Kethmal Parekh vs Tax Recovery Officer And Anr. on 15 November, 1971
21. Mr. Dasaratharama Reddy has relied upon the decision of a Full Bench of the Mysore High Court in Raja Pid Naik v. Agricultural Income-tax Officer-cum-Commercial Tax Officer, [1968] 69 I.T.R. 401 (Mys.) [F.B.]. That was a case under the Hyderabad Agricultural Income-tax Act. The provisions of thafstatute which were construed and applied by the Full Bench of the Mysore High
court are in pan materia with the provisions of the Income-tax Act, which are pertinent in the present context. Section 34 of the statute considered by the Mysore High Court enabled the Agricultural Income-tax Officer to forward to the Taluqdar a certificate in cases in which the assessee was in default. The wording of Section 34 is identical in all material respects with the language of Section 222. On receipt of the certificate it was competent for the Taluqdar to recover the amounts specified therein as a public demand. The assessee died during the pendency of the recovery proceedings. But, before his death a notice of demand was served on him. The question was whether the proceedings could be continued against the legal representative and whether the successor-in-interest was an "assessee in default ", within the meaning of Section 34. The successor-in-interest was not served with a notice of demand. The Full Bench of the Mysore High Court held that the proceedings could not be continued against the legal representative although Section 22 of the Act fastened the liability of the deceased assessee on the legal representative. It was observed that a certificate forwarded under Section 34(3) authorises recovery of arrears only from the assessee in default named in the certificate. The result is when the assessee dies, the efficacy of the certificate comes to an end and the recovery proceedings cannot be continued against the successor-in-interest on the strength of the certificate. The only method by which the successor could be proceeded against was on the basis of a fresh certificate naming him as the defaulter. Learned counsel calls in aid the ratio of the decision that the proceedings for recovery of the tax are permissible only against the assessee named in the certificate. It was on the application of this principle that the Full Bench of the Mysore High Court held that the certificate which served as the foundation for the action against the deceased person was no longer operative after the death of the defaulter named in the certificate.