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PETITIONER: COMMISSIONER OF INCOME-TAX, BOMBAY & ANOTHER

       Vs.

RESPONDENT: ISHWARLAL BHAGWANDAS AND OTHERS

DATE OF JUDGMENT: 07/05/1965

BENCH: SHAH, J.C. BENCH: SHAH, J.C. GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. MUDHOLKAR, J.R. SIKRI, S.M.

CITATION:  1965 AIR 1818            1966 SCR  (1) 190  CITATOR INFO :  R          1966 SC1445  (9)  RF         1966 SC1888  (4)  F          1968 SC1227  (3)  RF         1986 SC1272  (100)

ACT: Constitution   of   India,   1950,   Art.   133(1)(c)-"Civil Proceeding",  Meaning of. Income-tax Act (11 of 1922), s. 18A(6), proviso-Scope of.

HEADNOTE: The respondents filed under s. 18A(2) of the Income-tax Act, 1922,  estimates  of their income for  the  assessment  year 1948,  1948-49  and made advance payments of tax.   On  31st MarCh 1953 the regular assessment was made, but the  Income- tax Officer omitted to charge penal interest as required  by s. 18A(6) even though the tax paid was less than 80% of  the tax  determined.  The error was discovered during audit  and the  Income-tax Officer rectified the error after notice  in 1956,  under  s. 35 of the Act.  When the  notice  demanding interest  was issued, the respondents challenged  the  order before  the Commissioner on the ground that the omission  to charge  pepal  interest could not be  considered  a  mistake apparent  from  the  record, in view of the  proviso  to  s. 18A(6),  which was introduced on 24th May 1953 but was  made retrospective  from  1st  April 1952, giving  power  to  the Income-tax  Officer to reduce or waive the interest  payable by  the  assessee.   The Commissioner  did  not  accept  the contention.  The respondents then moved the High Court under Art. 226 of the Constitution and the High Court quashed  the notice of demand. In his appeal to this Court, the Commissioner contended that :  (i) no retrospective operation was effectively  given  to the  proviso,  because the rules, which alone  could  render that  discretion  operative, were framed  only  in  December 1953, and (ii) there was nothing to show that the Income-tax Officer  had  purported to exercise his discretion  when  he passed  the  order of assessment but did  not  impose  penal interest   under   s.  18A(6).   Me  respondent   raised   a

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preliminary  objection  that  the  appeal  was   incompetent because  (a) the High Court had no power under Art.  133  to certify the appeal as a proceeding under Art. 226 was not  a civil  proceeding  within the meaning of Art. 133,  and  (b) even if some proceedings under Art. 226 could be treated  as civil proceeding, when relief is sought against the levy  of a  tax, the proceeding could not be so treated as  it  comes under  "  other  proceeding"  as  contrasted  with  a  civil proceeding, referred to in Art. 132(1). HELD  :  (i)  (by  Full Court) :  There  is  no  ground  for restricting the expression "civil proceeding" only to  those proceedings  which arise out of civil suits  or  proceedings which  are tried as civil suits, nor is there  any  rational basis for excluding from its purview proceedings  instituted and tried in the High Court in exercise of its  jurisdiction under  Art.  226, where the aggrieved  party  seeks  -relief against   infringement  of  civil  rights   by   authorities purporting  to act in exercise of the powers conferred  upon them by revenue statutes. [200 B-D] (Per P. B. Gajendragadkar, C. J., K. N. Wanchoo, J. C.  Shah and S.    M. Sikri, JJ) : The expression "civil  proceeding" covers all proceedings in     which  a  party  asserts   the existence of a civil right conferred by the civil law or  by statute, and claims relief for breach thereof.  It is one in which  a person seeks to enforce by appropriate  relief  the alleged in- 191 fringement of his civil rights against another person or the State and which, if the claim is proved, would result in the declaration  express  or implied of the  right  claimed  and -relief  such  as payment of  debt,  damages,  compensation, delivery  of  specific  property,  enforcement  of  personal rights,  determination of status, etc.  By a petition for  a writ  under Art. 226, extraordinary jurisdiction,  which  is undoubtedly  special  and  exclusive of the  High  Court  is invoked.   But on that account the nature of the  proceeding in which it is exercised is not altered.  The character of a proceeding  depends,  not upon the nature  of  the  Tribunal which  is invested with authority to grant -relief but  upon the nature of the right violated and the appropriate  relief which may be claimed. [196B, G, H; 197H] There  is no warrant for the view that from the category  of civil  proceedings, it was intended to  exclude  proceedings relating  to  or which seek relief  against  enforcement  of taxation  laws of the State.  If a person is called upon  to pay  tax which the State is not competent to levy, or  which is  not  imposed in accordance with the  law  which  permits imposition  of  the  tax, or in  the  levy,  assessment  and collection of which rights of the tax-payer are infringed in a  manner  not  warranted by the statute,  a  proceeding  to obtain relief, whether it is from the tribunal set up by the taxing statute or from the civil court, would be regarded as a  civil proceeding.  The words "other proceeding"  in  Art. 132(1) refer only to proceedings which may be neither  civil nor criminal, such as, proceedings for contempt of court and for   exercise   of   disciplinary   jurisdiction    against professionals. it is not because a reference under s. 256 of the  Income-tax  Act  to  the High  Court  is  not  a  civil proceeding  that  a certificate under Art. 133  may  not  be granted, necessitating the enactment of s. 261 for  granting such  a certificate, but, because of the advisory  character of  the jurisdiction exercised by the High Court,  the  High Court’s  opinion is not a judgement, decree or order  within the meaning of Art. 133. [196 D-G; 197E] (ii) (By Full Court) : It is true that the proviso  operates

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only  in respect of cases and under circumstances as may  be prescribed  by  the  rules, but as soon as  the  rules  were framed  which effectuate the purpose for which  the  proviso was  enacted,  the proviso and the  rules  became  effective retrospectively from 1st April 1952. [202E] T.   Cajee  v.  U.  Jormanik  Slem,  [1961]  1  S.C.R.  750, distinguished. M.   K.   Venkatachalam   I.T.0.  v.   Bombay   Dyeing   and Manufacturing Co.  Ltd. [1959] S.C.R. 703, applied. (iii)     (Per P. B. Gajendragadkar, C.J., K. N. Wanchoo, J. C. Shah and S. M. Sikri, JJ.) : The High Court was right  in setting  aside the order passed by the Commissioner  without considering  the proviso (5) to s. 18A(6) which was  clearly applicable to the case of the, assesse. [205E] The Income-tax Officer, on the language of s. 18A(6) on  the date  of  making the assessment order, was bound  to  impose liability  for payment of penal interest.  But by reason  of the  retrospective operation given to the proviso  added  in 1953,   the  Officer  must  be  deemed  to  have   possessed discretion  to  reduce  or waive  interest  payable  by  the assessee, on the date on which he made the assessment order. The order which did not take note of the law deemed to be in force  must be regarded as defective; and the fact that  the offered could not in making the assessment have adjusted his approach  to  the problem before him in the light  of  those provisions is irrelevant in considering the legality of  his order. [202A, C; 205 B-C] Per Mudholkar, J. (dissenting) : Even though the proviso and the  rule must be deemed to have been in force on 1st  April 1952, the omi- 192 ssion  to  charge penal interest at the time of  making  the regular assessment could not be ascribed to the exercise  of discretion by the income-tax Officer.  In fact, when he made the assessment, he had no discretion and was bound by law to charge  penal  interest.   His omission to  do  so  must  be ascribed to an oversight and not to deliberateness.  He  was competent  to  rectify the mistake under s. 35 and  when  he exercised  his power under the section he  himself  accepted the  position that what he did earlier was through  mistake. [209 C-E, G]

JUDGMENT: CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos. 1003  and 1004 of 1963. Appeals from the judgment and orders dated November 13, 1958 of  the Bombay High Court in Miscellaneous Petition No.  217 and 218 of 1958. C.   K. Daphtary, Attorney-General, R. Ganapathy Iyer and B.   R.  G.  K.  Achar,  for the  appellants  (in  both  the appeals). A.   V.  Viswanatha Sastri, C. A. Ramachandran, J. B.  Dada- chanji, 0. C. Mathur and Ravinder Narain, for the respondent (in both the appeals). The  Judgment  of Gajendragadkar, C.J., Wanchoo,  Shah,  and Sikri, JJ. was delivered by Shah, J. Mudholkar, J. delivered a dissenting Opinion. due notice to the assessee". Shah,  J.  The  1st Income-tax Officer,  C-11  Ward,  Bombay served  a notice tinder s. 18-A(1) of the Indian  Income-tax Act,   1922  calling  upon  Bhagwandas   Kevaldas-who   will hereinafter  be called ’the assessee’-to pay in  four  equal installments Rs. 25,973/5 as advance-tax for the  assessment

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year  1948-49.  On September 17, 1947 the assessee filed  an estimate  of  his  income under s. 18-A(2) and  of  the  tax payable  by him, and on January 10, 1948 he filed a  revised estimate.   An order under S. 23-B of the Act  provisionally assessing the income was made by the Income-tax Officer  and pursuant  thereto on August 23, 1950 the assessee  paid  the tax  so assessed.  Regular assessment of the income  of  the assessee  was  made  on March 31,  1953  by  the  Income-tax Officer, and it was found that the tax paid on the basis  of the  estimate of the assessee was less than eighty per  cent of the tax determined as a result of the regular assessment. But the Income-tax Officer made no charge for interest under sub-s. (6) of S. 18-A of the Income-tax Act. The  departmental  auditor raised an objection  in  auditing accounts  of C-11 Ward that a mistake was committed  by  the Income-tax  Officer in failing to charge interest in  making the order of assessment against the assessee.  On  September 21,  1956  the Income-tax Officer served a notice  upon  the assessee requiring him 193 to show cause why the mistake in not levying interest be not rectified  and why he should not be directed to  pay  "penal interest’ under s. 18-A(6).  On October 4, 1956 the  Income- tax Officer recorded the following order :               "During  the internal checking of  C-11  Ward,               the  Auditor has pointed out a mistake in  not               charging penal interest under s. 18-A(6).   As               this mistake is apparent from record the  same               is  rectified  under s. 35  after  giving  due               notice to the assessee", and  served a notice of demand calling upon the assessee  to pay  Rs. 14,929/10 as interest due under s. 18-A(6) for  the period January 1, 1948 to July 22, 1950. In exercise of his powers under s. 33-A, by order dated Feb- ruary 1, 1958, the Commissioner of Income-tax confirmed  the order  of  the Income-tax Officer  rectifying  the  original order of assessment and imposing liability to pay  interest, subject to the modification that interest be paid only  till June 13, 1950. The  assessee  then moved the High Court  of  Judicature  at Bombay by a petition under Art. 226 of the Constitution  for issue of a writ certiorari summoning the record of the  case and for an order quashing or setting aside the order  passed under  s. 33-A(2) by the Commissioner of Income-tax and  the order  passed by the Income-tax Officer under s. 35 and  the notice of demand pursuant to that order.  The High Court  of Bombay  following  its  earlier  judgment  in  the  case  of Shantilal  Ravji v. M. C. Nair, IV Income-tax  Officer,  ’G’ Ward, Bombay and Another(1) directed that the orders  passed by the Income-tax Officer and by the Commissioner of Income- tax be quashed.  Against the order passed by the High  Court the  Commissioner of Income-tax and the  Income-tax  Officer have,  with certificate granted by the High Court,  appealed to this Court. At  the  hearing  of this appeal counsel  for  the  assessee raised  an objection in liming that the appeal filed by  the Commissioner  and  the Income-tax Officer  was  incompetent. because  the High Court had no power under Art. 133  of  the Constitution  to certify a proposed appeal against an  order in  a proceeding commenced by a petition for the issue of  a writ under Art. 226 of the Constitution.  It was urged  that the  proceeding  before  the High Court was not  "  a  civil proceeding" within the meaning of Art. 133.  Article 133  of the  Constitution, insofar as it is material, by  the  first clause provides

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(1)  (1958) 34 I.T.R. 439. 194               "An appeal shall lie to the Supreme Court from               any judgment, decree or final order in a civil               proceeding of a High Court in the territory of               India if the High Court certifies-               (a)   that the amount or value of the subject-               matter  of the dispute in the court  of  first               instance  and still in dispute on  appeal  was               and   is   not  less  than   twenty   thousand               rupees***; or               (b)   that the judgment, decree or final order               involves directly or indirectly some claim  or               question  respecting  property  of  the   like               amount or value; or               (c)   that the case is a fit one for appeal to               the Supreme Court; The power to issue a certificate under Art. 133 may be exer- cised  only in respect of a judgment, decree or final  order of a High Court in a civil proceeding, and the order  passed by  the  High Court disposing of the petition filed  by  the assessee  for  the  issue  of a writ under  Art.  226  is  a judgment.  But Mr. A. V. Vishwanath Sastri for the  assessee contended  in the first instance that the expression  "civil proceeding"  -in  Art. 133 only means a  proceeding  in  the nature of or triable as a civil suit and a petition for  the issue   of  a  high  prerogative  writ  not  being  such   a proceeding,  against the order passed by the High  Court  no appeal  lay to this Court with certificate under  Art.  133. In  the  alternative,  counsel  contended  that  even  if  a proceeding  for  the issue of a writ under Art. 226  of  the Constitution  may  in certain cases be treated  as  a  civil proceeding, it cannot be so treated when the party aggrieved seeks  relief against the levy of tax or revenue claimed  to be due to the State. This  Court is invested by the Constitution  with  appellate jurisdiction of great amplitude exercisable over all  courts and  tribunals in India.  The jurisdiction may be  exercised in respect of any judgment, decree, determination,  sentence or  order  in  any cause or matter passed by  any  court  or tribunal  other than a judgment, determination, sentence  or order made or passed by any court or tribunal under any  law relating  to the Armed Forces: Art. 136.  Exercise  of  this power  depends  solely  upon the discretion  of  the  Court. Appeals lie to this Court also from orders passed in certain classes  of  cases when certified by the  High  Courts.   An appeal  lies from the judgment, decree or final order  of  a High Court in a civil, criminal or other proceeding, if the 195 High  Court certifies that the case involves  a  substantial question of law as to the interpretation of the Constitution :  Art.  132(1).   Am appeal also lies  from  any  judgment, decree or final order in a civil proceeding of a High  Court if  the  High Court certifies that the  case  satisfies  the conditions  in cls. (a), (b) or (c) of Art. 133(1), or  from any  judgment  or  final order or  sentence  in  a  criminal proceeding  of  a High Court, if the case falls  within  the description  of cls. (a) & (b) of Art. 134, or if  the  High Court  certifies that the case is a fit one for appeal.   It is  clear that under Art. 136 against the  adjudications  of all  courts and tribunals (subject to the exception  already noticed)  whatever  be  the  character  of  the  proceeding, appeals  lie  with  leave to this  Court.   An  appeal  lies against  the  adjudication of a High Court as  a  matter  of right,   whatever  the  nature  of  the   proceeding,   with

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certificate  that it involves a substantial question of  law as  to the interpretation of the Constitution, and in  civil proceeding  with certificate of the nature set out  in  cls. (a), (b) or (c) of Art.. 133, and in criminal proceedings in conditions   mentioned  in  cls.  (a)  and  (b)   and   with certificate under cl. (c) of Art. 134. Counsel for the assessee said that proceedings instituted in the High Court in exercise of its jurisdiction--original  or appellate  may  be  broadly classified  as  (i)  proceedings civil,  (ii)  proceedings criminal,  and  (iii)  proceedings revenue,  and where the case does not involve a  substantial question as to the interpretation of the Constitution,  from an  order  passed in a proceeding civil, an appeal  lies  to this  Court with certificate granted under Art. 133  of  the Constitution,  and from a judgment, final order or  sentence in  a  criminal proceeding an appeal lies  with  certificate (,ranted  under  Art. 134 of the Constitution, but  from  an order  passed in a proceeding relating to revenue the  right of  appeal may be exercised only with leave of  this  Court. Counsel  seeks support for this argument primarily from  the phraseology  used  in Art. 132 of  the  Constitution.   That Article, by its first clause, provide-,               "An appeal shall lie to the Supreme Court from               any judgment, decree or final order of a  High               Court in the territory of India, whether in  a               civil,  criminal or other proceeding,  if  the               High Court certifies that the case involves  a               substantial   question  of  law  as   to   the               interpretation of this Constitution." Counsel relies upon the classification of proceeding made in Art.  132(1) and seeks to contrast it with  the  phraseology used  in  Arts.  133(1)  &  134(1).   He  says  that  "other proceeding" in Art. 132(1) 196 falls  within the residuary  class  of   proceedings   other than  civil  or criminal, and such a proceeding  includes  a revenue  proceeding.  The expression "civil  proceeding"  is not defined in the Constitution, nor in the General  Clauses Act.  The expression in our judgment covers all  proceedings in  which  a party asserts the existence of  a  civil  right conferred by the civil law or by statute, and claims  relief for breach thereof.  A criminal proceeding on the other hand is  ordinarily one in which if carried to its conclusion  it may  result  in the imposition of sentences such  as  death, imprisonment,  fine  or  forfeiture  of  property.  It  also includes proceedings in which in the larger interest of  the State,  orders  to prevent apprehended breach of the  peace, orders  to  bind  down  persons who  are  a  danger  to  the maintenance   of  peace  and  order,  or  orders  aimed   at preventing  vagrancy are contemplated to be passed. But  the whole  area of proceedings, which reach the High  Courts  is not  exhausted by classifying the proceedings as  civil  and criminal.   There  are  certain  proceedings  which  may  be regarded  as  neither  civil nor  criminal.   For  instance, proceeding  for  contempt  of  Court  and  for  exercise  of disciplinary   jurisdiction   against   lawyer   or    other professionals,  such  as chartered accountants may not  fall within   the  classification  of  proceedings,    civil   or criminal. But there is no warrant for the view that from the category  of civil proceedings, it was intended  to  exclude proceedings  relating  to  or  which  seek  relief   against enforcement  of  taxation laws of the  State.   The  primary object  of a taxation statute is to collect revenue for  the governance  of the State or for providing specific  services and  such laws directly affect the civil rights of the  tax-

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payer.   If  a person is called upon to pay  tax  which  the State  is not competent to levy, or which is not imposed  in accordance with the law which permits imposition of the tax, or in the levy, assessment and collection of which rights of the tax-payer are infringed in a manner not warranted by the statute,  a proceeding to obtain relief whether it  is  from the tribunal set up by the taxing statute, or from the civil court  would  be  regarded  as  a  civil  proceeding.    The character  of the proceeding, in our judgment,  depends  not upon  the  nature  of the tribunal which  is  invested  with authority  to grant relief but upon the nature of the  right violated and the appropriate relief which may be claimed.  A civil proceeding is therefore one in which a person seeks to enforce  by appropriate relief the alleged  infringement  of his  civil  rights against another person or the State,  and which if the claim is proved would result in the declaration express  or implied of the right claimed and relief such  as payment of debt, damages, com- 197 pensation,  delivery  of specific property,  enforcement  of personal rights, determination of status etc. There is therefore under the Constitution a right of  appeal to, this Court with special leave from the adjudications  of all courts and tribunals (except tribunals constituted by or under  laws relating to Armed Forces).  An appeal also  lies to this Court against all adjudications by a High Court from judgments,   decrees  and  orders  in  cases  in   which   a substantial  question  as  to  the  interpretation  of   the Constitution  is  involved,  whatever  the  nature  of   the proceeding.   Appeals  from criminal proceedings  lie  as  a matter of right in cases falling within cls. (a) and (b)  of Art. 134, and in cases certified as fit for appeal under cl. (c)  of Art. 134, and from civil proceedings of  the  nature certified by the High Court under Art. 133(1) cls. (a),  (b) or (c). For reasons already stated, a proceeding for relief  against infringement  of  civil  right  of  a  person  is  a   civil proceeding   even  if  the  infringement  be  in   purported enforcement of a taxing statute.  Section 261 of the Income- tax  Act 1961 under which an appeal lies to this Court  from any  judgment delivered on a reference made under s. 256  in any case which the High Court certifies to be a fit one  for appeal  to this Court is not an exception to that rule.   It is not because the reference is not a civil proceeding  that a  certificate  under  Art. 133 may not be  granted:  it  is because  of  the  advisory  character  of  the  jurisdiction exercised  by the High Court under s. 256 that  the  opinion delivered  by the High Court in a reference under s. 256  is not  a judgment, order or decree within the meaning of  Art. 133.   Similarly  the  enactment  of  s.  54  of  the   Land Acquisition  Act which expressly provides for an  appeal  to this Court, subject to the provisions contained in s. 110 of the Code of Civil Procedure, from an award, or from any part of  the  award made by the Court is easily  appreciated,  if regard be had to the character of the adjudication, which is in  the  nature of an award in an arbitration:  see  Rangoon Botatoung Company Ltd. v.     The Collector, Rangoon(1). By a petition for a writ under Art. 226 of the Constitution, extraordinary  jurisdiction of the High Court to issue  high prerogative  writs  granting  relief  in  special  cases  to persons aggrieved by the exercise of authority-statutory  or otherwise-by  public  officers or  authorities  is  invoked. This jurisdiction is undoubtedly special and exclusive,  but on that account the nature of the proceeding in which it  is exercised is not altered.  Where a revenue

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(1)  L.R. 39 I.A. 197. 198 authority seeks to levy tax or threatens action in purported exercise of powers conferred by an Act relating to  revenue, the primary impact of such an act or threat is on the  civil rights of the party aggrieved and when relief is claimed  in that  behalf  it is a civil proceeding, even  if  relief  is claimed  not  in a suit but by resort to  the  extraordinary jurisdiction of the High Court to issue writs. It  is  not  easy to attribute to  the  expression  "revenue proceeding"  any  precise connotation, and  in  interpreting Arts.  132 (1) and 133 it would be difficult to project  the somewhat  anomalous  provision contained in s.  226  of  the Government  of India Act, 1935 under which,  for  historical reasons,  it was enacted that unless otherwise  provided  by the  appropriate legislature, no High Court shall  have  any original jurisdiction in any matter concerning the  revenue, or  concerning  any act ordered or done  in  the  collection thereof  according to the usage and practice of the  country or the law for the time being in force.  This section barred the  High  Court from exercising  original  jurisdiction  in matters  concerning revenue.  There was no such bar  against subordinate  courts, nor against the exercise  of  appellate jurisdiction  by  the  High  Courts  in  matters  concerning revenue instituted in subordinate courts.  No provision  has been  made  in  the Constitution similar to S.  226  of  the Government  of  India Act, and there is no reason  to  think that it was intended to deprive the High Court of its  power to  certify cases concerning revenue, by enacting  that  the High  Court  may certify a case in a civil  proceeding.   No ground  is suggested for acceptance that while removing  the ban  against  the  High  Court’s  original  jurisdiction  in matters concerning revenue, the Constitution imposed another ban  against the exercise of power to certify cases  decided by  the  High  Court in the appellate as  well  as  original jurisdiction when the cases concerned revenue. We have already set out our reasons for holding that a  Pro- ceeding   taken  for  recovery  of  a  tax  is  not   "other proceeding’  under  Art. 132 (1) : such a  proceeding  is  a civil  proceeding  within the meaning of Art.  133(1).   The object of referring to "other proceeding" in that clause  is merely  to emphasize that adjudications made in  proceedings which are not included in the description civil or  criminal would  still attract the provisions of Art. 132 (1) in  case they  raise  a  substantial  question  of  law  as  to   the interpretation  of the Constitution.  A proceeding in  which relief  is claimed against action of revenue authorities  is included   in  the  civil  proceeding  and  not  in   "other proceeding"  within  the  meaning of  Art.  132(1),  and  an aggrieved party’s right to appeal to this Court from  orders in those proceedings is exercisable in 199 the  same  manner as it would be in the case  of  a  decree, order or judgment in any other civil proceeding. A  large number of cases have arisen before the High  Courts in India in which conflicting views about the meaning of the expression "civil proceeding" were expressed.  In some cases it was held that the expression "civil proceeding"  excludes a proceeding instituted in the High Court -for the issue  of a  -writ whatever may be the nature of the  right  infringed and the relief claimed: in other cases it has been held that a proceeding resulting from an application for a writ Linder Art. 226 of the Constitution may in certain cases be  deemed to  be  a "civil proceeding", if the claim made,  the  right infringed and the relief sought warrant that inference :  in

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still  another set of cases it has been held that even if  a proceeding  commenced by a petition for a writ be  generally categorised  as a civil proceeding, where  the  jurisdiction which  the  High  Court exercises relates  to  revenue,  the proceeding is not civil.  A perusal of the reasons given  in the cases prompt the following observations.  There are  two preliminary conditions to the exercise of the power to grant certificate : (a) there must be a judgment, decree or  final order, and that judgment, decree or final order must be made in  a  civil  proceeding.   An advisory  opinion  in  a  tax reference  may not be appealed from with  certificate  under Art.  133, because the opinion is not a judgment, decree  or final  order,  and  (b) a proceeding does not  cease  to  be civil,  when  relief  is claimed for  enforcement  of  civil rights merely because the proceeding is not tried as a civil suit.   In  a  large  majority of the  cases  in  which  the jurisdiction of the High Court to certify a case under  Art. 133(1)  was negatived it appears to have been  assumed  that the  expression "other proceeding" used in Art. 132  of  the Constitution is or includes a proceeding of the nature of  a revenue  proceeding,  and therefore  the  expression  "civil proceeding"  in  Art.  133(1) does  not  include  a  revenue proceeding.  This assumption for reasons already set out  is erroneous. We  do not think that any useful purpose will be  served  by entering upon a detailed analysis of the cases to which  our attention  was invited in which the view has been  expressed that in a petition under Art. 226 of the Constitution  where relief  is claimed in respect of -action sought to be  taken by  the revenue authorities, the High Court has no power  to issue  a  certificate under Art. 133  of  the  Constitution. Express  prescription of two independent conditions  by  the Constitution   on   the  existence  of   which   alone   the jurisdiction  of the High Court may be invoked, has in  some cases 200 been  obliterated,  and the ground that from an order  in  a reference  in  a  case concerning  revenue  for  opinion,  a certificate may not be granted under Art. 133, because there is  no  judgment, decree or final order has  been  projected into a ground for denying that proceeding the character of a civil proceeding. On  a careful review of the provisions of the  Constitution, we  are  of  the  opinion  that  there  is  no  ground   for restricting the expression "civil proceeding" only to  those proceedings  which arise out of civil suits  or  proceedings which  are tried as civil suits, nor is there  any  rational basis for excluding from its purview proceedings  instituted and tried in the High Court in exercise of its  jurisdiction under  Art.  226,  where the aggrieved  party  seeks  relief against infringement of civil rights by authorities purport- ing to act in exercise of the powers conferred upon them by revenue statutes.   The  preliminary  objection  raised   by counsel for the assessee must therefore fail. We may now     turn to the question which is raised on the merits in this appeal.  Section 18-A which was added by the Indian  Income-tax (Amendment) Act 11 of 1944  for  imposing liability  for  advance payment of tax enacts by  the  first sub-section, insofar as it is material, that where there  is no provision made for deduction of income-tax at the time of payment,  the  Income-tax  Officer  may  on  or  after   the commencement  of  any financial year, by order  in  writing, require  an assessee to pay quarterly to the credit  of  the Central  Government the income-tax and super-tax payable  on so much of such income as is included in his total income of

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the  latest previous year in respect of which, he  has  been assessed.  Contrary to the two basic concepts of the  scheme of the Indian Income-tax Act under which tax is charged upon the  income of the previous year and not the income  of  the assessment  year,  and liability does not  arise  until  the annual Finance Act is passed charging income to tax, s. 18-A introduces  within  the scheme of the Act the  principle  of advance payment of tax and authorises collection of  advance tax before the assessment year commences and before even the Finance  Act which imposes liability is enacted.   But  this tax  is  advance  tax which is to be  adjusted  against  tax payable on the income of the financial year in the light  of the total income which may be computed and also in the light of  the  Finance Act which may be  passed.   Assessment  and demand for advance payment of tax are therefore provisional. If  ultimately the advance tax paid is in excess of the  tax finally   assessed, refund will be granted to the  assessee; if the advance tax                             201 paid  is  less  than what is payable,  the  balance  becomes payable  on  the  final  assessment.   With  the  object  of enforcing  compliance  with  the provision  for  payment  of advance tax effectively, and at the same time to protect the assessee  from avoidable harassment, the Legislature made  a provision under sub-s. (2) of s. 18-A enabling the  assessee before  the  last  instalment is due  to  intimate  his  own estimate  of the income of the previous year to the  Income- tax  Officer  and the tax payable by him calculated  in  the manner  laid  down in sub-s. (1) and to pay such  amount  as accords  with  his  estimate.  Provision is  also  made  for submitting  revised estimate of income.  The Legislature  by sub-s. (6) also on the other hand penalises an assessee  who seeks   to   evade   liability  to  pay   advance   tax   by underestimating his income by providing that if in any  year an assessee paid tax under sub-s. (2) or (3) on the basis of his own estimate and the tax so paid is less than eighty per cent  of  the  tax determined on the basis  of  the  regular assessment,  so far as such tax relates to income  to  which the provisions of s. 18 do not apply and so far as it is not due  to variations in the rates of tax made by  the  Finance Act enacted for the year for which the regular assessment is made, simple interest at the rate of six per cent per  annum from  the 1st day of January in the financial year in  which the  tax  was  paid  up to the date’  of  the  said  regular assessment shall be payable by the assessee upon the  amount by which the tax so paid falls short of the said eighty  per cent.    Subsection  (6)  as  originally  enacted  left   no discretion  to the Income-tax Officer: if the estimate  fell below  the  prescribed  limit, the  Income-tax  Officer  was obliged  to  direct payment of interest.  But by Act  25  of 1953  which  was enacted with retrospective  operation  from April 1, 1952, the following proviso was added as the  fifth proviso to s. 18-A(6):               "Provided  further  that in such  a  case  and               under such circumstances as may be prescribed,               the Income-tax Officer may reduce or waive the               interest payable by the assessee." The amendment authorised the Income-tax Officer to reduce or waive the interest payable by the assessee in such cases and under such circumstances as may be prescribed.  It was given retrospective   operation  from  April  1,  1952,  and   the discretion conferred upon the Income-tax Officer became,  by fiction  of  law, exercisable as from April  1,  1952,  even though  the Act came into force from May 24, 1953,  and  the cases in which and circumstances under which the  discretion

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was   to  be  exercised  were  prescribed  by  the   Central Government by r. 48 in December 1953. 202 The Income-tax Officer in the present case, on the  language used  in the statute as it stood on the date of  making  the order  of  assessment,  was bound to  impose  liability  for payment  of interest under sub-s. (6).  But for some  reason which  cannot  be  ascertained from the record  he  did  not impose  that liability.  It was only when in the  course  of audit  this  lacuna  was pointed out,  that  the  Income-tax Officer  commenced proceeding under S. 35 of the  Income-tax Act for rectification of the order of assessment.  There was at   the  date  of  the  original  assessment  an   absolute obligation  imposed upon the assessee to pay interest  under s.  18-A(6),  but by reason of the  retrospective  operation given to the fifth proviso added to sub-s. (6) by Act 25  of 1953,   the  Income-tax  Officer  was  invested   with   the discretion  to  reduce  or waive  interest  payable  by  the assessee, this power the Income-tax Officer must, in view of the  retrospective  amendment,  be deemed  in  law  to  have possessed  on the date on which the order of assessment  was made in this case. The Attorney-General appearing on behalf of the Commissioner contended that to the fifth proviso to s. 18-A (6) no retro- spective  operation could effectively be given, because  the rules which alone could render the discretion operative were framed  for the first time in December 1953.  We are  unable to  agree  with that view.  The  Legislature  has  expressly given  operation to the fifth proviso to s. 18-A  (6),  from April  1, 1952.  It -is true that the proviso operates  only in  respect  of  cases and under  circumstances  as  may  be prescribed,  but  as  soon as the rules  were  framed  which effectuate  the purposes for which the proviso was  enacted, the  proviso and the rules became effective  retrospectively from April 1, 1952. Mr.  Sastri  appearing on behalf of the  assessee  contended that  this  Court has laid down in T. Cajee v.  U.  Jormanik Siem  and  Anr(1)  that where power  is  conferred  upon  an authority and it is made exercisable in the manner  provided by subsidiary legislation, failure to enact such  subsidiary legislation  will  not defeat the power: the power  will  be exercisable  without the restrictions which may be, but  are not imposed, and therefore once the power of the  Income-tax Officer  came  into  being  that  power  became  exercisable immediately  without restrictions or limitations  until  the Central Government chose to frame rules defining those  res- trictions.   We do not think that the case cited by  counsel for  the  assesee has any application.  That was a  case  in which  a  District Council was constituted for  the  Jaintia Hill District under the Sixth Schedule to the  Constitution. Under the Sixth Schedule, (1)  [1961] 1 S.C.R. 750.                             203 the District Council was empowered to make laws, inter alia, for  administration  of  the District,  and  appointment  or succession  of chiefs or Headmen, but the  District  Council made  no rules regulating the appointment and succession  of chiefs  and  Headmen.  It was held by this  Court  that  the District  Council being an administrative,  and  legislative body,  it  could, so long as no law was made,  exercise  its administrative powers to determine the appointment of Chiefs or  Headmen.   After the law was  made,  the  administrative powers could be exercised subject to the law.  The case  has no  application  to the present case.   The  Sixth  Schedule vested  in  the District Council  a  general  administrative

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power  which  was capable of being restricted  by  law,  but until  so  restricted the power was absolute.  In  the  case before  us,  however,  the discretion  to  reduce  or  waive interest   can  only  be  exercised  in  cases   and   under circumstances to be prescribed.  There was no absolute power in  which the Income-tax Officer was invested to  reduce  or waive  interest;  his  power  could  be  exercised  only  in prescribed   cases  within  the  limits  of  the   authority conferred  upon him.  He could not reduce or waive  interest except  in cases and in circumstances prescribed.  But  once the  rules are framed, they by reason of  the  retrospective operation  of  Act 25 of 1953 become operative as  from  the date on which the Act has become operative. This  Court  in M. K. Venkatachalam I.T.O.  and  Another  v. Bombay  Dyeing  and  Manufacturing Company  Ltd(1)  held  in dealing  with a case arising under the second proviso to  s. 18-A  (5)  (which was also inserted by Act 25 of  1953  with retrospective operation from April 1, 1952) that the Income- tax  Officer has power under s. 35 of the Act to  rectify  a mistake  in the assessment, even though the mistake was  the result  of  a legal fiction arising from  the  retrospective operation  given  to the amending  Act.  in  Venkatachalam’s case(1)  on October 9, 1952 the Income-tax Officer  assessed the  tax-payer for the assessment year 1952-53 and gave  him credit  for certain amount as representing interest  on  tax paid  in  advance under s. 18-A (5). Thereafter on  May  24, 1953  the Indian Income-tax (Amendment) Act 25 of 1953  came into  force  which added a proviso to s. 18-A (5)  that  the assessee  was entitled to interest not on the whole  of  the advance tax paid by him, but only on the difference  between the  payment made and the amount assessed.   This  amendment being  retrospective  as from April 1, 1952  the  Income-tax Officer  acting  under  s.  35  of  the  Act  rectified  the assessment  order  and directed that the assessee  be  given credit for a smaller amount by way of interest on tax paid (1) [1959] S.C.R. 703. sup./65-14 204 in  advance,  and  issued a notice  of  demand  against  the assessee for the balance remaining due by him.  The assessee filed  a petition in the High Court of Bombay praying for  a writ  prohibiting  the Commissioner of  Income-tax  and  the Income-tax  Officer from enforcing the rectified  order  and notice  of  demand.  The High Court issued the  writ  prayed for,  holding that S. 35 was not applicable to the  case  as the mistake could not be said to be apparent from the record and  the question must be judged in the light of the law  as it  stood on the day when the order was passed.  This  Court reversed  the order of the High Court and held that in  view of  the retrospective operation given to the newly  inserted provision  in S. 18-A(5) of the principal Act as from  April 1,  1952 the order passed by the Income-tax  Officer  before the  date on which the amending Act came into operation  was incompatible  with  the  provisions  of  that  proviso   and disclosed a mistake apparent from the record.  The Court  in that case relied upon the observations made by Lord  Asquith of  Bishopstone in East End Dwellings Co. Ltd.  v.  Finsbury Borough Council(1) "if you are bidden to treat an  imaginary state of affairs as real, you must surely, unless prohibited from  doing  so, also imagine as real the  consequences  and incidents  which, if the "putative state of affairs  had  in fact  existed,  must inevitably have flowed from  or  accom- panied  it." In Venkatachalam’s case (2 ) by virtue  of  the retrospective  operation of the amendment, the assessee  was entitled  to interest which was less than what  had  already

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been  allowed  to him in the course of assessment.   On  the date on which the order of assessment was made, the assessee was entitled to that amount. but by virtue of the  amendment which   was  retrospective,  his  right  was   substantially restricted.   It was held by this Court that in exercise  of the  powers under s. 35 of the Indian Income-tax Act on  the application of the retrospective amendment, it must be  held that, there was a mistake apparent on the face of the order. In  the present case the position is reversed, but  on  that account  the  principle is not  anytheless  applicable.   By virtue  of  the retrospective amendment in s. 18-A  (6)  the order  which was made by the Income-tax Officer on the  date of  assessment and which was plainly inconsistent  with  the terms  of the section as it then stood became one  which  he was competent to pass in exercise of his power. The  Attorney-General  contended  that in  any  event  there nothing to show that the income-tax officer had purported to exercise  his  discretion  when  he  passed  the  order   of assessment and (1)  [1952] AC. 109,132.                    (2) (1959) S.C.R. 703.                             20 5 did  not impose any liability for payment of interest  under s. 18-A (6).  That may be so.  But the case of the  assessee did  fall  within the terms of r. 48(1) and  the  Income-tax Officer  must  in law be bound to consider  whether  he  was entitled to reduction or waiver of interest tinder the fifth proviso.   The  amendment  and the  rules  which  came  into operation later must in view of the retrospective  operation be  deemed to be then extant, and the fact that the  Income- tax Officer could not in making the assessment have adjusted his approach to the problem before him in the light of those provisions is irrelevant in considering the legality of  his order,  The  order of the Income-tax Officer which  did  not take note of the law deemed to be in force must be  regarded as   defective.    The  matter  was   brought   before   the Commissioner  of Income-tax and it is unfortunate  that  the Commissioner in considering the matter under s. 33-A assumed that  the  amending  Act 25 of  1953  had  no  retrospective operation  and  rejected the claim of the  assessee  on  the ground  that at the (late when the order of  assessment  was made,  Act 25 of 1953 had not come into operation, and  that the  Act  became effective as from December  1953  when  the rules   were  framed.   In  so  holding,  the   Commissioner committed  an  error  of law apparent on  the  face  of  the record.  The High Court was therefore right in setting aside the  order  which  was passed by  the  Commissioner  without considering the proviso to s. 1    A  (6) which was  clearly applicable to the case of the assessee  and in the light  of r. 48 which was enacted in pursuance of that proviso. The  Attorney-General contended that the petition  filed  by the  assesse did not expressly seek to plead the case  which was ultimately made out by the High Court.  It is .rue  that the  petition is somewhat vague in setting out the  material particulars which have a bearing on the plea which  appealed to  the  High Court.  But it cannot be said,  having  regard specially  to paragraph-6 cl. (iii) of the petition that  in granting  relief to the assessee a new case was made out  by the High Court. The appeal fails and Is dismissed with costs.  There will be one hearing fee in Civil Appeals Nos. 1003 of 1961 and  1004 of 1963. Mudholkar J. I agree with  my learned brother Shah J.,  that the  expression  "civil proceeding" in Art. 133 (1)  of  the Constitution cannot be restricted to proceedings which arise

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out of civil suits or proceedings.  A proceeding before  the High  Court  under Art. 226 or Art. 227 in which  relief  is sought in respect of liability to 206 pay  tax  or penalty levied by a  revenue  authority  would, accordingly,  be  a civil proceeding.  The High  Court  was, therefore,  competent  to grant a certificate in  this  case under Art. 133(1). On  the  merits my learned brother has held  that  the  High Court  was  right in quashing the order  of  the  Income-tax Commissioner, Bombay, by which he confirmed the order of the First Income-tax Officer, C-II Ward,, Bombay, dated  October 4,  1956 rectifying under s. 35 of the Income-tax Act,  1922 the  regular assessment made by him on March 31, 1953.   The sequence  of the relevant events which have occurred  is  as follows.  On September 17, 1947 the respondents filed  under s. 18-A(2) an estimate of their income and on September  27, 1947  they made an advance payment of tax on its basis.   On January 10, 1948 they filed a revised estimate in  pursuance of which they made a further advance payment towards the tax on  January 17, 1948.  On August 23, 1950 they paid the  tax in pursuance of the -provisional assessment made on July 22, 1950  under  s.  23-B.  All this was  with  respect  to  the assessment   year   1948-49.   While  making   the   regular assessment on March 31, 1953 the Income-tax Officer  omitted to  charge penal interest as required by s. 1 8-A(6) of  the Income-tax  Act.  It is not disputed that according  to  the law as it stood on the date on which the regular  assessment was  made the Income-tax Officer was bound to  charge  penal interest.   By Act 25 of 1953 which came into force  on  May 24, 1953 the following proviso was added to s. 18-A(6)               "Provided  further  that in such  a  case  and               under such circumstances as may be prescribed,               the Income-tax Officer may reduce or waive the               interest payable by the assessee." In order to give effect to the proviso the Central Board  of Revenue framed rule 42 and notified it on December 14, 1953. The rule read as follows :               "The  Income-tax Officer may reduce  or  waive               the interest payable under section 18-A in the               case  and  under the  circumstances  mentioned               below, namely :               (1)   Where   the   relevant   assessment   is               completed   more  than  one  year  after   the               submission   of  the  return,  the  delay   in               assessment  not  being  attributable  to   the               assessee.               (2)   Where  a  person  is  under  section  43               deemed to be an agent of another person and is               assessed upon the latter’s income.                             207               (3)   Where  the assessee has income  from  an               unregistered    firm  to which the  provisions               of clause (b) of subsection    (5) of  section               23 ire applied.               (4)   Where   the  ’Previous  year’   is   the               financial  year or any year ending near  about               the  close  of the financial  year  and  large               profits  are made after the 15th of March,  in               circumstances which could not be foreseen.               (5)   Any   case  in  which   the   Inspecting               Assistant  Commissioner  considers  that   the               circumstances  are  such that a  reduction  or               waiver  of the interest payable under  section               18-A(6) is justified."

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             On October 4. 1956 the Income-tax Officer made               the following order under s. 35 of the Act :               "During  the interest checking of  C-II  Ward,               the  Auditor has pointed out a mistake in  not               charging  penal  interest tinder  section  18-               A(6).   As  this  mistake  is  ‘apparent  from               record the same is rectified under section  35               after giving due notice to the assessee. Revised notice of demand to be issued." Thereafter a notice demanding Rs. 14,929-10-0 was issued  to the  respondents.   The respondents  challenged  this  order before  the  Commissioner of Income-tax, Bombay.   The  main contention raised before him was that the omission to charge penal  interest at the time of regular assessment cannot  be considered to be a mistake apparent from the record in  view of  proviso to s. 18-A(6) and the Rules made thereunder  and therefore  the  Income-tax  Officer could  not  rectify  the regular  assessment  by resort to s. 35 of  the  Act.   This contention was not accepted by the Income-tax  Commissioner. He, however, directed that in the circumstances of the  case the  respondents would be liable to pay penal interest  only for  the period between January 1, 1948 and June  13,  1950. Being dissatisfied with this decision the respondents  moved the High Court for a writ under Art. 226 of the Constitution and succeeded in having the notice of demand quashed. The  ground upon which the High Court -ranted relief to  the respondents was that the Amending Act of 1953 which  enacted the last proviso to s. 18-A(6) was made, retrospective  from April  1,  1952;  that,  therefore,  that  proviso  must  be regarded  as being on the statute book on the date on  which the regular assessment was 208 made, that, according to the -High Court, being the position the conclusion to be reached was that the Income-tax Officer had  vested  in  him a discretion to  reduce  or  waive  the interest  payable by the assessee notwithstanding  the  fact that the proviso was not there on the statute book when  the assessment  order was made.  After referring to the  earlier decision of the High Court in Shantilal Rayji v. M. C. Nair, IV  Income-tax  Officer, E.  Ward, Bombay  and  anr.(1)  the learned Judges observed               "In  our judgment in that case we referred  to               the decision of the Supreme Court in the State               of Bombay v. Pandurang Vinayak(2) where  their               lordships of the Supreme Court pointed out the               effect  of a deeming provision being  inserted               in  any statute and being given  retrospective               operation.  We also referred to a passage from               the  judgment  of  Lord Asquith  in  East  End               DWellings   Co.  Ltd.  v.   Finsbury   Borough               Council(1) in which the learned Law Lord  very               forcibly  brought out the full effect  of  the               legal  fiction.  The view which we  ultimately               took  of  the matter was that  the  Income-tax               Officer had no jurisdiction to pass the  order               of   rectification.   By  operation  of   tile               deeming  provision which was retrospective  in               it,,,  operation,  it was to  be  assumed  and               taken  that on the date on which he  made  the               assessment order he had jurisdiction and power               to  reduce  or waive the  amount  of  interest               payable  by  the  assessee.   The   Income-tax               Officer not having done so, the only inference               possible was that he had decided to waive  the               amount of interest and in those  circumstances

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             he bad no jurisdiction subsequently to rectify               that  order  on the ground that there  was  an               error on the face of the record." There  is  no doubt that by making the proviso  in  question retrospective  as  from April 1, 1952  the  legislature  has created  a  fiction  and because of  that  fiction  we  must proceed  on  the footing that the proviso was  in  existence when  the regular assessment was made The  learned  Attorney General,  however, contended before us that though that  was the  position the proviso could not be given effect to  till the  Central Board of Revenue prescribed the class of  cases and  circumstances  in which an Income-tax  authority  could exercise  the  discretion  conferred  by  the  proviso.   He pointed  out  that  r. 48 framed by  the  Central  Board  of Revenue  which  prescribes these matters does  not  make  it retrospective and, therefore, it should be (1)  (1958) 34 I.T.R. 439. (2) (1953) S.C.R. 773. (3) (1952) A.C. 109. 209 deemed to be only prospective in its application.  I find it difficult  to accept this argument.  The proviso was  itself made  retrospective as from April 1, 1952.  Rule 48 as  soon as  it was framed was to be read alone with the proviso  and as the proviso is retrospective the rule must also be deemed retrospective.    It  is  a  well  accepted   principle   of construction of statutes that even if a provision of law may not  have  been  expressly made retrospective  it  could  be deemed  to be so if the circumstances justify the  inference that   the   legislature   intended  that   it   should   be retrospective.  Such an intention is evident in this case. Even though the proviso and the rule must be deemed to  have been in force on April 1, 1952, 1 find it difficult to agree with  the High Court that omission to charge penal  interest at  the  time  of  making the  regular  assessment  must  be ascribed  to  the exercise of discretion by  the  Income-tax Officer.   Let  it not be forgotten that when he  made  that assessment,  in point of fact, be passed no discretion  and, therefore,  he  was bound by law to charge  penal  interest. His  omission  to do so must, therefore, be ascribed  to  an oversight  and not to deliberateness.  By an omission to  do what  he  was  bound by law to  do  the  Income-tax  Officer committed an error and that error appears on the face of the record.   He was, therefore, competent to rectify  under  s. 35.  Indeed, if instead of on March 31, 1953 the  Income-tax Officer  had made the regular assessment on March  31,  1952 could  there  have been any scope for the surmise  that  his omission  to charge penal interest was attributable  to  the exercise  of  any discretion ? At any rate  without  further material we cannot even assume that while making the regular assessment on March 31, 1953 the Income-tax Officer, upon an erroneous  view of law, came to the conclusion that  he  had discretion under s. 18-A(6) to reduce or waive any  interest and   that,  therefore,  he  purported  to   exercise   that discretion.  At least prima facie the Income-tax Officer  in omitting  to  charge penal interest made  a  mistake.   This would appear to be home out by the fact that on October  14, 1956  when  he made good the omission by  resorting  to  the power conferred by s. 35 he accepted the position that  what he  did earlier was through mistake.  In the  circumstances, therefore,  agreeing, with the Income-tax  Commissioner  but disagreeing with the High Court, I hold that the Income.-tax Officer was competent to rectify the mistake under s. 35. I would, therefore, allow the appeals and quash the order of the  High Court but in the circumstances of the  case  would

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make no order as to costs. Appeals dismissed. 210