032-NLR-NLR-V-67-D.-J.-RANAWEERA-Appellant-and-THE-COMMISSIONER-OF-INLAND-REVENUE-Respondent.pdf
1965 Present:Tambiah, J., and Sri Skanda Rajah, J.
D. J. RANAWEERA, Appellant, and THE COMMISSIONER OFINLAND REVENUE, Respondent
S. C. 3163 Inty.—D. G. Colombo, 15467T
Estate duty—Recovery of it by seizure and sale of property—District Court acts onlyas collecting court—Application by Commissioner for writ of executionunnecessary—Power of District Court to vacate its own order—Estate D JAyOrdinance ss. 46, 57—Civil Procedure Code ss. 224 to 297, 337.
When a certificate of collection to recover estate duty is sent by theCommissioner of Inland Revenue to a District Court in terms of section 67 ofthe Estate Duty Ordinance, it is incumbent on the District Court to issue awrit of execution to the Fiscal without any previous application by theCommissioner for the issue of such writ. In issuing the writ the District Courtacts as a collecting court, and, as it does not act in a judicial capacity, mayalter or vacate an order made by it.
_A_PPEAL from an order of the District Court, Colombo.
H. W. Jayewardene, Q.G., with P. Navaratnarajah and S. S. Basnayake,for the appellant.
M. Kanagasunderam, Crown Counsel, for the respondent.
Gut. adv. vvlt.
January 22, 1965. Tambiah, J.—
This appeal raises an important question regarding the procedure tobe adopted when a certificate of collection to recover estate duty is sentby the Commissioner of Inland Revenue, hereinafter referred to as theCommissioner, to a District Judge. On 2nd October 1961 a “ certificateof collection” was sent by the Commissioner to the District Judge ofColombo to recover the sum of Rs. 1,014,636-73, as estate duty from theappellant, who was said to be in default. Writs were issued on the samedate to the Fiscals of the Western Province and Matara. On 31stOctober 1961 the proctor for the appellant filed an application movingthat the writs be recalled and that the application made by the Com-missioner be dismissed. He also moved that the writs should be stayedtill 1st February, 1962. On 31st October 1961 the court issued anorder staying the execution of the writs till 1st February 1962 and issuednotice on the Commissioner.
On 1st February 1962 notice was reported to have been served on theCommissioner. The proxy and the objections were to be filed on15.3.1962, but the Commissioner did not file any objections on thi3date. Subsequently, on 26.3.62, the court made an order that the writsissued to the Fiscals of the Western Province and Matara be recalled.It was also ordered that in the event of the Commissioner making afresh application, it should be made with notice to the petitioner.
On 21.4.62 the proctor appearing on behalf of the Commissionerfiled his appointment together with a statement of objections in whichhe prayed that the properties mentioned in the certificate filed undersection 56 of the Estate Duty Ordinance, dated 25th September 1961,be seized and sold. He also moved that the matter be fixed for inquiry.On 14.11.62, the inquiry was held and on 28.11.62 the learned DistrictJudge made order dismissing the petitioner’s application and directedthe Fiscals of the Western Province and Matara to execute the writs.The appellant has appealed from this order.
The counsel for the appellant contended that the learned DistrictJudge had no power to vacate his own order, staying the writs anddirecting that a fresh application should be filed by the Commissioner.The legal basis on which this argument is based is that any order madeby the District Court on such application is a judicial act and that itcannot be vacated by the judge.
On a consideration of section 57 and other relevant sections of theEstate Duty Ordinance, it seems to me that the contention of the counselfor the appellant is not tenable. Section 57 is one of the group of sectionsdealing with the collection of estate duty. Once the Commissionerissues to the appropriate District Court a certificate, which is referredto in the Ordinance as the “Collection Certificate”, containing theparticulars of the duty payable, the name and address of the person bywhom it is payable and the schedule of the property by the sale of whichthe duty may be recovered, it is incumbent on the District Court toissue a writ to the Fiscal or the Deputy Fiscal requiring him to seize andsell the property or such part thereof as he may deem necessary withoutany application by the Commissioner. The provisions of sections 226to 296 of the Civil Procedure Code, mutatis mutandis, are made applicableto such seizure and sale, of any properties under the writ.
It is significant that section 224 of the Civil Procedure Code, whichdeals with the form in which applications for writs should be made,and section 225, which imposes on the Court the duty to satisfy itselfwhether the application is in conformity with the rules, are not madeapplicable. It is also significant that section 337 of the Civil ProcedureCode, which deals with the re-issue of writs, has also not been madeapplicable when the court acts under section 57 of the Estate DutyOrdinance.
It should further be noted that sections 226 to 297 of the Civil ProcedureCode are only made applicable to seizures and sales effected under thewrit issued under the Estate Duty Ordinance. There is no provisionfor an application for the issue of a writ under section 57 of the IncomeTax Ordinance when a certificate of collection is sent by the Commissionerof Inland Revenue to the appropriate District Court. Once the certi-ficate is sent to the appropriate District Court it is imperative on thepart of the District Judge to issue the writ. The District Court acts as acollecting Court. No doubt, it would make appropriate orders underthe relevant provisions of sections 226 to 297 of the Civil Procedure
Code, where it is called upon to adjudicate on claims made by otherswhen properties are seized. Acting under its inherent powers, the Courtcould also make appropriate orders when it becomes necessary to do soin the interests of justice. Thus, for example, if it is alleged that thecertificate is a forgery, the court is not precluded from going into thatmatter. The court could only act under a genuine certificate, and wouldhold an inquiry for the purpose of finding out whether the certificate isgenuine.
There is no provision in the Estate Duty Ordinance to impose conditionson the Commissioner of Inland Revenue regarding any fresh applicationhe should make in order to execute a writ.
It was urged on the authority of Bandahamy v. Senanayake,that in an application for a writ on a “ certificate of collection ”,sent by the Commissioner, notice must be issued to the assessee. InBandahamy v. Senanayake, the Divisional Court, consisting of sevenjudges, was dealing with the question as to whether in an application forthe execution of an award made under the Co-operative SocietiesOrdinance and the rules made thereunder, notice should issue to the personagainst whom the award had been given. Four out of the seven judgestook the view that such a notice is necessary while the others dissentedfrom this view. The majority view was based on the ruling in Jaya-8inghe v. Boragodawatta Go-operative Stores 2. In that case Gratiaen J.said as follows :
“ The rule (the validity of which may be assumed for the purposeof the present appeal) does not lay down the procedure for makingsuch applications, but it is the clear duty of a Court of law whosemachinery as a Court of execution is involved to satisfy itself, beforeallowing writ to issue, that the purported decision or award is primafacie a valid decision or award made by a person duly authorisedunder the Ordinance to determine a dispute which has properlyarisen for the decision of an extra-judicial tribunal under the Ordinance.In that event alone would the Court be justified in holding that thedecision or award is entitled to recognition and capable, under theappropriate rule, of enforcement as if it were a decree of Court. Toachieve that end, a person seeking to enforce an award should berequired to apply either in a regular action or at least by petition andaffidavit (in proceedings by way of summary procedure) setting outfacts which prove that the purported award is prima facie entitled tosuch recognition. The Court should, in the latter event, enter anorder nisi or interlocutory order granting the application, and noticethereof should be served on the opposite party so that he may be givenan opportunity of showing cause against the proposed enforcement ofthe award. Then, and only then, would the Court be justified inpermitting execution proceedings under the Civil Procedure Code. ”
* (1055) 56 N.L.R. 462.
It must be noted that under the Co-operative Societies Ordinance,there is no right of appeal from an award made by an arbitrator. There-fore the rule enunciated by Gratiaen, J. in Jayasinghe's case appears tobe in accordance with the principles of natural justice. In the instantcase, as stated earlier, there is no provision for application of a writand a further opportunity is given to the person who is called upon topay estate duty to appear and be heard before the Commissioner. Suchperson is also given the right of appeal to the Courts against the findingsof the Commissioner.
Under section 57 of the Estate Duty Ordinance on the receipt of thecertificate of collection, the duty is cast on the District Court to issue thewrit. There is no provision for notice to issue to the assessee. It is awell known canon of construction that the Court should only interpretthe law and not introduce words into a statute when the meaning isclear.
The Estate Duty Ordinance makes provision for the speedy recoveryof estate duty due to the State. Under section 46 of the Estate DutyOrdinance, estate duty should be paid notwithstanding any appeal ornotice of objection, unless the Commissioner of Inland Revenue ordersthat payment should be held over to a date specified by him. TheCommissioner is given power to grant time for the payment of estateduty. It will be a serious fetter on the powers of the Commissioner if aCourt should stay the writ when there is no provision of law to do so.
There are ample provisions in the Estate Duty Ordinance for theCommissioner to give relief in various ways to a person who is liableto pay estate duty. Thus a person could make payment in instalments,with the approval of the Commissioner (vide section 46 (3)).
In the instant case, the facts disclosed show that the Commissioner hadgiven the appellant six years to pay the estate duty imposed on himand therefore no prejudice has been caused to the appellant. Thecounsel for the appellant also adumbrated an argument that the court,having recalled the writ, had no power to re-issue it once again. Ifhis contention is correct the Commissioner of Inland Revenue will notbe in a position to recover the duty at all in many cases.
For the reasons stated, I hold that the District Court acts as a collectingcourt and has to act ex mero motu, under section 57 of the Estate DutyOrdinance. In issuing a writ the court does not act judicially and there-fore the principle that a judge cannot alter his own order has noapplication. The appeal is therefore dismissed with costs.
Sm Skanda Rajah, J.—I agree.
Appeal dismissed.