BANARASI DEVI v. INCOME-TAX OFFICER, CALCUTTA

To the present case the general rule of construction of fiscal Acts would apply, and not the e:tception engrafted on that rule; for, s. 4 of the Amending Act cannot be described as a provision laying down the machinery for the calculation of tax. In substance it enables the Income-tax Officer to re assess a peraon's income which has escaped assessment, though the time within which he, could have so assessed had expired It resusci under the Act before the amendment of 1959. tates barred claims. Therefore, the same stringent rules of construction appropriate to a charging section ·Shall also apply to such a provi6ion. Before the Amending Act of 1959 was passed, lncome tax Officers issued notices before April l, 1956, and also after that date for reopening assessments made beyond !! years from the issue of such notices. The validity of such notices was questioned. To save the validity of such notices the Amending Act was passed. This Court in S. C. Prashar v. Vasantsen Dwarkadas(') held, on a construction of s. 4 of the Amending Act. that it operated and validated the notices issued under s. 34(1) (a) of the Act, as amended in 1948, even earlier than April l, 1956. In other words, notices issued under s. 34(1) (a) of the Act before or after April l, 1956, could not be challenged on the ground that they were issued beyond the time limit of 8 years from the respective assess ment years prescribed by the 1948 amendment Act. Section ( ') (1899] 2. Q.B. 158, 164. (') [1964] 1 S.C.R. 29. 7 S.C.R. SUPREME COURT REPORTS 545 1964 4 of the Amending Act of 1959, therefore, was enacted for the sole purpose of saving the validity of such notices in Banamsi D<oi respect of all escaped incomes relating to any year commenc- ing from the year ending on March 31, 1941, though theyln'°"O.%':uta Offer.er, were issued beyond the prescribed time. If the construction sought to be placed by the learned counsel for the appellants Sll1Jba Rao, J. be accepted, it would defeat the purpose of the amendment in some cases. If the words were clear and exclude the class of cases where the notices we~e sent before 8 years from the date of assessment, but served thereafter, this Court has to give them the said meaning. T. This bring us to the question of ~onstruction of the pro visions of s. 4 of the Amending Act: The crucial word in the said section is "i&5ued". The section says that though a notice was issued beyond the time within" which such notice · should have been issued, its validity could not be questioned. If the word 'issued" means "sent", we find that there is no prov1>ion in the Act prescribing a time limit for sending a notice, for, under s. 34( !)(a) of the Act a notice could be served only within 8 years from the relevant assessment year .. It does not provide any period for sending of the notice. Obviously, therefore, the expression "issued" is not used in the narrow sense of "sent". Further, the said expression has received, before the amendment, a clear judicial interpreta tion. Under s. 34(l)(a) of the Act the Income-tax Officer may in cases falling under cl. (a) at any time within 8 years serve on the assessee a notice. The proviso to that section says that where the notice under s. 34(l)(a) is within time therein limited, the assessment or re-assessment to be made in pur suance of such notice may be made before the expiry of one year from the date of the service of the notice even if such period exceeds the period of 8 years or 4 years, as the case may be. In Commissioner of Income-tax, Bombay South v. D. V. Ghurve('), it was argued that a notice sent before 8 years though served beyond 8 years was in compliance with the section; and in support of that argument the expression "issued" in the proviso was relied upon to limit the meaning of the word "served" in the substantive part of the section. Rejecting that argument, Chagla, C. J., speaking for the Court, observed: "In other words, the attempt is to equate the expres sion "served" used in section 34 with the expres sion "issued" used in the proviso to sub-section (3). Now we must frankly confess that we find it difficult to understand why the Legislature has used in the proviso the expression "where a notice under sub-section (!) has been issued within the (') (1957) 31 I.T.R. 683, 686. LP(ll)ISCJ-18 546 SUPREME COURT REPORTS [1964] I964 Banarasi Devi v. l11<om<.taz Ojjker, Oakutta Bubba Rao J. In sub-section (1) no time time therein limited". is limited for the issue of the notice: time i;; only limited for the service of the notice; and there fore it is more appropriate that the expression "issued" used in the proviso to sub-section (3) should be equated with the expression "served" rather than that the expression "served" used in sub-section (1) should be equated with the expres sion "issued" used iu the proviso to sub-section (3)." . ' This decision equated the expression "issued" with expres sion "served". The Allahabad High Court in Sri Niwas v. Income-tax Officer(') has also interpreted the word "issued" to mean "served". The rele.vant rule of construction is clearly stated by Viscount Buckmaster in Barras v. Aberdeen Steam Trawling and Fishing Co. Ltd.(') thus: "It has long been a well established principle to be applied in the consideration of Act of Parliament that where a word of doubtful meaning has re ceived a clear judicial interpretation the subse quent statute which incorporates the same word or the same phrase in a similar cQntext, must be corntrued so that the word or phrase is inter preted according to the meaning that has pre viously assigned to it." Section 4 of the Amending Act was enacted for saving the validity of notices issued under s. 34 (I) of the Act. When that section used a word interpreted by courts in the context of such notices, it would be reasonable to assume that the expression was designedly used in the same sense. That apart, the expressions "issued" · and "served" are used as interchangeable terms both in dictionaries and in other sta tutes. The dictionary meaning of the word "issue" is "the act of sending out, put into circulation, delivery with autho rity or delivery". Section 27 of the General Clauses Act (Act X of 1897) reads th us : "Where any Central Act or Regulation made after the commencement of this Act authorizes or re quires any document to be served by post, whether the expression "serve" or either of the expression, "give" or "send" or any other expres sion is used, then, unless a different intention ap pears, the service shall be deemed to be effected by properly addressing, prepaying and posting (') (1956) 30 I.T.R. 381. (') [1933) A.C. 402, 411. 1 S.C.R. SUPREME COURT REPORTS 547 by registered post, a letter containing the docu- ment, and unless the contrary is proved, to have B•narasi Devi been effected at the time at which the letter would be delivered in the ordinary course of Income 0 post." v. :_'f" Officer• 1964 iMC'Utfa Subba Rao, .J. It would be seen from this provL>ion that Parliament used the words "serve", "give" and "send" as interchangeable words. So too, in ss. 553, 554 and 555 of the Calcutta Municipal Act, 1951, the two expressions "issued to" or "served upon" are used as equivalent expresiions. In the legislative practice of our country the said two expressions are sometimes used to convey the same idea .. In other words, the expression "issued" is used in a limited as well as in a wider sense. We must, the expression "issued" in s. 4 of the Amending Act that meaning which carries out the intention of the Legislature in preference to that which defeats it. By doing so we will not be departing from the accepted meaning of the expression, but only giving it one of its meanings accepted, which fits into the context or setting in which it appears. therefore, give With this background let us give a closer look to the provisions of s. 4 of the Amending Act. The object of the section is to save the validity of a notice issued beyond the prescribed time. Though the time within which such notice should have been issued under s. 34(1) of the Act, as it stood before its amendment by s. 18 of the Finance Act of 1956, had expired, the said notice would be valid. Under s. 34(1) of the Act, as we have already pointed out, the time pres cribed was only for service of the notice. As the notice men tioned in s. 4 of the Amending Act is linked with the time prescribed under the Act, the section becomes unworkable if the narrow meaning is given to the exprer, sion "issued". On the other hand, if we give wider meaning to the word, the section would be consistent with the provisions' of s. 34(1) of the Act. Moreover, . the narrow meaning would introduce anomalies in the section: while the notice, assessment or re-assessment were saved, the intermediate stage of service would be avoided. To put it in other words, if the proceed ings were only at the stage of issue of notice, the notice could not be questioned, but if it was served, it could be questioned; though it was served beyond time, if the assessment was ·completed, its validity could not be questioned. The result would be that the validity of an assessment proceeding would depend upon the stage at which the assessee seeks to question it. That could not have been the intention of the Legi>la ture. All these anomalies would disappear if the expression was given the wider meaning. L!'(D)I<CI-!S{•) I 548 SUPREME COURT REPORTS [1964] - 1964 B<111orari DtfJi ... To summarize: the clear intention of the Legislature is to save the validity of the notice as well as the assessment from an attack on the ground that the notice was given be- J~ OJ!iar, yond the prescribed period. That intention would be effec- tuated if the wider meaning is given to the expression S.bbo Boo, J. "issued" takes in the entire process of sending the notice as well as the service thereof. The said word used in s. 34(1) of the Act itself was interpreted by courts to mean "served". The limited meaning, namely. "sent" will exclude from the operation of the provision a class of cases and introduce an<> In the circumstances, by interpretation, we accept malies. the wider meaning the word "issued" bears. In this view, though the notices were served beyond the prescribed time, they were served under s. 4 of the Amending Act. No other point was raised before us. Iii the result, the appeals fail and are dismissed with · costs. There will be one hearing fee. Appeals dismissed.