1960 PLP 761 (PTD)

CONSTANTINE, J.‑The allegations in support of this Writ Petition are briefly as follows. In pursuance of a barter agree ment between Pakistan (Respondent 6) and the Government of the Philippines, Respondent 4 (Messrs Roxas) chartered a ship from the petitioner as agent of the Government of the Philippines. Respondent 5 (A. A. Badat, sole proprietor of Ivlom Corporation) was also an agent of the Government of the Philippines, and deposited a sum of over three lac rupees with Respondent 3 (Messrs Graham Trading Co.) as local agents of the petitioner by the following receipt in November 1954 :‑ "Received from Ivlom Corporation on behalf of C. A. Roxas & Company of Manila, Charterers the sum of rupees three lacs fifty four thousand one hundred twenty four, annas ten, on account of security deposit against payment of freight and dead freight due to Messrs J. & C. Harrison Ltd., London payable in London, in sterling, in cash without discount as per Charter Party dated 10th September 1954, for rice shipment in m. v. "Harpagon"." The frieght is payable in pounds sterling and a sum of 17,221‑13‑8d is still due as freight. In Suit 909 of 1955, by Respondent 4 (Messrs Roxas & Co.) and two others, against Respondent 5 and the Government of the Philippines, an injunction was granted to Respondent 4 restraining Respondent 3 from paying the said sum of three lacs odd to anyone, including the petitioner, and the petitioner moved an application in Court for the discharge of that injunction, the matter apparently still being pending there. As a step towards recovering arrears of Income‑tax from Respondent 5 on 16th December 1957 Respondent 1 (an Income‑tax Officer) gave notice purporting to be under section 46 (5‑A) of the Income‑tax Act to Respondent No. 3, purporting to attach the said sum. In this letter it was stated: "The books of your company were seen by me on 6‑12‑

57. From the books it is clear that a sum of Rs. 3,54,124‑10‑0 belonging to Messrs Ivlom Corporation is still lying with you as security deposit and has not as yet been adjusted against freight. As you are still holding the amount, I have to request you to make payment of the above amount within three days of the receipt hereof to the Income‑tax Department failing which I shall be compelled to take recovery proceedings. As this amount has now been attached under section 46 (5‑A) of the Income‑tax Act, you can neither pay this amount to Messrs Ivlom Corporation, nor this amount can be adjusted against any expense that might have been, incurred by my assessee." As a result of the injunction order and of this notice given by Respondent No. 1, Respondent 3 refuses to pay the said sum of rupees three lacs odd to the petitioner. It was therefore prayed, "That a Writ or Writs of certiorari, mandamus, Prohibition are or any other suitable writ or writs, order or orders, or direction or directions be issued: (a) Restraining the Respondents or any of them from exercising any claim‑over the said sum of Rs. 3,54,124‑10‑0 now held by Respondent No. 3 as Trustee for Petitioner ; and (b) Order payment of the said sum of Rs. 2,30,02‑12‑7 being the rupee equivalent of the said sum of 17,221‑13‑8 or to the order of the Petitioners ; and (c) Ordering Respondent No. 5 to arrange for the transfer of the said sum of Rs. 2,30,021‑12‑7 being the rupee equivalent of 17,221‑13‑8 in pounds sterling in favour of the Petitioner. Respondents 3 agree that they hold this money on behalf of the petitioner and the only contesting Respondent is the Income‑tax Officer, who denied all the allegations in the petition and finally submitted that the money in question did in fact belong to Respondent 5 and had been rightly attached. No allegations of fact were made in order to substantiate the claim that the money belonged to Respondent

5. Section 46 (5‑A) of the income‑tax Act runs as follows: "The Income‑tax Officer may at any time, or from time to time, by notice in writing (a copy of which shall be forwarded to the assessee at his last address known to the Income‑tax Officer) require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Income‑tax Officer, either forthwith, or forthwith upon the money becoming due or coming into the possession of the person who holds or they hold it as aforesaid, or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the tax‑payer in respect of arrears of income‑tax and penalty or the whole of the money when it is equal to or less than that amount. The Income‑tax Officer may at any time or from time to time amend or revoke any such notice or extend the time for making any payment in pursuance of the notice. Any person making any payment in compliance with a notice under this subsection shall be deemed to have made the payment under the authority of the assessee and the receipt of the Income‑tax Officer shall constitute a good and sufficient dis charge of the liability of such person to the assessee to the extent of the amount referred to in the receipt. Any person discharging any liability to the assessee after receipt of the notice referred to in this subsection shall be personally liable to the Income‑tax Officer to the extent of the liability discharged or to the extent of the liability of the assessee for tax and penalties, whichever is less. If the person to whom a notice under this subsection is sent fails to make payment in compliance therewith to the Income‑tax Officer the notice issued by the Income‑tax Officer shall have the same effect as an attachment by the Collector in exercise of his powers under the proviso to subsection (2) of section 46 and further proceedings may be taken by and before the Collector accordingly." The proviso to subsection (2) of section 46 is as follows: "Provided that without prejudice to any other powers of the Collector in this behalf, he shall for the purpose of recovering the said amount have the powers which under the Code of Civil Procedure 1908, a Civil Court has for the purpose of the recovery of an amount due under a decree," and it is common ground in this case that powers of the Collector in this matter are to be exercised under the Code of Civil Procedure. In Sind, including Karachi, the provisions of Order XXI, rule 46, Civil Procedure Code, have been supple mented by the addition of rules 46‑A to 46‑I. The substance is that the Court calls upon the garnishee either to pay into Court a debt or to show cause why he should not do so. Where it appears probable that the debt attached belongs to some third person or that any third person has a lien, charge or interest therein, the Court may hear such person and pass such orders as it thinks fit and proper. In Addition a third person has, under rule 58, the right to prefer a claim to any property attached and the Court shall investigate the claim. It appears to us that a notice issued by the Income‑tax authority does not determine the question whether in fact the debt alleged really exists. The party disputing liability has the right to apply to the Collector and his claim will be inquired into and disposed of by the Collector. In this view we are fortified by C. Dhanalaxmi v. Income‑tax Officer, Madras (31 I T R 460). In our opinion, therefore even assuming that a writ could be issued by this Court quashing the notice given by Respondent 1 or restraining Respondent I from proceeding under such notice, yet the petitioner has an equally efficacious and speedy remedy by way of application to the Collector. But in truth, it also appears to us that the action of the Income‑tax Officer in issuing a notice under section 46 (5‑A) is a purely executive act. He is not bound before issuing such a notice, to inquire from the garnishee whether such a debt exists or not, and in fact, to hold that he should make such an inquiry before issuing a notice might well defeat the purposes of the section, for during the pendency of such an inquiry the garnishee might pay the debt to the assessee, and if he does so before the issue of a notice, the Income‑tax Officer's notice, when issued, would be useless. The authority who has the right to determine whether the debt exists or not, and whether any other person has a claim upon the debt is the Collector, exercising powers of a Civil Court. It was argued by Mr. Fazlur Rahman that the Income‑tax Officer exceeds his jurisdiction in issuing a notice unless the debt actually exists, but that is not the case. He is entitled so far as we can see to issue the notice if in his sole discretion he considers it is probable that such a debt exists. It is not necessary for us to go into the interesting question whether a Writ of mandamus can issue in cases where a status confers jurisdiction to perform a purely administrative Act and it is alleged that the act purporting to be done in pursuance of the statute has been done without jurisdiction. The result is, therefore, that the petition fails on two grounds firstly that the question regarding the existence of a debt or claim of the petitioner to the monies can equally well be determined by the authority, viz., the Collector, appointed for this purpose by the Legislature and secondly, that the action of the Income‑tax Officer in issuing a notice was not without jurisdiction. Since the Income‑tax Officer by his affidavit contended that in fact a debt existed and did not raise either of the two grounds on which we have proceeded, and since the affidavits of the petitioner prima facie show that no debt existed in respect of this payment made, as the receipt shows, on behalf of Messrs Roxas, we consider that there should be no costs of this petition. Petition dismissed.