1360 Fasli corresponding to September 2, 1953 at an annual.
rent of Rs. 16,000.
The plaintiffs had 6 annas share in the proprietary rights in the villages and Rs. 6,000 was fixed as their share of the annual rent.
The defendant No. 3 was a transferee of a portion of a lessees ' interest from defendant 1.
On September 3, 1954 the plaintiffs instituted a suit claiming a decree against defendants 1 and 2 for Rs. 36,405 on account of their share of the rent for 1356 to 1360 Faslis and interest thereon at 1% per annum.
During the pendency of the suit, defendant 2 died and his heirs were substituted as defendants 2 and 2(a).
The Trial Court decreed the suit on contest against defendants 2 and sup./69 6 362 2(a) and ex parte against defendants 1 and 3 with future interest and costs.
On appeal, the High Court held that (1 ) as defendant 2 had only 4 anna share in the lessees ' interest as mentioned in the lease deed and as he had acquired another one anna share in the lessees interest subsequently, defendants 2 and 2(a) were liable to pay only 5 annas share in the annual rent, that is to say, Rs. 1,875 per annum and defendants 1 and 3 were liable to pay the balance rent; (2) as the lease deed granted a lease of forest rights, the suit was governed by article 2(b)(i) of Schedule III of the Bihar Tenancy Act, 1885 and consequently the suit in respect of rent for 1356 and 1357 Faslis was barred by limitation, and (3) in view of sec.
67 of the Bihar Tenancy Act the plaintiffs could claim interest at the rate of 61/4% per annum only.
Accordingly the High Court allowed the appeal in part and ' passed a decree against defendants 2 and 2(a) for 5 annas share of the rent for 1358 to 1360 Faslis and a separate decree against defendants 1 and 3 for the balance rent for those years with interest at 61/4 % per annum.
The plaintiffs have filed the present appeal after obtaining a certificate from the High Court.
The appellants challenge the correctness of all the findings of the High Court.
Clause 3 of the lease deed provided: "that the lessees shall pay an annual Zama of Rs. 16,000 in respect of the thika property on 1st Kuar of every year.
If for any reason, the rent for two consecutive years shall fall into arrears in that case the lessors shall be competent to enter into khas possession and occupation of the thika property and to this the lessees shall ' have no objection and in case of making default the lessees shall pay an interest at the rate of Re. 1 per cent till the date of payment.
The lessors either separately or jointly shall realise (the amount) to the extent of their respective shares according to their choice by instituting in court with interest thereon mentioned above from the persons and properties of the lessees.
" At the end of the lease it was stated that defendant 1 had twelve anna share in the lessees ' interest and his share of the rent was Rs. 12000.
It was also stated that defendant 2 had 4 anna share in the lessees ' interest and his share of the rent was Rs. 4GO0.
Clause 3 of the deed clearly shows that the lessees were jointly liable to pay the annual rent of Rs. 16000.
The deed mentioned the share of each lessee and the annual rent for the purpose of indicating what amount would be contributed by each of them towards the rent jointly payable by them.
The joint liability of the lessees is clearly indicated by the provision that entire lease 363 would be terminable on default of payment of rent for two consecutive years.
Having regard to sec.
43 of the defendants 1 and 2 were jointly and severally liable to pay the rent.
It was not disputed before the High Court that the liability of defendant 3 stood on the same footing.
The High Court was in error in holding that defendant 2 was liable to pay only 5 anna share in the rent.
The High Court was right in allowing the defendant to raise the point of limitation, though the plea was not taken in the written statement.
Under section 184 of the Bihar Tenancy Act a suit instituted after the expiry of the period of limitation is liable to be dismissed though limitation has not been pleaded learned Counsel for the appellants could not tell us what further evidence his clients could adduce on this point.
In the circumstances, the absence of the plea of limitation in the written statement did not cause the appellants any prejudice.
On a careful reading of the lease deed, we are satisfied that it granted a lease in respect of forest rights only.
It gave the lessees the right to cut and appropriate trees of certain types and the fruits and flowers of certain fruit bearing trees.
The right to open roads and to construct buildings were incidental to the right to enjoy the forest produce.
The suit is for recovery of rent in respect of forest produce and saving regard to sec.
193 of the Bihar Tenancy Act is governed by article 2(b)(i) of the Schedule III thereto.
This view is supported by the decisions of the Calcutta High Court in Abdulullah vs Asraf Ali(1) and Bande Ali Fakir vs
Amud Sarkar(2).
The special period of limitation applies though the claim for arrears of rent is rounded on a registered instrument, (see Mackenzie vs Haji Syed Muhammad Ali Khan.
(3)The High Court was right in holding that the suit in respect of rent for Fasli years 1356 and 1357 was barred by limitation.
Having regard to sec.
193 all the provisions of the Act applied to a suit.
Section 67 (1 ) provides that arrears of rent shall bear simple interest at the rate of 61/4% per annum.
The section overrides the contractual stipulation that the interest would be payable at 1% per annum.
The High Court was right in holding that interest was payable at the rate of 61/4% per annum only.
In the result, the appeal is allowed in part and it is declared that defendants 1, 2, 2(a) and 3 are jointly and severally liable to pay to the plaintiffs Rs. 6000 per annum on account of the plaintiffs ' share of rent for Fasli years 1358, 1359 and 1360 and simple interest thereon at the rate of 61/4% per annum upto date.
We direct that a decree be drawn up accordingly.
The decree will carry future interest on the principal sum at the rate of 6% (1) 7 C.L.J. 152.
(2) 19C.W.N. 415.
(3) I.L.R.19 Cal.
1. 364 per annum.
The aforesaid defendants will pay to the plaintiffs proportionate costs of the suit in the Trial Court.
The parties will bear their own costs of the appeal in the High Court and in this Court.
This decree will be without prejudice to the payments, if any, made by the defendants to the plaintiffs after the institution the suit.
Y.P. Appeal partly allowed.

summary/full:
The plaintiffs defendants 5 to 7 and the ancestor of defendants 8 to 13 leased the forest rights in theft villages to defendants 1 and 2 at an annual rental.
The deed mentioned the share of each lessee and the annual rent for the purpose of indicating what amount would be contributed by each .of them towards the rent jointly payable by them.
It was stated in the lease that the entire lease would be terminable on default of payment of rent for two.
consecutive years and the lessee shall pay interest at Re. 1 per cent in case of default, and that the lessors either separately or jointly shall realise the amount according to their choice.
Defendant 3 was a transferee of a portion of lessees ' interest from defendant 1.
The plaintiff lessors flied a suit in September 1954 claiming a decree of their share of rent for 1356 to 1360 Fasli and interest thereon.
The plea that suit was.
barred by limitation was not taken in the written statement.
Defendant 2 died and his heirs were substituted as defendants 2 and 2(a).
The trial court decreed the suit.
On appeal, the High Court held that (i) the defendants 1 to 3 were liable to pay the amount of the annual rent up to the extent of their respective shares; (ii) as the lease deed granted a lease of forest rights, the suit was governed by article 2(b)(1) of Schedule HI of the Bihar Tenancy Act, 1885 and consequently the suit in respect of rent for 1356 and 1357 Faslis was barred by limitation; and (iii) in view of section 67 of the Bihar Tenancy Act the plaintiffs could claim at the rate of 61/2% per annum only.
In appeal.
this Court, HELD: The defendants 1 to 3 were jointly and severally liable to pay the plaintiff 's share of the rent for 1358, 1359 and 1360 Faslis and simple interest thereon at 61/4% per annum up.
to date.
(i) The deed mentioned the share of each lessee and the annual rent for the purpose of indicating what amount would be contributed by each of them towards the rent jointly payable by them.
The joint liability of the lessees was clearly indicated by the provision that the entire lease would be terminable on default on payment of rent for two consecutive years.
Having regard to section 43 of the defendants 1 and 2 were jointly and severally liable to pay the rent, and the liability of defendant 3 stood on the same footing.
[362 H 363B] (ii) Under section 184 of the Bihar Tenancy Act a suit instituted after the expiry of the period of limitation is liable to be dismissed though limitation is not pleaded.
The respondent was rightly allowed to raise the 361 point of limitation though the plea was not taken in the written statement.
[363 C] The lease deed granted a lease in respect of forest rights only.
It gave the lessees the right to cut and appropriate trees of certain types and the fruits and flowers of certain fruit bearing trees.
The right to open roads and to construct buildings were incidental to the right to enjoy a forest produce.
The suit was for recovery of rent in respect of forest produce and having regard to section 193 of the Bihar Tenancy Act was governed by article 2(b)(1) of the Schedule III therefore.
The special period of limitation applied though the claim for arrears of rent was claimed on a registered document.
[363 D F] The suit in respect of rent for 1356 and 1357 was barred by limitation.
Abdulullah vs Asraf Ali, 7 C.L.J. 152, Bande Ali Fakir vs Amud Sarkar, and Mackenzie vs Haji Syed Muhammad Ali Khan, I.L.R. , approved.
(iii) Interest was payable at the rate of 6 1/4% per annum only.
By section 193 of the Bihar Tenancy Act all the provisions of the Act applied to the suit.
Section 67(1) provides that arrears of rent shall bear simple interest at the rate of 61/2% per annum.
The section overrides the contractual stipulation that the interest be payable at 1% per annum.[363 F G]


judgement:
l Appeal No. 61 of 1951.
Appeal from the Judgment and Decree dated the 10th November, 1944.
, of the High Court of Judicature at Lahore in Civil Regular First Appeal No. 259 of 1942, arising out of the Judgment and Decree dated the 29th July, 1942, of the Court of the Extra Assistant Settlement Officer and Assistant Collector of the 61 First Grade as Senior Sub Judge, Gurgaon, in Suit No. 35 of 1940 41.
Dr. Bakshi Tek Chand, (Ram Nath Chadha and Ganpat Rai, with him) for the appellants.
Naunit Lal for respondents Nos. 1, 3, 7 to 11 and 13 to 19.
April 21.
The Judgment of the Court was delivered by GHULAM HASAN J.
This appeal is brought against the judgment and decree dated November 10, 1944, of the Lahore High Court (Sir Trevor Harries C. J. and Mr. Justice Mahajan, the present Chief Justice of this Court) reversing the judgment and decree of the Assist,ant Collector, First Grade, Gurgaon, as Senior Subordinate Judge, and dismissing the plaintiffs appellants ' suit.
Dalmir, Dilmor and Chhinga were three brothers and Amir Khan and Sharif Khan were the two collaterals.
Alif Khan was the son of Amir Khan.
The present dispute is between the descendants of the five branches of the family.
The suit was brought by the descendants of Dalmir against the descendants of Dilmor, Cbhinga, Alif Khan and Sharif Khan.
To this suit were also impleaded as defendants some of the descendants of Dalmir.
The plaintiffs claimed a declaration that they along with defendants Nos. 17 to 19 are full owners in possession of 819 Bighas 19 Biswas land situate in village Manota Tehsil Ferozepore Jhirka.
in the Gurgaon District, that the defendants Nos.
I to 16 had no right to claim partition of that land and that they were entitled only to the produce of land measuring 140 Bighas 19 Biswas possessed by them without payment of land revenue.
The aforesaid defendants, it was alleged, were bound by the terms embodied in the agreement dated September II, 1861, in the Wajib ul arz of that Settlement and repeated in subsequent Settlements which debarred them from any right to.
claim partition.
Defendants Nos.
I to 16, who are the contesting defendants, pleaded in defence that the plaintiffs along with the pro forma defendants Nos. 17 to 19 were recorded in revenue 62 papers as owners of 1/5th share in the land in dispute, while the contesting defendants were recorded as owners of the remaining 4/5th share and as such they were entitled to claim partition.
The defendants denied that any agreement or condition in the Wajib ul arz restricting their right to partition was binding after the expiry of the term of the Settlement and contended that it could not operate as a bar to their claim to partition.
The Assistant Collector trying the suit as a Civil, Court under section 117 of the Punjab Land Revenue Act (Act XVII of 1887) decreed the claim.
He held that the contesting defendants were entitled only to get produce of 140 Bighas and 19 Biswas of land in their possession without payment of land revenue and had no interest in the remaining land.
This decree was reversed on appeal, the High Court holding that the defendants are entitled to 4/5th share as proprietors, that the original agreement repeated in subsequent Settlements was binding on the parties so long as the Settlements were in force, that it ceased to have any effect after the expiry of the Settlements and that the renewal of its terms in the Settlement of 1938 39 was not binding as they were not agreed to by the contesting defendants.
The learned Judges held that the judgment (D. 4) dated June 15, 1893 of the Chief Court of Punjab inter parties, which held that the prohibition of partition contained in the Wajib ul arz did not survive the expiry of the period of the Settlement, was binding upon them.
They took the view that the contesting defendants being.
proprietors, the right of partition was inherent in their right of ownership.
As a result of these findings the suit was dismissed.
We have heard Dr. Tek Chand, learned counsel for the appellants, in support of the appeal at length but we are of opinion that there is no force in the appeal.
The parties are Meos and the land in dispute is situate in village Manota in Tehsil Ferozepore Jhirka in Gurgaon District.
According to the Gazetteer of Gurgaon District (1910) the Meos owned nearly the whole of the Ferozepore Tehsil and various other villages in Gurgaon.
They are divided into several sub tribes, and these sub tribes possess a strong feeling of unity and the 63 power of corporate action.
It was stated that " in the mutiny the members of each sub division generally acted together; and district officers are advised to keep themselves informed of the names and characters of the men, who from time to time possess considerable influence over their fellow tribesmen." (P. 60).
The documentary evidence regarding the title to the property in dispute ranges over a period of four Settlements, each Settlement being for a period of thirty years.
The first Settlement was made in 1839 42, the second in 1872 1879, the third in 1903 08 and the last in 1938 39 which is the current Settlement.
The village was assessed to annual revenue of Rs. 323 for the, period of 30 years from 1246 to 1275 Fasli (corresponding to 1839 1862 A.D.) which was made payable by Dalmir Lamberdar who is described as sole owner.
The Settlement papers were, however, lost during the mutiny and after taking fresh measurements the settle : ment papers were completed.
Alif Khan, Dalmir and Dilmor signed what is called an agreement binding them by all conditions, provisions and declarations made at the time of the Settlement (P. 12).
It is common ground that the property was originally, granted in 1822 A. D. to Dalmir by Nawab Ahmad Bakhsh Khan Rais of Ferozepore Jhirka.
The grant is not in writing and there is no contemporaneous record which could throw any light on its terms.
Dalmir claimed to be the sole grantee with full proprietary rights.
A number of documents are attached to the Settlement record of 1863.
They are important as showing how the property was dealt with by the Settlement authorities from time to time and the state of the revenue records.
The earliest document on record appe ars to be an agreement dated September 28, 186 1, which is incorporated in paragraph 18 of the Wajib ul arz of village Manota.
It says that the tenure of the village is zamindari.
Dalmir is entitled to profit and liable for loss in respect of the entire village.
The other biswadars are owners of the produce of the land cultivated by them but they pay no revenue.
This, it is stated, is the benefit they enjoy (P. 35 = D. II).
This document is signed in token of verification by Dalmir Lamberdar, 64 Dilmor, Alif Khan Biswadar and Phusa Biswadar, who ,ire described as proprietors.
Phusa, we are told, is the alias of Chhinga.
There is a report of Mr. John Lawrence (later Lord Lawrence), Settlement Officer referred to in the Gazetteer, which says that the arrange ment then in vogue was that a few owners shared the profit and loss of the land revenue and the others were exempted from responsibility.
Manota was one of the few villages which continued to follow the system (P. 179).
Paragraph 2 of the Wajib ul arz which relates to the mode of partition, after stating the area of the village as 837 Bighas and 9 Biswas, says "When we, the co sharers want to partition it, we ourselves will do so of our accord in accordance with our shares shown in the Khewat papers or through the village Patwari in the,presence of Panchayat of the brotherhood.
The new abadi (cultivation of new land) will be made with the consent of all the biswadars.
One biswdar is not competent to make a new abadi".
D. 10).
P. 4 is a statement showing apportionment of Jama, (i.e., Khewat money) in the village.
After stating that the Settlement of the village was made in the name, of Dalmir, sole owner, and that he alone was entitled, to profit and liable for loss, it goes on to say that Alif Khan son of Amir and Phusa son of Chhinga and Dilmor having cultivated a specified area of land be.
came owners of the produce of the land without payment of rent and also became entitled to profit and liable for loss.
Paragraph 10 of the Wajibul arz contains an agreement about trees.
It shows that the trees standing in the house or field of the owner belong to him, and he is competent to plant and cut them.
So far as the occupancy tenants are concerned, the trees standing in their houses also belong to them as they cultivate land but Dalmir alone had the right to cut or sell them.
These are all the material documents pertaining to the Settlement record of 1863.
We now come to the Settlement record of is an important document.
Paragraph I which deals with the history of the village is reproduced below: ' "Fifty two years ago in Sambat 1880, Dalmir, Caste Meo, Got Sogan, along with Dilmor and Chhinga, his real brothers, took possession of the area of this village, with the permission of Nawab Ahmed Bakhshi Khan Sahib.
Rais of Ferozepore, who granted him a Biswadari estate without payment of any Nazrana in lieu of the services rendered by him and made this desolate, tract abad.
He along with his brothers jointly remained in possession thereof and enjoyed profit and bore loss.
After him Amir Khan became abad in the village and along with us, proprietors, remained in possession.
Accordingly, we the proprietors got his name, entered as a Biswadar at the time of the Revised Settlement.
After him Sharif Khan, son of Ghariba, who was also a collateral, came to this village in Sambat 1916 and remained in possession along with us proprietors.
Accordingly we got his name also recorded along with ours on the 14th September, 1863.
We have up to this day been joint owners.
This village has never been partitioned.
Shares are given in the Khewat papers.
," This document shows that although the name of Dalmir is mentioned as being the sole grantee by virtue of the services rendered by him to the Nawab, his two brothers also were in joint possession with him.
Not only this but Amir Khan and Sharif Khan, who are both collaterals, also had joint possession of the village.
They are all described as proprietors and their names are recorded as joint owners.
The authenticity of this documentisbeyondquestion.
It out sat the root of the theory of Dalmir being the sole owner.
It is true that Dalmir was mentioned as the sole owner in D. 4 but the grant was treated by Dalmir himself as being the joint property of his two brothers and the two couaterals whether or not it was originally intended for the benefit of the family as understood in its widest sense.
Paragraph 5 of the Wajib ul arz relating to the tenure of the village and the mode of payment of revenue 9 66 says that the village is bilijmal (joint) and that the sons of Dalmir shall continue to pay the Government revenue in respect of their own shares as well as the shares of the sons of his two brothers and the shares of the collaterals.
The reason given is that no money is taken from the said co sharers on account of relationship.
(P. 15).
This statement is consistent only with joint ownership.
Paragraph 7 of the Wajib ul arz also describes the tenure as Zamindari bilijmal and Repeats the statement that the other co sharers of Dalmir do not pay any rent or Jama in respect of the land cultivated by them on account of their relationship.
No single sharer has the right to reclaim the Banjar area without the consent of all the proprietors (P. 19).
This Wajib ul arz is verified by the proprietors, tenants, Bhandadars (a village servant to whom cultivation is allotted rent free), Kamins (menials) and the inhabitants of the village.
It is admittedly signed by the ancestors of the parties (P. 22).
The Khewat and the Khatauni (P. 31) prepared during the Settlement both record the five branches of the family as being in possession of a 1/5th share each.
A similar entry is to be found in the Khatauni (D. 18).
It appears that during the currency of this Settlement two suits for partition were filed in the Revenue Court but the partition was not allowed (P. 5).
Coming to the Settlement of 1903 08 we find a Statement in clause 3 of the Wajib ul arz (D. 13) that the descendants of Dalmir alone could get the land partitioned in five equal shares but the descendants of the other four co sharers, who were, cultivating land without payment of revenue, owing to non rendition of account in respect of profit and loss of their respective shares, could not have the land partitioned.
, Lastly we come to the Jamabandi of 1937 38 (P. 1).
This shows that all the five branches were entered as being in possession of equal shares.
Mehrab, grandson of Dalmir and one of the plaintiffs, who gave evidence as P. W. 5 admitted that defendants 67 Nos.
I to 16 were shown as proprietors in the Jamabandi but he never raised any objection to it.
He also admitted that Mehar Singh, grandson of Sharif Khan, sold his half share to Chhote Khan and Bhola, his coplaintiffs and that they did not challenge the same.
We may now refer to the civil litigation which started in 1891.
It arose upon the rejection of the applications for partition made by Alif Khan and Sharif Khan on September 24, 1890, by the Assistant Collector.
Alif Khan filed a suit against the descendants of the three brothers and the descendants of Sharif Khan.
In the plaint (D. 1) he claimed a declaration of 1/5th share of the entire village.
The sons of Dalmir denied the claim.
In their written statement (B. 2) they alleged that in previous proceedings they had deniedthe plaintiffs ' right to partition and that the defendants had been in adverse possession of the land and that the plaintiffs and others had been cultivating land as Bhandadars (village servants).
The Subordinate Judge decreed the claim (D. 3).
This decree was upheld by the Divisional Judge, but the judgment is not on record.
In second appeal the Chief Court amended the decree by declaring that the plaintiff was entitled to 1/5th share in the village to be enjoyed subject to the qualifications and restrictions set forth in the Khewat and the Wajib ul arz which do not permit of his obtaining partition while the present Wajib ul arz was in force.
This decree was made upon the admission made by the defendants in the course of the arguments.
Paragraph 8 of the Wajib ul arz of 1877 (D. 12=p.
16) which was the subject of conflicting interpretation by the parties was interpreted by the Chief Court to mean that its effect was to prohibit general division among the co sharers while the Wajibul arz was still in force.
They held that the five sons of Dalmir could separate their shares inter se but not the other co sharers.
We are of opinion that this judgment which is inter partes finally set at rest the controversy between them by declaring that the parties were joint owners holding equal shares and constitutes res judicata.
The judgment is also in conformity with the true effect of the documentary evidence on the 68 record.
No doubt the name of Dalmir was entered.
in some documents as the sole owner but that entry by itself is not conclusive and must be read in conjunction with the other entries in the Settlement record.
Dalmir may have been the original grantee but his own conduct shows that he did not regard himself as absolute owner to the exclusion of his own brothers.
Indeed according to the entry he even treated his collaterals on an equal footing.
His description as sole owner in the circumstances carries no value.
Whatever may have been the position at the time of the original grant, the subsequent conduct of the parties unmistakably shows that all the five branches were treated as owners in equal shares.
Dalmir as the lamberdar was made responsible for the payment of the entire landrevenue.
He was entitled to profit and was responsible for loss.
The others were given less land and were exempted from payment of rent or revenue on account of relationship.
This arrangement appears to have been fairly general in those days as appears from the report of Mr. (later Lord) Lawrence, Settlement Officer, re ferred to above.
The arrangement was that ' a few owners shared the profit and loss of the land revenue assessment while the others were exempted.
The Government was primarily interested in the payment of the revenue and they apparently found it more convenient to hold the head or the most influential member of the family as responsible for payment of the entire revenue leaving it to him to make such arrangement among his co sharers as he thought fit.
In later Settlements the owners accepting responsibility for the payment of the land revenue did not find it profitable and the system gradually disappeared.
Lord Lawrence remarks that at the third Settlement the number of villages which still continued the system was reduced to three and one of these was Manota in Ferozepore Tehsil (page 179).
This accounts for Dalmir being called the sole owner and being made responsible for payment of Government revenue.
By section 44 of the Punjab Land Revenue Act an entry made in the record of rights or in an annual record shall be presumed to be, true until the contrary 69 is proved.
That entries in the Jamabandies fall within the purview of the record of rights under section 31 of the Act admits of no doubt.
Section, 16 of the old Act (XXIII of 1871) laid down that entries in the record of rights made or authenticated at a regular Settlement shall be presumed to be true.
We are satisfied that the materials on the record taken as a whole justify the view which has been taken by the High Court that the contesting defendants are joint owners and not mere cultivators who are not entitled to claim partition of the property.
The judgment of the Chief Court also recognized the proprietary right of the defendants but qualified it by the declaration that so long as the Settlement was in force, they were not entitled to partition by reason of their agreement recorded in the Settlement papers.
The Settlements of 1877 and 1908 09 have ceased to operate and the entry in the current Settlement of 1938 39 having been made under the orders of the Collector has no value when the contesting defendants did not agree to its being incorporated.
The previous agreement was not one for perpetuity but for a limited period only and there is no reason in law why the prohibition against partition should be now enforced against the contesting defend.
It has been held in a number of cases that the entry regarding agreement in a Wajib ul arz holds good during the period of the Settlement in which it is made and becomes inoperative when the Settlement has come to an end: Hira and others vs Muhamadi and Other8 (1); Allah Bakhsh and Others.
Mirza Bashir uddin and Others (2) and Lieut.
Chaudhri Chattar Singh vs Mt. Shugni and Another (3).
We agree with the High Court in holding that partition is a right incident to the ownership of property and once the defendants are held.
as co owners, their right to partition cannot be resisted.
It was contended by Dr. Tek Chand that the appellants had acquired title by adverse possession over the defendants ' share for more than 56 years.
This plea was raised in the plaint but evidently it w as not pressed (1)16 P.R. 1915 (P. 89).
(2)1932 LIT.Rn.
(3) A.I.R. 194 Lah.
70 for no issue was framed, nor any finding recorded by the trial Court.
This point is not taken even in the grounds of appeal to this Court.
The plea has no substance and was rightly rejected by the High Court on the ground that possession was under an arrangement between the co sharers.
and no question of adverse possession could arise under the circumstances.
We hold that there is no force in this appeal and dismiss it with costs.
Appeal dismissed.

dataset_name: IN-Abs

summary/full:
Held, that an entry regarding agreement in a Wajib ul arz holds good during the currency of the Settlement and does not survive the expiry of the period of Settlement.
Hira and Others vs Muhamadi and Others (16 P.R. 1915 at P. 89), Allah Bakhsh and Others vs Mirza Bashir ud Din and Others and Lieut.
Chaudhri Chattar Singh vs Mt. Shugni and Another (A.I.R. referred to.


judgement:
vil Appeals Nos.
2403 & 2404 of 1966.
Appeals from the judgment and order dated April 4, 1963 of the Assam and Nagaland High Court in Civil Rule Nos. 90 of 1960 and 382 of 1961.
D.N. Mukherjee, for the appellant.
Naunit Lal and B.P. Singh, for the respondents.
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought by certificate from the judgment of the High Court of Assam and Nagaland dated April 4, 1963, in Civil Rule No. 90 of 1960 and Civil Rule No. 382 of 1961, whereby the High Court dismissed the petitions under articles 226 and 227 of the Constitution filed by the appellant.
Messrs. Hardeo Das Jagan Nath (hereinafter called the 'appellant ') is a partnership firm carrying on business at Mawk 263 har, Shillong in the District of United Khasi and Jaintia Hills.
By a notification issued under Rule 6 of the Assam Sales Tax Rules 1947, the Commissioner of Taxes, Assam fixed May 20, 1948 as the date by which the dealers of Shillong administered area had to make applications for registration under the Assam Sales Tax Act, 1947 ( 17 of 1947 ), hereinafter called the 'Act '.
By notification dated April 15, 1948, the Government of India had extended the provisions of the Act with slight modifications to the administered area in Shillong under section 4 of the Extra Provincial Jurisdiction Act, 1947.
The appellant got itself registered under the Act.
Upto the half yearly return periods ending September 30, 1957, the appellant was assessed to sales tax and the tax was realised by the Sales Tax Authorities.
On March 6, 1959, the Superintendent of Taxes, Shillong, respondent No. 4 raided the business premises of the appellant and seized the account books etc.
The appellant filed a petition under article 226 of the Constitution in the High Court.
By its order dated June 3, 1960, the High Court directed the Deputy Commissioner of Taxes, Assam to return the seized books and documents within three weeks of the date of the order to.
the appellant.
As directed by the High Court, the documents were returned to the appellant but on the basis of the information received from the account books the Superintendent of Taxes issued notices dated April 4, 1959 under section 19A of the Act for reassessment of the appellant in respect of the half yearly return periods ending on September 30, 1956, March 31, 1957 and September 30, 1957.
Thereafter, ex parte reassessment was made for the return period ending September 30, 1956 by an order dated July 8, 1959 and for return periods ending March 31, 1957 and September 30, 1957 by orders dated July 24, 1959 and tax amounting to Rs. 1,22,933/ was levied for these three periods.
A further sum of Rs. 47,504.70 was levied in respect of the return period ending March 31, 1958 by an ex parte assessment order dated March 23, 1959.
For the other return period ending September 30, 1958; a sum of Rs. 49,427.90 was levied by an ex parte assessment order dated April 8, 1959.
For these two return periods a penalty of Rs. 1,000/ in respect of each return was also levied by two separate orders dated June 27, 1959.
Thus the total amount of salestax and penalty amounting to Rs. 2,19,865.60 in respect of the five return periods was levied.
The appellant paid Rs. 20,074.68 at the time of original assessments in respect of the periods ending on September 30, 1956, March 31, 1957 and September 30, 1957.
The appellant thereafter filed appeals against all the seven ex parte orders before the Assistant Commissioner of Taxes, Assam.
Along with the memoranda of appeals for the periods ending March 31, 1958 and September 30, 1958, two separate applications were made by the appellant alleging that it was not 264 necessary to pay the assessed tax since the provisions of section 30 of the Act as amended did not apply to the case and it was prayed that appeals should be admitted without payment of the assessed tax.
The contention of the appellant was rejected by the Assist.ant Commissioner though he reduced the amount of deposit for the periods ending March 31, 1958 and September 30, 1958.
The .appellant moved the Commissioner of Taxes in revision, but the order of the Assistant Commissioner was affirmed by the Commissioner of Taxes though he reduced the amount further.
On the application of the appellant the matter was referred to the High Court which held that the amended section 30 of the Act was intravires.
In the meantime, the appellant also applied in respect of the appeals relating to the periods ending September 30, 1956, March 31, 1957 and September 30, 1957 as well as the penalty appeals of periods ending on March 31, 1958 and September 30, 1958 and prayed for admission of these appeals without payment of the assessed tax.
In this case also the amount was reduced by the Assistant Commissioner of Taxes but the matter was kept pending till the disposal of the reference by the High Court.
On May 21, 1960, the appellant filed separate petitions before the Assistant Commissioner praying that as the financial condition of the appellant was not good the appellant may be allowed to furnish reasonable security in lieu of cash and the appeals may be admitted on such security.
By his order dated May 23, 1960 the Assistant Commissioner of Taxes fixed June 8, 1960 f, or payment of the amount required for admission of the appeals, failing which the appeals were ordered to be dismissed.
The appellant then moved the Commissioner praying that in view of his financial difficulty he should be .allowed to furnish reasonable security in lieu of cash to be paid.
The application was rejected by the Commissioner on June 21, 1960.
Thereafter all the five appeals were rejected by a common order dated June 22, 1960 and the two appeals against the imposition of penalty were also summarily rejected by an order dated June 22, 1960.
The appellant was further asked to show cause why penalty should not have been imposed in respect of the periods ending September 30, 1956, March 31, 1957 and September 30, 1957.
The appellant filed a petition to the High Court under article 226 of the Constitution, being Civil Rule No. 90 of 1960 praying for a writ to quash the order of the Commissioner dismissing the appeals in respect of the five periods and for further reliefs.
The appellant also filed another petition under article 226, being Civil Rule No. 382 of 1961 asking for similar reliefs with regard to the periods ending March 31, 1959, September 30, 1959, March 31, 1960, September 30, 1960 and March 31, 1961.
The writ petitions were dismissed by the High Court by a common judgment dated April 4, 1963.
The first question to be considered in these appeals is whether the provisions of the Act were validly extended to the Shillong 265 Administered Areas.
By a notification dated April 15, 1948 the Central Government extended the provisions of the Act to the Shillong Administered Areas including Bara Bazar in exercise of powers conferred by section 4 of the Extra Provincial Jurisdiction Act, 1947.
It was argued on behalf of the appellant that on April 15, 1948 when the notification was issued, the Extra Provincial Jurisdiction Act, 1947 (Act XLVII of 1947) was not applicable to the Shillong Administered Areas as the instrument of accession by which the administration of the State of Mylliem was transferred to the Central Government was accepted by the GovernorGeneral of India on August 17, 1948.
The preamble to the Extra Provincial Jurisdiction Act, 1947 (hereinafter called the Act of 1947) provides: "Whereas by treaty, agreement, grant, usage, sufferance and other lawful means, the Central Government has, and may hereafter acquire, jurisdiction in and in relation to areas outside the Provinces of India; It is hereby enacted as follows : " The expression "extra provincial jurisdiction" has been defined under section 2 of the Act of 1947 as meaning "any jurisdiction which by treaty, agreement, grant, usage, sufferance or other lawful means the Central Government has for the time being in or in relation to any area outside the Provinces".
Section 3 states: "3.
(1) It shall be lawful for the Central Government to exercise extra provincial jurisdiction in such manner as it thinks fit.
(2) The Central Government may delegate any such jurisdiction as aforesaid to any officer or authority in such manner and to such extent as it thinks fit.
" Section 4 provides as follows: "4.
(1) The Central Government may, by notification in the official Gazette, make such orders, as may seem to it expedient for the effective exercise of any extra provincial jurisdiction of the Central Government.
(2) Without prejudice to the generality of the powers conferred by sub section (1 ), any order made under that sub section may provide (a) for determining the law and procedure to be observed, whether by applying with or without modifications all or any of the provisions of any enactment in force in any Province or otherwise; (b) for determining the persons who are to exercise jurisdiction, either generally or in particular 2 Sup.
C1/69 18 266 cases or classes of cases, and the powers to be exercised by them; (c) for determining the courts, judges, magistrates and authorities by whom, and for regulating the manner in which, any jurisdiction auxiliary or incidental to or consequential on the jurisdiction exercised under this Act is to be exercised within any Province; and (d) for regulating the amount, collection and application of fees.
" Section 5 is to the following effect: "Every act and thing done, whether before or after the commencement of this Act, in pursuance of any extra provincial jurisdiction of the Central Government in an area outside the Provinces shall be as valid as if it had been done according to the local law then in force in that area.
" The argument was stressed on behalf of the appellant that the extra provincial jurisdiction could only be exercised by the Central Government if by treaty, agreement, grant, usage, sufferance or other lawful means the Central Government has for the time 'being in or in relation to any area outside.
the provinces exercised such jurisdiction.
It was contended that after the declaration independence on August 15, 1947 the paramountcy lapsed and the State of Mylliem became an independent State and the Central Government could not exercise any extra provincial jurisdiction till the instrument of accession was signed by the GovernorGeneral.
It was pointed out that the notification by which the Act was applied to Shillong Administered Areas was issued after the lapse of paramountcy and before the instrument of accession was signed by the Governor General.
It was therefore argued that the notification dated April 15, 1948 was not validly issued and the provisions of the Act were not operative in the Shillong Administered Areas.
It was said that before the State of Mylliem became an independent State on August 15, 1947 there was no treaty, grant, usage or arrangement whereby the British Crown enjoyed any rights to levy taxes on the sale of goods within the Mylliem State or any right to extend to that area any such Act without the express consent or approval of the ruler of that State.
The opposite view point was put forward on behalf of the respondents.
It was said that before August 15, 1947 the relations of the Crown Representative with Khasi Hills States were conducted through the Governor of Assam.
In practice the administration of the Hill States was in great measure assimilated to that of the Province of Assam partly by the application of the British Indian Laws under the Indian (Foreign Jurisdiction) Order in Council 267 and partly by administrative measures.
It was argued that by virtue of the instrument of accession all previous existing arrangements between Khasi Hills States and the Government of India in the Assam Province were continued and the Central Government could therefore exercise extra provincial jurisdiction by usage.
To put it differently, the argument of the respondents was that though the instrument of accession was accepted by the Governor General on August 17, 1948, it recognised the fact that there was a certain existing arrangement regulating relations between the Government of India and the Chiefs of the Khasi Hills States.
The Central Government therefore exercised extra provincial jurisdiction by agreement or usage and it cannot therefore be said that the notification of the Central Government dated April 15, 1948 was invalid.
When the appeals were originally heard we considered that the material on the record was not sufficient to enable us to determine the disputed question, namely whether the Dominion of India was entitled to exercise extra provincial .jurisdiction over the Shillong Administered Areas on April 15, 1948 which was the material date.
The question at issue is not purely a question of fact but a question relating to a "fact of State" which is peculiarly within the cognizance of the Central Government (For expression "Fact of State" see Halsbury Laws of England, 3rd edn.
Vol. 7, p. 285).
In view of the insufficiency of material we thought it proper to avail ourselves of the procedure indicated by section 6 of the Act of 1947 which enacts: "6.
(1) If in any proceeding, civil or criminal in a Court established in India or by the authority of the Central Government outside India, any question arises as to the existence or extent of any foreign Jurisdiction of the Central Government, the Secretary to the Government of India in the appropriate department shall, on the application of the Court, send to the Court the decision of the Central Government on the question, and ' that decision shall for the purposes of the proceeding be final.
(2) The Court shall send to the said Secretary, in a document under the seal of the Court or signed by a judge of the Court, questions framed so as properly to raise the question, and sufficient answers to those questions shall be returned to the Court by the Secretary and those answers shall on production thereof be conclusive evidence of the matters therein contained.
" By an order of this Court dated September 21, 1967 the following two questions were forwarded to the Union of India under the seal of this Court for submission of their answers: 268 "(1) Whether the Dominion of India exercised extra provincial jurisdiction over the Shillong Administered Area including Bara Bazar, which also included Mawkhar, a part of the erstwhile Mylliem State, on April 15, 1948; (2) Whether the Dominion of India had extra provincial jurisdiction on April 15, 1948 to extend the Assam Sales Tax Act, 1947 (Act 17 of 1947) to the Shillong Administered Area including Bara Bazar under section 4 of Extra Provincial Jurisdiction Act (Act 47 of 1947) .
" In compliance of that order the Union of India have submitted their answers on January 12, 1968 in the following terms: "Ministry of Home Affairs.
Replies to the questions mentioned in the order dated September 21,1967 passed by the Supreme Court of India in Civil AppeaLs Nos. 2403 and 2404/1966.
(1) The British Government in India had by treaty, grant.
usage, sufferance and other means acquired jurisdiction over certain territories of the erstwhile State of Mylliem.
The jurisdiction was exercised under the Indian (Foreign Jurisdiction) Order in Council, 1902 as amended by the Indian (Foreign jurisdiction).
Order in Council, 1937.
Mawkhar was a part of the territories of Mylliem jurisdiction over which had been agreed to be given by the Siem of Mylliem to the British Government.
It was included in those parts of Shillong which came, in course of time, to, be called the Shillong Administered Area.
It has been reported that on actual survey the small area known as Bara Bazar area comes partly under Mawkhar proper and partly under South East Mawk har and Garikhana.
Bara Bazar area was thus a part of the area belonging to the erstwhile Mylliem State in which the British Government in India exercised jurisdiction under the Indian (Foreign jurisdiction) Order in Council.
On the withdrawal of British Rule the jurisdiction over the territories of the erstwhile Mylliem State which had been included in the Shillong Administered Area continued to be exercised with the consent of the Siem and the jurisdiction which was until then exercised in those areas by the British Government in India was assumed by the Dominion of India and it was retained thereafter by virtue of the instrument of accession signed by the Siem of Mylliem 269 and the agreement annexed thereto.
The Dominion of India exercised extra provincial jurisdiction over the Shillong Administered Area including the Barra Bazar which also included Mawkhar a part of the Mylliem State on April 15, 1948.
(2) The jurisdiction exercised by the British Government in India over the Shillong Administered Area was quite extensive.
In exercise of that jurisdiction that Government had extended, with appropriate reservations, a number of Acts Central as well as Provincial to the Shillong Administered Area e.g. the Indian Income Tax Act and the Assam Municipal Act with the consent of the Siem of Mylliem where necessary.
On the withdrawal of British rule the Dominion of India acquired the same jurisdiction over the Shillong Administered Area by virtue of the instrument of accession signed by the Siem of Mylliem and the agreement annexed thereto.
The Dominion of India therefore had on April 15, 1948 extra provincial jurisdiction in terms of the Extra Provincial Jurisdiction Act, 1947 (Act 47 of 1947) to extend the Assam Sales Tax Act, 1947 (Act 17 of 1947) to the Shillong Administered Area including Barra Bazar.
The Assam Sales Tax Act was actually extended to the Shillong Administered Area including Barra Bazar, .after obtaining the consent of the Siem of Mylliem, in the Ministry.
of States Notification No. 186 IB dated the 15th April,1948.
L.P. SINGH, Secretary to the Govt.
of India.
New Delhi, January 12, 1968.
" It is clear from the letter of the Union Government that it was entitled to exercise extra provincial jurisdiction over Shillong Administered Area on April 15, 1948.
The reason is that prior to that date the British Government had exercised that jurisdiction under the Indian (Foreign Jurisdiction) Order in Council, 1902 as amended by the Indian .(Foreign Jurisdiction) Order in Council, 1937.
On the withdrawal of British rule the jurisdiction over the territory of Mylliem State continued to be exercised with the consent of the ruler by the Dominion of India and the jurisdiction was retained thereafter by virtue of the instrument of accession signed by the Siem of Mylliem and the agreement annexed thereto.
It is also manifest that the jurisdiction exercised by the British Government over the Shillong Administered Area was quite exten 270 sive and in exercise of that jurisdiction a number of Acts Central & Provincial were extended to the Shillong Administered Area, for example, the Indian Income Tax Act and the Assam Municipal Act with the consent of the Siem of Mylliem where necessary.
On the withdrawal of the British rule the Dominion of India acquired the same jurisdiction which included the extension of the Act to the Shillong Administered Area.
Under section 6(2) of the Act of 1947 the answers of the Central Government to the questions forwarded by this Court shall be treated as conclusive evidence of the matter therein contained.
We accordingly hold that the argument of the appellant on this aspect of the case should be rejected.
It was then contended on behalf of the appellant that section 30 of the Act after the amendment was not applicable and the Assistant Commissioner of Taxes had no authority to ask the appellant to deposit the amount of tax assessed before hearing the appeal.
Section 30 of the Act, as it originally stood, was to the following effect: "30.
(1) Any dealer objecting to an order of assessment or penalty passed under this Act may, within thirty days from the date of the service of such order, appeal to the prescribed authority, against such assess ment or penalty; Provided that no appeal shall be entertained by the said authority unless he is satisfied that such amount of tax as the appellant may admit to be due from him has been paid; Provided further that the authority before whom the appeal is filed may admit it after the expiration of thirty days, if such authority is satisfied that for reasons beyond the control of the appellant or for any other sufficient cause it could not be filed within time. . . . . . " After the amending Act of 1958 the section reads as follows: "30.
(1) Any dealer objecting to an order of assessment or penalty passed under this Act may, within thirty days from the date of the service of such order, appeal to the prescribed authority, against such assessment or penalty; ' Provided that no appeal shall be entertained by the said authority unless he is satisfied that the amount of tax assessed or the penalty levied, if not otherwise directed by him, has been paid; 271 Provided further that the authority before whom the appeal is filed may admit it after the expiration of thirty days, if such authority is satisfied that for reasons beyond the control of the appellant or for any other sufficient cause it could not be filed within time.
. . . . . . . ." It was contended that the amendment came into force with effect from April 1, 1958 and it cannot be given retrospective effect so as to apply to assessment periods ending on September 30, 1956, March 31, 1957 and September 30, 1957.
We are unable to accept this argument as correct because the assessments for these three periods were completed after the amending Act came into force i.e., after April 1, 1958.
The appeals against the assessments were also filed after the amendment.
It is therefore not correct to say that the amending Act has been given a retrospective effect and the Assistant Commissioner of Taxes was there.fore right in asking the appellant to comply with the provisions of the amended section 30 of the Act before dealing with the appeals.
It was lastly contended on behalf of the appellant that the Sales Tax Authorities were not right in holding that there was no provision under the Act by which security can be accepted in lieu of cash payment.
Reliance was placed upon the phrase "otherwise directed" in the amended section 30 of the Act.
In our opinion, there is no substance in this argument.
The expression "otherwise directed" only means that the appellate authority can ask the assessee to deposit a portion of the amount and not the whole, but the section gives no power to the appellate authority to permit the assessee to.
furnish security in lieu of cash amount of tax.
We accordingly reject the argument of the appellant on this point.
For the reasons expressed we hold that the High Court was right in dismissing the writ petitions and these appeals must be dismissed with costs there will be one set of hearing fees.
V.P.S. Appeals dismissed.

summary/full:
By a notification dated April 15, 1948 .the
Government of India extended the Assam Sales Tax Act, 1947 to the Administered Area in Shillong under section 4 of the Extra Provincial Jurisdiction.
Act, 1947.
The instrument of accession by which the administration of the Indian Princely State, of Mylliem in the Shillong Administered Area was transferred to the Central Government was accepted by the Governor General of India on August 17, 1948.
Under section 30 of the Assam Sales Tax Act, as amended by Act 6 of 1958, a dealer may appeal against an order of assessment or penalty, but the appeal shall not be entertained by the appellate authority unless he was satisfied that the amount of tax assessed or penalty levied, if not otherwise directed by him, had been paid.
The sales 'tax authorities assessed the appellant to sales tax and imposed penalties for Various periods.
Though some of the; assessment periods were before April 1, 1958 when the Amending Act 6 of 1958 came into force, all the orders of assessment and penalty were passed after April 1, 1958.
The appellant did not pay the tax assessed or the penalty but filed petitions along with its appeals praying that it may be allowed to furnish security in lieu of payment of cash on account of its financial condition.
The petitions were rejected and the appeals were consequently dismissed.
Writ petitions flied by the 'appellant in the High Court, to quash the orders of dismissal of the appeals, were also dismissed.
In appeal to this Court, it was contended that; (1) After August 15, 1947 the State of Mylliem became an independent State and since the Central Government could exercise extra provincial jurisdiction under the Extra Provincial Jurisdiction Act, only if the Central Government exercised ' such jurisdiction under a treaty, agreement, or by other lawful means, the Central Government in the present case, could not exercise such jurisdiction till August 17, 1948 when the instrument of accession was acCepted; and therefore, the notification dated April 15, 1948 was not validly issued and hence the Assam sales Tax Act was not operative in the Shillong Administered Area; (2) As the Amending Act of 1958 came into force on April 1, 1958 it could not be given retrospective effect so as to apply to assessment periods anterior to that date; and (3.) The authorities were not right in holding that there was no provision in the Act empowering them to accept security in lieu of cash payment.
262 As the material on the record was not sufficient to enable the Court to determine the question whether the Dominion of India was entitled to exercise extra provincial jurisdiction over the Shillong Administered Area on April 15, 1948 this Court under section 6 of the Extra Provincial Jurisdiction Act, forwarded to the Union Government the questions: (a) whether the Dominion of India exercised such jurisdiction on April 15, 1948, and (b) whether the Dominion of India had such jurisdiction to extend the Assam Sales Tax Act to, the Area After receiving the answers, HELD: (1) The answers submitted by the Union Government showed that prior to April 15, 1948, the British Government had exercised jurisdiction over the Area under the Indian (Foreign Jurisdiction) Order in Council, 1902, as amended by the Order in Council of 1937 that on the withdrawal of British rule the jurisdiction continued to be exercised with the consent of the Siem (ruler) of Mylliem State by the Dominion of India, that the Jurisdiction was retained thereafter by the instrument of accession signed by the Siem, and that the exercise of the jurisdiction by the British Government and the Dominion of India several Acts were extended to the Shillong Administered Area.
Since under section 6(2) of the Extra Provincial Jurisdiction Act the answer of the Central Government is conclusive evidence of the matter therein the Union Government was entitled to exercise such jurisdiction over the Shillong Administered Area on April 15, 1948 and therefore, the Assam Sales Tax Act was properly extended to the Area.
[269 F H, 270 B C] (2) The assessments for periods anterior to April 1, 1958 were completed after the Amending Act came into force and the appeals were also filed thereafter.
Therefore the Amending Act of 1958 was applicable to the appeals before the appellate authority and was not given retrospective effect.
[271 C D] (3) The expression 'otherwise directed ' only means that the appellate authority can ask the assessee to deposit a portion of the amount and not the whole but the section gives no power to the appellate authority to permit the assessed to furnish security in lieu of the cash amount of tax.
[271 D E]


judgement:
tion No. 67 of 1965.
Petition under article 32 of the Constitution of India for enforcement of the fundamental rights.
M.C. Chagla, F.N. Kaka, O.P. Malhotra and J.B. Dadachanji, 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 section 156 read with section 210 of the Act calling upon the .Company to pay on or before March 1, 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 section 163 and notice of demand under section 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 section 163 and the notice under section 156 read with section 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 sections 209 and 210 of the Indian Income tax Act, 1961, no order for payment of advance tax 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 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 of capital gains of the assessee referred to in sub clause (i) of clause (a) of section 209 exceeded the maximum amount not chargeable to income tax 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.
Section 210 provides by sub section
(1) "Where a person has been previously assessed by way of regular 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 machinery for imposition of liability for and determination of the quantum of advance tax 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 others.
He is also liable to be assessed to tax as a representative assessee.
That is expressly so enacted by section 161 (1 ) which provides: "Every representative assessee, as regards the income in respect of which he is a representative assessee, 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, and shall be liable to assessment in his own name in respect of 356 that income; but any such assessment shall be deemed to be made upon him in his representative capacity only, . ." A representative assessee by sub section
(1 ) of section 160 includes amongst others, the agent of a non resident in respect of the income of a non resident specified in section 9 (1 )(i), and also a person who is treated as an agent under section 163.
By sub section
(2) a representative assessee is deemed to be an assessee for the purpose of the Act.
By section 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 assessee is however not obligatory: it is open to the Income tax Officer to make a "direct assessment of the person on whose behalf 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 is, by virtue of section 160.(1) read with section 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 him from the person whom he represents: section 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 of sections 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.
or arising to his principal,.
but he cannot be called upon to pay advance tax even though he is by virtue of section 160(2) deemed an assessee for the purposes of the Act.
Diverse reasons were suggested in support of that argument.
It was said that since under section 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 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 section 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 section 209 when the assessee has been previously assessed to tax.
The Income tax Officer is also enjoined by section 210 to issue a notice to a person who has been 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 section 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 section 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 advance tax.
is not in any manner affected because the previous year ends before or with the financial year.
Where an assessees previous, year is the financial year, his total income may not be determined for the previous year before the commencement of the financial 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 section 210.
The quantum of tax will be determined by section 209 and will be adjusted in the manner provided by section 210(3).
That applies 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 by section 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 respeet 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 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, sections 207 and 208 which impose liability to pay advance tax in a financial year, section 210 which authorise the Income tax :Officer to make a demand for payment of advancetax from a person who is previously assessed, and section 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 chargeable 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 on 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 treated 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 virtue of section 207 read with section 208 the declaration 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 sections 207 .and 208 and its quantum is determined by sections 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 ascertainable when demand is made by the Income tax Officer under section 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 sections 209, 210 and 212.
Every person who has been previously assessed to tax is liable when ordered 359 by the Income tax Officer to pay advance tax, subject to the right to make an estimate under section 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 an 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 article 14 of the Constitution.
The petition therefore fails and is dismissed with costs.
G.C. Petition dismissed.

summary/full:
The Income tax Officer, Companies Circle, Bombay treating the petitioner as an agent of a non resident issued a notice of demand under section 156 read with section 210 of the Indian Income tax Act, 1961.
By this notice the petitioner 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 article 32 of the Constitution challenging the demand.
The contentions.
in support of the petition were: (i) that under sections 209 and 210 of the Indian Income tax Act, 1961 no order for 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 section 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, section 210 which authorises the Income tax Officer to make a demand for payment of advance tax from a person who is previously assessed, and section 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 assessed 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 section 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.
[357 C] of the liability to pay advance tax it is not predicated that the previous year should have come to.
an end before the liability can anse.
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 advance tax is not in any manner 354 affected because the previous year ends before or with the financial year.
There is nothing in the Act under which the liability to pay advance tax of a representative assessee depends 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]


judgement:
ivil Appeal No. 1064 of 1966.
Appeal by special leave from the judgment and order, dated August 4, 1965 of the Kerala High Court in Writ Appeal No. 205 of 1964.
B. Sen and S.P. Nayar, for appellant No. 1.
A.S. Nambiar and Lily Thomas, for the respondent.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from the judgment of the Kerala High Court in which the only point which arises for decision is whether Rule 1713 of the Conduct and Disciplinary Rules hereinafter called the Rules, for railway servants was correctly applied and the dismissal of the respondent, who at the material time, was an Assistant Station Master was rightly set aside for non compliance with that Rule.
The facts lie within a narrow compass.
In July 1963 the respondent, who was working as an Assistant Station Master at Chalakudy railway station was served with a statement containing charges relating to certain matters after an inspection report had been submitted to the authorities concerned.
After the reply of the respondent had been received a departmental enquiry was held and the Enquiring Officer submitted a report finding all the four charges which. had been preferred against the respondent proved.
A show cause notice was then served in September 1963 giving the findings of the Enquiring Officer (Assistant Commercial Superintendent ) and it was stated that it had been tentatively decided by the Chief Commercial Superintendent that the respondent should be dismissed from service.
This notice was served after the Chief Commercial Superintendent had recorded the following order (Exh. R. 8 ): "The employee, in his reply dated 3 8 1963 to this charge sheet, has not accepted the charges contained in the same.
An enquiry, therefore was arranged.
It was held by the Assistant Commercial Superintendent Olavakkot from 22 8 63 to 29 8 1963.
I have seen the enquiry proceedings.
I find that the procedure has been followed correctly; that the accused has been given every reasonable opportunity for his defence and I agree with the findings of the Enquiry Officer 345 that all the charges mentioned in the charge sheet have been established.
Since these are serious charges, it is tentatively decided to impose the penalty of dismissal from service on Shri K. Rajappa Menon, Assistant Station Master/Chalakudi.
He should, therefore, be asked to show cause why he should not be dismissed from service accordingly.
" He was given a week for showing cause why the proposed penalty should not be inflicted on him.
After the explanation of the respondent had been received his dismissal was ordered by the Chief Commercial Superintendent.
The respondent filed a petition under article 226 of the Constitution in the High Court and a number of points were raised before the learned Single Judge.
The only point which prevailed with him Was that the Chief.
Commercial Superintendent had not recorded an order as required by Rule 1713.
He examined the other contention raised on behalf of the respondent before him that at the stage of the second show cause notice the Chief Commercial Superintendent had finally made up his mind which he could not or ought not to have done until the reply or the explanation of the respondent had been received and considered by him.
In view of a bench decision of the Kerala High Court he did not rest his decision on the second point but decided in favour of the respondent on the first point holding that the Chief Commercial Superintendent had not given findings on each of the charges.
In his opinion the rule contemplated that the evidence which had been adduced at the enquiry in relation to each charges should be examined and considered by the punishing authority and he should give his own assessment and finding relating to each.
individual charge which was not done in the present case.
The division :Bench on appeal by the present appellant affirmed the judgment of the learned Single Judge.
Now Rule 1713 provides that if the disciplinary authority is not the Enquiring Authority it shall consider the record of the enquiry and.
record its findings on each charge.
The argument which prevailed with the High COurt was that the order embodied in Exh. 8 did not comply with the aforesaid rule because findings relating to each charge were not given after a proper discussion .and analysis of .the: evidence produced at the departmental enquiry.
In other words, the Chief CommerCial Superintendent .was bound.
to pass a detailed order expressing his views about each charge and that a general agreement with the findings of the Enquiry Officer did not satisfy the requirements of Rule 1713.
We are altogether unable to agree with the view expressed by the High Court.
Rule 1713 does not lay down any particular sup.
cI/69 5 346 form or manner in which the disciplinary authority should record its findings on each charge.
All that the Rule requires is that the record of the enquiry should be considered and the disciplinary authority should proceed to give its findings on each charge.
This does not and cannot mean that it is obligatory on the disciplinary authority to discuss the evidence and the facts and circumstances established at the departmental enquiry in detail and write as if it were an order or a judgment of a judicial tribunal.
The rule certainly requires the disciplinary authority to give consideration to the record of the proceedings which, as expressly stated in Exh.
R. 8, was done by the Chief Commercial Superintendent.
When he agreed with the findings of the Enquiry that all the charges mentioned in the charge sheet had been established it meant that he was affirming the findings on each charge and that would certainly fulfil the requirement of the Rule.
The Rule after all has to be read not in a pedantic manner ,but in a practical and reasonable way and so read it is difficult escape from the conclusion that the Chief Commercial Superintendent had substantially complied with the requirements of the Rule.
The interference by the High Court, therefore, on the ground that there had been non compliance with Rule 17 13 was not justified.
Learned counsel for the respondent has sought to raise the second point which the High Court had declined to decide, namely, that the disciplinary authority was not entitled to have finally made up its mind before the explanation to the second show cause notice had been received by it and at a stage prior to the issuance of the notice.
Such a contention is wholly untenable in view of the decisions of this Court.
It has been made quite clear in Khem Chand vs The Union of India & Ors.(1) that the procedure article 311 (2) of the Constitution of affording a reasonable opportunity includes the giving of two notices, one at the enquiry stage and the other when the competent authority as a result of the enquiry tentatively determines to inflict a particular punishment.
It is quite obvious that unless the disciplinary or the competent authority arrives at some tentative decision it will not be in a position to determine what particular punishment to inflict and a Second show cause notice cannot be issued without such a tentative determination.
The appeal is consequently allowed and the judgment of the High Court is hereby set aside.
The petition filed by the respondent under article 226 shall stand dismissed.
No order as to costs.
Y.P. Appeal allowed.

summary/full:
After the reply of the respondent a railway employee in respect of certain charges p.referred against him was received, a departmental enquiry was held.
The Enquiring Officer found all the charges proved.
A show cause notice, was then served stating that it had been tentatively decided by the Chief Commercial Superintendent that the respondent should be dismissed from service.
This notice was served after the ' Chief Commercial Superintendent had recorded an order stating that he had seen the enquiry proceedings, that the procedure had been correctly followed, and that he agreed with the findings of the Enquiring Officer.
The respondent submitted his explanation; thereafter his dismissal was ordered.
The respondent filed a writ petition in the High Court.
The single Judge allowed the petition holding that the Chief Commercial Superintendent was bound to> pass a detailed order expressing his views about each of the charges and that a general agreement with the findings of the Enquiry Officer did not satisfy the requirements of r. 1713 of the Conduct and Disciplinary Rules.
This decision was affirmed by the Division Bench.
In 'appeal, this COurt, HELD: The: appeal must be allowed.
(i) Rule 1713 does not lay down any particular form or manner in which the disciplinary authority should record its findings on each charge.
All that the Rule requires is that the record of the enquiry should be considered 'and disciplinary authority should proceed ' to give its findings on each charges.
This does not and cannot mean that it is obligatory on the disciplinary authority to discuss the evidence and the facts and circumstances established at the departmental enquiry in detail and write as if it were an order or a judgment of a judicial tribunal.
The rule certainly requires the disciplinary authority to give consideration to the record of the proceedings which was done by the Chief Commercial Superintendent.
When he agreed with, the findings of the Enquiry Officer that all the charges mentioned in the charge sheet had been established it meant that he was affirming the findings on each charge and that would ' certainly fulfil the requirement of the Rule.
[345 H 346 D] (ii) There was no force in the respondent 's contention that the disciplinary authority was not entitled to have finally made up its mind before the explanation to the second show cause notice had been received by it and at a stage prior to the issuance of the notice.
The procedure which is. to be followed under article 311(2) of the Constitution of 'affording a reasonable opportunity includes the.
giving of two notices, One at the enquiry stage and the other when the competent authority as a result of the enquiry tentatively determines to inflict a particular punishment.
344 It is quite obvious that unless the disciplinary or the competent 'authority arrives at some tentative decision it will not be in a position to determine what particular punishment to inflict and a second show cause notice cannot be issued without such a tentative determination.
[346 E] Khem Chand vs Union of India & Ors., ; , followed.


judgement:
, No. 14 of 1968.
Petition under article 32 of the Constitution of India for enforcement of the fundamental rights.
M.C. Chagla, S.K. Mehta, K.L. Mehta and S.K. Khanna, for the petitioners.
C.K. Daphtary, Attorney General and D.P. Singh, for the respondents.
The Judgment of the Court was delivered by Bachawat,J.
The petitioner company, Mohan Meakin Brewenes Ltd., manufactures and soils Indian made foreign liquor.
Its distilleries are situated at Solan in Himachal Pradesh and at Lucknow and Mohan Nagar in Uttar Pradesh.
It has depots for sale of its products at Patna and Ranchi in the State of Bihar.
Before October 13, 1967 it imported foreign liquor into the State of Bihar from Solan, Lucknow and Mohan Nagar for purposes of sale at its Patna and Ranchi depots on payment of duty at the then current rate of Rs. 14.40 L.P. litres.
Duty on the liquor from Solan was paid upon or before importation by making deposits in the State Bank of India at Patna and Ranchi.
Duty on the liquor from Lucknow and Mohan Nagar was paid upon importation by making deposits with the Uttar Pradesh Government. ' By a notification, dated October 13, 1967 duty on foreign liquor was enhanced from Rs. 14.40 to Rs. 26.20 per L.P. litres with effect from November 1, 1967.
By an order, dated January 3, 1968 the Superintendent of Excise, Patna, directed the Company to pay by January 31, 1968 the difference in duty on the opening balance of India made foreign liquor in its stock on November 1, 1967.
In this writ petition under article 32 of the Constitution the Company challenges the legality of the levy.
Duty on foreign liquor imported into the State of "Bihar is chargeable under section 27(1)(a) of the Bihar and Orissa Excise Act, 1915 (Bihar and Orissa Act H of 1915).
Subject to any rules made under section 90 clause (12), the duty may be levied under section 28 (a) in two ways.
The first method as indicated in section 28 (a) (i) is by payment upon or before importation either in the State of Bihar or in the State or territory from which the article is brought.
This method is followed when the liquor is not imported under bond.
The second method as indicated in section 28 (a)(ii) is by payment upon issue for sale from a warehouse established, authorized or continued under the Act.
In view of the first pro 459 viso to section 28 the payment is made at the rate of duty in force on the date of issue of the article from the warehouse.
This method is followed when the liquor is imported under bond.
The form the bond at page 215 of the Bihar and Orissa Excise Manual, Vol.
II, Part I, issued in 1957 shows that foreign liquor imported under bond is kept without payment of duty in a warehouse established with the approval of the Excise Commssioner under section 15.
In view of section 17 no article can be removed from the warehouse unless duty has been paid or a bond has been executed for the payment thereof.
In the present case, the foreign liquor was imported before November 1, 1967 on payment of duty at the current rate in the manner indicated ins.
28(a)(i).
Duty on imported foreign liquor was enhanced with effect from November 1, 1967.
Sections 27 and 28 do not authorize the levy of the enhanced duty on the liquor imported before November 1, 1967 but lying with the importer on that date.
Section 28, however, is subject to any rules that may be made by the Board of Revenue, Bihar, under section 90 clause (12).
The State of Bihar seeks to justify the levy of the enhanced duty on the stock of imported foreign liquor lying with the petitioner on November 1, 1967 under the proviso to Rule 147 ,framed by the Board of Revenue.
That Rule is as follows : "147.
The duty imposed on (i) foreign liquor and country spirit (a) imported under bond, or (b) manufactured in a distillery, and stored in a distillery or excise warehouse; (ii) Ganja and Bhang (a) imported under bond, or (b) stored in 'an excise warehouse, shall be paid before removal from the distillery or excise warehouse unless a bond has been executed for such payment.
Provided that in case of any revision in the rate of duty on an excisable article, the difference of duty shall be realised from or credited to the licensee, to whom such article has been issued on payment of duty prior to such revision, according as the revised rate of duty is higher or lower than the old rate and the 'calculation of the difference of duty shall be made on the quantity of such article that may remain in possession of such licensee when the revised rate of duty comes into force.
" 460 The main part of Rule 147 applies to foreign liquor imported under bond which, as already stated, is kept in an excise warehouse established under.
the Act.
It provides that ' duty imposed on foreign liquor imported under bond shall be paid before removal from the excise warehouse unless a bond has been executed for such payment.
Under the proviso to Rule 147 in case of any revision of the rate, of duty on an excisable article, the license to whom the article has been issued on payment of duty prior to such revision is liable to pay the difference of duty on the quantity of such article that may remain in his possession when the revised rate of duty comes into force.
The proviso must be construed with reference to the main part of the Rule.
A close scrutiny of the Rule reveals that the main part and the proviso deal with the same subject matter.
The expression "an excisable article" in the proviso means foreign liquor imported under bond and other articles on which duty is payable before removal from the excise warehouse or distillery where they are kept.
It is for this reason that under the proviso the difference of duty is realised from or credited to the licensee to whom the article has been issued from the excise warehouse or distillery on payment of duty prior to such revision.
The proviso does not :apply to all imported foreign liquor.
It applies only to foreign liquor imported under bond, that is to say, foreign liquor on which duty has been levied under section 28(a)(ii) by payment upon issue for sale from an excise warehouse.
It does not apply w foreign liquor not imported under bond upon which duty has been levied under section 28 (a) (i).
The petitioner 's foreign liquor was not imported under bond.
The petitioner is not, therefore, liable to pay under the proviso to Rule 147 the difference of duty in respect of its stock of foreign liquor on November 1, 1947.
The demand for payment of the difference of duty in respect of this stock is not authorised by the Act or the proviso to Rule 147.
The petitioner also challenged the constitutionality of section 27 and the rites of the proviso to Rule 147.
In view of our conclusions aforesaid, it is not necessary to decide these questions.
In the result, there will be an order in terms of (a) (iii) and (b) of the petition.
The order of the Superintendent of Excise, Bihar, dated January 3, 1968, copy whereof is Annexure B,to the petition is quashed and set aside and the respondents are prohibited from enforcing the aforesaid order.
The respondents shall pay to the petitioner the costs of the petition.
G.C. Petition allowed.

summary/full:
The petitioner was a company manufacturing Indian made foreign liquor in Himachal Pradesh and Uttar Pradesh.
It had depots for sale of its products at Patna and Ranchi in the State of Bihar.
Before October 13, 1967 it .imported foreign liquor into the State of Bihar from Himachal Pradesh and Uttar Pradesh for purposes of sale at its Patna and Ranchi depots on payment of duty at the then current rate.
Duty on liquor from Himachal Pradesh was paid upon or before importation by making deposits in the State Bank of India at Patna and Ranchi.
Duty on liquor from Uttar Pradesh was paid on importation by making deposits with the government of that State.
By notification dated October 13, 1967 duty on foreign liquor was enhanced with.
effect from November 1, 1967.
The Superintendent of Excise, Patna directed the company to pay the, difference in duty on the opening balance of Indian made foreign liquor in its stock on November 1, 1967.
The company challenged the demand in a writ petition under article 32 of the Constitution.
Apart from sections 27 and 28 of the Act the respondent State relied on the proviso to r. 147 of the Rules made under section 90 of the Act.
HELD i (i) The foreign liquor was imported before November 1, 1967 on payment of duty at the current rate in the manner indicated in section 28(a)(i).
Duty on imported foreign liquor was enhanced with effect from November 1, 1967.
Sections 27 and 28 did not authorize the levy of the enhanced duty on the liquor imported before November 1, 1967 but lying with the importer on that date.
(ii) A close scrutiny of r. 147 reveals that the main part and the proviso deal with the same subject matter.
The expression "an excisable article" in the proviso means foreign liquor imported under .bond and other articles on which duty is payable.
before removal from the excise warehouse or distillery where they are kept.
It is for this reason that under the proviso the difference of duty is realised from or credited to the licensee to whom the article has been issued from the excise warehouse or distillery on payment of duty prior to such revision.
The proviso does not apply to all imported foreign liquor.
It applies only to foreign liquor imported under bond, that is to say, foreign liquor on which duty has been levied under section 28(a)(ii) by payment upon issue, for sale from an excise warehouse.
It does not apply to foreign liquor not imported under bond upon which duty has been levied under section 28(a)(i).
The petitioner 's foreign liquor was not imported under bond.
The petitioner was therefore not liable to pay under the proviso 3 Sup.
C.I./69 12 458 to r. 147 the difference of duty in respect of its stock of foreign liquor on November 1, 1967.
The demand for payment of the difference of duty in respect of this stock was not authorized by the Act or the proviso to r. 147.
[460 C F]