1984 PLP 104 (PTD)

9. Mr. Shahenshah Hussain, learned counsel for the petitioners, raised the following contentions :‑ (i) That the undertaking is without consideration and was not accepted by the Income‑tax Department ; (ii) That agreement dated 7‑11‑1977 was collusive and designed with the object of making unlawful gain from and at the cost of the Company ; (iii) Neither the Company owed any amount to respondent No. 3 nor to his wife; and (iv) The procedure under rule 46(5‑A) cannot be used as a process for satisfying the debt of the assessee. In support of his arguments he relied upon P L D 1969 Kar. 21.

10. The learned Deputy Attorney‑General on the other hand contended that the petitioner' Company is estopped from resiling from the undertaking and the agreement, dated 7‑11‑1977. It is also contended that petitioner's Company had not exhausted the alternate remedies which are available to them and, therefore, the petition is barred.

11. In order to appreciate the contentions of the parties it is necessary to reproduce section 93 of the Income‑tax Ordinance, 1979, and the relevant Income‑tax Rules, 1982. Section 93.‑(1) There any assessee is ‑in default in making payment of. tax, the Income‑tax Officer may forward to the Tax Recovery Officer a certificate in the prescribed form specifying the amount of tax due from the assessee." (2) Where such certificate is received by the Tax Recovery Officer, he shall serve upon the assessee a notice in the prescribed form requiring him to pay the amount specified in the certificate within such time as specified in the notice. (3) If the amount referred to in the notice issued under subsection (2) is not paid within the time specified therein or within the further time, if any, allowed by the Tax Recovery Officer, the Tax Recovery Officer may proceed to recovery from the assessee the said amount by one or more of the following modes, namely‑ (a) attachment and sale of any movable or immovable property of the assessee ; (b) appointment of receiver for the management of the movable or immovable property of the assessee ; and (c) arrest of the assessee and his detention in person for a period not exceeding six months. "Rule 173.‑An appeal from any order, passed by the Tax Recovery Officer under these rules shall lie to the Inspecting Assistant Commis sioner of Income‑tax having the administrative control of the Income tax Recovery Officer the order. Rule 174.‑Any party whose interest is affected, may within thirty days from the date of the order passed by Inspecting Assistant Commissioner under Rule 173 file an application to the Commissioner of Income tax for revision of such order and the Commissioner may pass any such order on the application as he thinks fit."

12. Section 93(1) to (3) of the income‑tax Ordinance, 1979, is in the nature of a garnishee proceeding and it is intended to protect, the revenue and to enable the Income‑tax authorities to call upon creditor of the "assessee in default" from paying over the moneys in their hands to anyone without notice to the Income‑tax department or the revenue. This is one of the accredited methods by which both under the common law and under the taxing statutes moneys payable by a debtor, are secured and latter recovered.

13. After hearing the learned counsel for the parties, it seems necessary to consider all the grounds raised by the learned counsel for the petitioner, because in our opinion the petition can be disposed of only on one ground stated above.

14. The question before us is whether the petitioners having admitted the liability of the respondent No. 3 and his wife and allowed that position to remain unchanged from 1977 upto the present time, can now resile from the same. 15. 1n our opinion, since the petitioners with full knowledge of they facts undertook the liability of respondent No. 3 and his wife, and have) allowed that position to remain unchanged for nearly five years they are now debarred from setting up a different case.

16. In the instant case the petitioners' Company stated that there was a cash credit to. the tune of Rs. 16,66,656 in their books of accounts. This amount undoubtedly belonged to respondent No. 3 and his wife.

17. In Constitutional Petition No. 154 of 1976, decided on 25‑5‑1983 by a Bench of this Court of which one of us is a party, also repelled the con tention of the petitioner and held as follows :‑ "The Income‑tax Authorities can recover the dues of an assessee from a person who has undertaken or guaranteed the payment of such dues, It is not a case where the Income‑tax Authorities are recovering tax of one assessee from another assessee or person. The demand has been made as the petitioner bad undertaken to discharge the liabilities." It was further held that :‑ "The stand taken by the petitioner lacks liana fides arid does not entitle him to seek aid of constitutional jurisdiction of this Court." We entirely agree with the views expressed in the above judgment. We do not find any force in the contentions raised by the counsel for the petitioners and case cited by him is also distinguishable from the facts of this case. For these reasons by a short order, dated 15‑8:1983, the petition was dismissed in limine. M. Z. M. Appeal dismissed.