1982 PLP 128 (PTD)

The present appeal has been directed against the judgment and decree of the District Judge, Muzaffarabad dated 13‑9‑1981, whereby the order of dismissal of the suit passed by the Additional Sub‑Judge, Muzaffarabad was upheld. The brief facts giving rise to the present appeal are that appellant Mr. B. A. Farooqui, Advocate brought a suit seeking a perpetual injunction against defendants‑respondents, to the effect that they may be restrained from realizing a sum of Rs. 41.7 in pursuance of a notice of demand served upon him by defendant No. 2, the Income‑tax Officer Muzaffarabad. The plaintiff was served with a notice on 26‑3‑19$0, calling upon him to deposit the aforesaid sum which was outstanding against him, out of the amount payable as income‑tax. The plaintiff contested the liability of payment of the said amount and also alleged that proceedings were taken without providing an opportunity of hearing to the plaintiff. Both the subordinate Courts have dismissed the suit on the ground that the Civil Court had no jurisdiction to entertain such a suit. I have heard the arguments and gone through the record. The appellant has argued that notice was ambiguous and it does not specify the assessment years to which the outstanding amount pertained and that on one hand, the appellant was asked to deposit the amount with the treasury within a week and on the other hand defendant No. 1 was moved to realize the amount as land revenue. It has been further argued by the appellant that no evidence was led by the respondents to discharge the onus of Issue No. 2 and it cannot be said that defendant No. 2 acted under the relevant provisions of the Income‑tax Act or the Income‑tax Ordinance, 1979, as the case may be. I have given my earnest consideration to the arguments advanced by the parties and I am of the view that defects in. notice, if any, or the non -production of evidence by the respondents does not lend support to the contention of the appellant. The only point which needs determination in the present case is as to whether civil Court has the jurisdiction to entertain the present suit. The appellant has argued that section 67 of the Income‑tax Act stipulates that only a suit for setting aside or modifying an assessment made under the act is barred and his suit does not fall within any of such description, because he seeks an injunction relating to recovery proceedings. I am of the view that suit seeking a perpetual injunction against concerned authorities, restraining them from recovering the Income‑tax amount tantamount to defeat the order of assessment, especially so, when plaintiff appellant has averred in the plaint that no income‑tax was payable by him. Section 67 of the Income‑tax Act cannot be given restricted meanings that only a suit for modifying or setting aside an order of assessment of Income‑to is barred under section 67 and not a suit which though does not specifically challenge the assessment order but would practically nullify the same. I am fortified in my view by a case entitled Seth Harish Chandra v. Undo of India ((1962) 6 Taxation 231), wherein it was held that a civil suit seeking perpetual injunction against the recovery proceedings would fall within the ambit of section 67 of Income‑tax Act, 1922. It was further held in the aforesaid case that though the relief claimed by the assessee was not for setting aside or modifying an assessment order, yet such a result would follow if the suit was decreed and as such, section 67 was held applicable to suit for perpetual injunction against the authorities proceeding with the recovery of the assessed amount. The aforesaid authority was based on a number of other Authorities cited therein. The next point, namely, that the respondents should have led evidence, to prove that their action was under the Act, is also devoid of any force because there is no such allegation in the plaint that the respondents acted without any jurisdiction or their action was violative of any provisions of the Income‑tax Act. Moreover, there is a presumption of regular perform ance in favour of official and judicial acts under section 114 of the Evidence Act and the onus is always upon the party who challenges the correctness of such an act to prove that the same was violative of any statutory provision. For substantiating the contention, that a suit was not cognizable by civil Court, it was not necessary for the defendants to prove that they acted in accordance with law, especially so, when there was no allegation to the contrary. Even otherwise, if there were allegation that defendants acted in violation of any provision of Income‑tax laws, the matter would have been essentially cognizable by the appellate authorities or tribunals constituted under such laws and not by a civil Court. In the matters relating to the assessment of Income‑tax the machinery that can be brought into action is one provided by the Income‑tax Act or the Income‑tax Ordinance, as the case may be, and not a civil Court. If a matter is directly or impliedly within the competence of Income‑tax Authorities to decide, the provisions of section 67 of the Income‑tax Act or section 162 of Income‑tax Ordinance of 1979, as the case may be, would be attracted in such a case and a civil Court would be debarred from taking the cognizance of any such matter. I am supported in my view by a case reported as (1960) 2 Taxation (Suppl.)

207. This case was decided by a Bench of Lahore High Court consisting of four Judges. The appellant has cited P L D 1960 S C 113, to substantiate his contention that suit was triable by the civil Court. I have gone through the aforesaid authority and I have no hesitation in holding that the principle enunciated in the aforesaid authority helps the case of the respondents and not that of the appellant. It has been held in the aforesaid authority that following factors would suffice for the ouster of the jurisdiction of the civil Court, namely :‑ (1) that order was made by an authority acting under special statute ; (ii) that such authority was constituted as required under special statute ; (iii) that the person proceeded against, was subject to the jurisdiction of the authority, in view of the grounds on which' he was proceeded against ; and (iv) that the order was made under the relevant statute., It was also opined in the aforesaid case that if the above conditions stand satisfied, the ouster of the civil Court would be complete even if there is some irregularity or omission by such authority. It is evident that keeping into consideration the averments made in the plaint and the presump tion of correctness in favour of the action taken by the defendants. I have no hesitation in holding that aforesaid conditions are satisfied in the instant case and thus, the jurisdiction of civil Court is completely ousted. In the light of what has been stated above, finding no force in this appeal, it is hereby dismissed with costs. Appeal dismissed.