MAARTENSZ AJ.—Commissioner of Income Tax v. de Vos.
1933Present: Maartensz A.J.
COMMISSIONER OF INCOME TAX v. DE VOS.
' 611—P. C. Colombo, 5,512.
Income Tax—Recovery of tax from defaulter—Scope of section 80 (1) of the
Ordinance—Right of appeal—Discretion of Commissioner—Ordinance
No. 2 of 1932, ss. 79 and 80.
The Commissioner of Income Tax is not bound to exhaust the remediesprovided by section 79 (2) and (3) of the Income Tax Ordinance beforehe proceeds to recover any tax from a person in default under section80 (1).
The proviso to the latter section does not preclude the Police Magis-trate from deciding whether the Commissioner had properly exercisedhis discretion in proceeding under the section.
There is no right of appeal to the Supreme Court from an order madeby a Police Magistrate in a proceeding under section 80 (1).
p^PPEAL from an order made by the Police Magistrate of Colombo…
H. V. Perera, for appellant
Wendt, C.C., for the respondent.
Cur. adv. vu It.
November 29,1933. Maartensz A.J.—
This is an appeal by an assessee against whom an order has been madein a proceeding under section 80 (1) of the Income Tax Ordinance, 1932.
The proceeding is not of a criminal nature and the provisions of theCriminal Procedure Code regarding appeals do not apply to the order madeagainst the appellant. The Ordinance makes no provision for appealsfrom orders made under section 80, and I do not think the appellant hasa right of appeal; but, as the objections to the order have been fullydiscussed, I shall treat the appeal as an application for revision.
Section 80 is one of a series of sections enacted for the purpose ofrecovering income tax from a person in default.
350 MAARTENSZ A.J.—Commissioner of Income Tax v. de Vos.
Section 79 (2) provides for the recovery of the tax by seizure and saleof the movable property of the defaulter. Sub-section (3) provides for therecovery of the tax by seizure and sale of the movable and immovableproperty of the defaulter on a writ of execution issued by a District Courthaving jurisdiction in any district where the defaulter resides, or in whichany property, movable or immovable, owned by the defaulter is situated.
It was conceded that these remedies were alternative to each other.Section 80 (1) enacts:—
Where the Commissioner is of opinion in any case that recoveryof tax in default by seizure and sale is impracticable or inexpedient,or where the full amount of the tax has not been recovered by seizureand sale, he may issue a certificate containing particulars of such taxand the name and last known place of business or residence of thedefaulter to a Police Magistrate having jurisdiction in the division inwhich such place is situate. The Police Magistrate shall thereuponsummon such defaulter before him to show cause why further proceed-ings for the recovery of the tax should not be taken against him, andin default of sufficient cause being shown the tax in default shall bedeemed to be a fine imposed by a sentence of the Magistrate on suchdefaulter for an offence punishable with fine only or not punishable-with imprisonment, and the provisions of sub-section (1) of section 312(except paragraphs (a), (c) and (h) thereof) of the Criminal ProcedureCode, 1898, relating to default of payment of a fine imposed for suchan offence shall thereupon apply, and the Magistrate may make anydirection, which, by the provisions of that sub-section, he could havemade at the time of imposing such sentence ”.
It is clear from the evidence in the case that the Commissioner ofIncome Tax moved the Police Court under the provisions of section 80 (1)without taking either of the steps provided by section 79 for the recoveryof the tax.
The main contention of the appellant was that the Commissioner ofIncome Tax was not entitled to proceed under section 80 (1) until he hadascertained that proceeding under section 79 had failed or were likelyto fail.
In support of the contention it was pointed out (a) that a proceedingunder section 80 (1) was of a more drastic character than the proceedingsprovided for by section 79, (b) that section 80 (1) provided for the defaultershowing cause against further proceedings being taken against him and itwas urged that the proceedings referred to were the proceedings providedfor by section 79, (c) that the phraseology of section 79 (3) differed fromthe phraseology of section 80 (1), which indicates that section 80 (1)should be resorted to after steps had been taken under section 79. I amunable to accept this contention. As regards the first objection the merefact that a proceeding under one section is of a more drastic characterthan the proceedings provided for by another section does not limit thediscretion of the person entitled to put the sections into operation. Asregards the second, the proceedings mentioned in section 80 (1) do not,in my opinion, refer to proceedings under section 79 but to proceedingsunder the section itself. The defaulter can show cause against furtherproceedings by showing that the place where he resided or carried on
MAARTENSZ A.J.—Commissioner of Income Tax v. de Vos.351
business was outside the jurisdiction of the Magistrate, or that he wasentitled to a stay of proceedings for the reasons set out in sub-section (2)of the section.
As regards the change in phraseology, I do not think it has the effectcontended for by the appellant. Section 79 (3) provides that where anytax is in default and the Commissioner is of opinion that recovery by themeans provided for in sub-section (2) is impracticable or expedient,he may issue a certificate to a District Court having jurisdiction . . .“for the purpose of having the movable or immovable property seizedand sold by the Fiscal”. At that stage the only other remedy was byseizure and sale of the movable property. It was necessary, however,in section 80 to refer to both remedies, and, accordingly, it provides that“ where the Commissioner is of opinion in any case that recovery of taxin default by seizure and sale is impracticable or inexpedient or where thefull amount of the tax has not been recovered by seizure and sale, he mayissue a certificate ”.
The only difference is that in section 79 (3) movable property is specified,while in section 80 (1) the nature of the property is not specified. There. is nothing in the difference of phraseology to indicate that the proceedingsprovided for by section 79, sub-sections (2) and (3) must be resorted tobefore the Commissioner takes action under section 80 (1).
The Commissioner is, in my opinion, by the terms of the sections, vestedwith absolute discretion as to what steps should be taken to recover thetax from the defaulter. He may even proceed under both section 79 andsection 80 simultaneously; for section 83 enacts that “where the Com-missioner of Income Tax is of opinion that application of any of theprovisions of this Chapter has failed or is likely to fail to secure paymentof the whole of the tax due from any person, it shall be lawful for him toproceed to recover, any sum remaining unpaid by any other means ofrecovery provided in this chapter, save where an order has been madeby a Police Magistrate under section 80 and carried into effect ”.
. I am, therefore, unable to agree with the learned Magistrate’s opinionthat the Commissioner should first proceed under section 79 (2) and (3)of the Ordinance and that he can only proceed under section 80 (1) if suchsteps have failed.
I am also unable to agree with the learned Magistrate that the provisoto section 80 (1) precluded him from deciding whether the Commissionerhad properly exercised his discretion. It is true the certificate statesthat the Commissioner is of opinion that “recovery of the said tax indefault by seizure and sale is inexpedient”, but that is not a particularwhich the Commissioner is required to state by section 80 (1), and is,therefore, not a statement to which the proviso, which enacts as follows: —
“Provided that nothing in this section shall authorize or require theMagistrate in any proceeding thereunder to consider, examine, ordecide the correctness of any statement in the certificate of the Com-missioner ”, applies.
The appeal is dismissed and the application for revision of the orderrefused.
COMMISSIONER OF INCOME TAX v. DE VOS