83

[1984] 16 Taxman 341 (Gauhati)

HIGH COURT OF GAUHATI
A. Gupta Trust Estate
v.
Commissioner of Wealth-tax
K. LAHIRI AND T.C. DAS, JJ.
CIVIL MISC. CASE NO. 5 OF 1982
JUNE 2, 1983

Section 27(3) of the wealth-tax act, 1957—Reference—Whether high court can

extend period of limitation specified in section 27(3), if there were sufficient
reasons for delay, by invoking provisions of sections 3 to 24 of limitation act—held,
yes—assessee explained that since its counsel was under mistaken impression that
time limit for filing reference application was six months, it was not filed within
time—application was, however, filed by assessee after expiry of six months—
whether delay would merit condonation—held, no
Facts
The Tribunal refused to state the case of the assessee under section 27(1) on the
ground that no question of law arose out of the appellate orders. The assessee
filed an application to the High Court under section 27(3) for requiring the
Tribunal to state the case but the application was filed after the expiry of six
months from the date of service on the assessee of the notice of refusal by the
Tribunal although the period of limitation was 90 days. The delay was explained by
the assessee as due to the fact that its counsel was under the mistaken thought
that the reference application was to be made under section 256(2) of the Income-
tax Act where the period of limitation was six months from the date of the order.
The assessee also filed an application under section 5 of the Limitation Act, 1963,
for extension of the prescribed period of limitation.
On reference:
Held
Section 29(2) of the Limitation Act, inter alia, lays down that where any special or
local law prescribes for any application a period of limitation different from the
period prescribed by the schedule to the Limitation Act, section 3 of the Limitation
Act shall apply as if such period were the period prescribed by the Limitation Act.
Section 3 is enabling as well as disabling provision which inter alia provides that
subject to the provisions contained in sections 4 to 24 of the Limitation Act all
applications made after the prescribed period 'shall be dismissed'. The Court is,
therefore, bound to dismiss an application filed beyond the period of limitation,
subject to the provisions of sections 4 to 24. There may be cases where the
provisions of sections 4 to 24 are not applicable but the provisions of section 3 are
applicable. In such a case the Court is powerless to extend the period of limitation
and must dismiss the same in the absence of special provisions in the said Act
empowering the Court to extend the period of limitation. Section 27(3) of the
Wealth-tax Act prescribes a period of limitation but does not expressly empowers
the High Court to dismiss an application filed beyond the period of limitation.
However, if the provisions of section 3 of the Limitation Act are applicable in
proceedings under section 27(3) of the Wealth-tax Act the High Court must
dismiss such an application filed after the period of limitation, unless the
provisions of section 5 of the Limitation Act are applicable to such proceedings.
For the application of section 3 of the Limitation Act, three conditions are to be
satisfied, viz. (i ) the application under section 27(3) should satisfy the test of
being an 'application' under section 29(2) of the Limitation Act; (ii) section 27(3)
must prescribe a period of limitation different from that in the Limitation Act; and
(iii) the Wealth-tax Act should be a special law.
The term 'application' ordinarily means the act of making a prayer or request for
something. Further, in view of section 2(b) of the Limitation Act, applications of all
sorts, whether governed by the general law and whether original or otherwise
would be governed by the provisions of the Limitation Act provided the other
conditions are fulfilled. Accordingly, an application under section 27(3) of the
Wealth-tax Act is an application contemplated under the Limitation Act.
The term 'different' means dissimilar, not identical, not alike, distinct, separate,
etc. At the first blush it appears that word 'different' means that the provisions
contained in the Limitation Act must prescribe a period of limitation and the
special or local law must be 'different' from the said prescribed period. However,
as held by this Court in State of Assam v. Naresh Chandra AIR 1983 Gauhati 84,
the period of limitation may be different under different conditions or
circumstances. It may be different if the special or local law modifies or alters the
period of limitation prescribed by the Limitation Act. It has also been held that if
the Limitation Act omits to lay down any period of limitation and the special or
local law provides a period of limitation, then to that extent the special law is
'different' from the Limitation Act. Where a difference arises between the special
law and the Limitation Act in respect of a period of limitation, by the omission in
the Limitation Act to provide a prescribed period of limitation in respect of a
particular, proceedings, it must be held that the special law has prescribed a
period of limitation different from the period prescribed in the Limitation Act,
within the meaning of section 29(2) of the Limitation Act.
In view of the above legal position, section 27(3) of the Wealth-tax Act can be said
to prescribe a period of limitation which is different from limitation set by the
Limitation Act.
In view of the above, the Court has jurisdiction to dismiss the application under
section 27(3) there is no sufficient reasons for condoning the delay.
A bare perusal of section 27(3) clearly shows that sections 4 to 24 of the
Limitation Act have not been excluded by the Wealth-tax Act. The provisions of the
Wealth-tax Act provide no compulsive words that the application must be filed
within 90 days otherwise it will be dismissed, i.e., it does not provide the
consequence of not presenting an application with the period.
Therefore, the provisions of section 3 as well as sections 4 to 24 of the Limitation
Act are applicable in the proceedings under section 27(3) of the Wealth-tax Act
and the High Court can extend the period of limitation under section 5 of the
Limitation Act provided the applicant can satisfy that he had sufficient cause for
not making application within the prescribed period of limitation.
However, the delay could not, on merits, be condoned in this case because, even
granting that the learned counsel advised the assessee to prefer the application
within six months from the date of the order of refusal, the application was filed
long after the expiry of this six month period.
Case review
State of Assam v. Naresh Chandra Das AIR 1983 Gau. 24, Canara Bank Ltd. v.
Warden Insurance Co. Ltd. AIR 1953 Bom. 35, Kaushalya Rani v. Gopal Singh AIR
1946 SC 260 and Vidyacharan Shukla v. Khubchand BagheI AIR 1964 SC 1099
followed.
Cases referred to
State of Assam v. Naresh Chandra Das AIR 1983 Gau. 24, Canara Bank Ltd. v.
Warden Insurance Co. Ltd. AIR 1953 Bom. 35, Kaushalya Rani v. Gopal Singh AIR
1946 SC 260 and Vidyacharan Shukla v. Khubchand BagheI AIR 1964 SC 1099 and
Hukumdev Narain Yadav v. Lalit Narain Mishra AIR 1974 SC 480.
D.N. Baruah and S.K. Barkakati for the Applicant.
J.P. Bhattacharjee and B.P. Saraf, for the Respondent.
JUDGMENT
LAHIRI, J.—Whether the provisions of section 5 of the Limitation Act, 1963, are
applicable in proceedings under section 27(3) of the Wealth-tax Act, 1957 ('the
Act')? This absorbing and intriguing question has come up for our consideration in
the proceedings which are off-shoots of Civil Rules Nos. 12(M), 36(M) and 37(M)
of 1979.
2. The Tribunal refused to state the cases of the assessees under section 27(1), on
the ground that no question of law arose out of the appellate orders. Admittedly,
beyond 90 days from the date on which the assessees were served with the notices
of refusal, they filed applications to this Court under section 27(3) for requiring
the Tribunal to state the cases to the High Court. In other words, the assessees
have made applications under section 27(3) of the Act beyond the prescribed
period of 90 days and also have filed applications under section 5 of the limitation
Act for extension of the prescribed period claiming that they had sufficient cause
for not preferring the applications within 90 days.
3. Before we delve into the merits of the applications, we are to ascertain whether
this Court has jurisdiction to extend the period of limitation prescribed by section
27(3) of the Act, in exercise of powers under section 5 of the Limitation Act.
Section 5 empowers the Court to entertain any application, other than one under
Order XXI of the Code of Civil Procedure, 1908, even after the prescribed period,
if the applicant satisfies the Court that he had sufficient cause for not making the
application within the prescribed period.
4. Let us examine whether the provisions of sections 3 and 5 of the Limitation Act
was applicable in proceedings under section 27(3) of the Act. To determine the
question, we must turn to section 29(2) of the Limitation Act. Section 29(2), inter
alia, lays down that where any special or local law prescribes for any application a
period of limitation different from the period prescribed by the Schedule to the
Limitation Act, section 3 of the Limitation Act shall apply as if such period were
the period prescribed by the Limitation Act. This appears in the first part of
section 29(2). If the period of the limitation prescribed in a special or local law is
different from the period prescribed by the Limitation Act, the provisions of
section 3 apply. Section 3 is enabling as well as disabling provisions which, inter
alia, pro vides that subject to the provisions contained in sections 4 to 24 of the
Limitation Act, all applications made after the prescribed period 'shall be
dismissed' although limitation has not been set up as a defence. The Court is,
therefore, bound to dismiss an application filed beyond the period of limitation,
subject to the provisions of sections 4 to 24. There may be cases where the
provisions of sections 4 to 24 are not applicable but the provisions of section 3 are
applicable. In such a case, the Court is powerless to extend the period of limitation
and must dismiss the same in the absence of special provisions in the said Act
empowering the Court to extend the period of limitation. Section 27(3) prescribes
a period of limitation but does not expressly empower the High Court to dismiss
an application filed beyond the period of limitation. However, if the provisions of
section 3 of the Limitation Act are applicable in proceedings under section 27(3) of
the Act, the High Court must dismiss such an application filed after the period of
limitation unless the provisions of section 5 of the Limitation Act are applicable to
such proceedings. It is the common case of the parties that the Act is a special law
and that it prescribes a period of limitation for filing application. However, these
conditions are not sufficient to attract sections 3 and 29(2) of the Limitation Act,
because the limitation prescribed in the special Act must be different from the
period prescribed by the Limitation Act. In this regard the provisions of section
29(2) of the Limitation Act, 1908, for short ('the old Act'), were practically similar.
The Limitation Act, 1963 has been enacted to consolidate and amend the law for
the limitation of suits and other proceedings and for purposes connected
therewith. It will be seen that the provisions of section 3 are controlled by and/or
subject to the provisions of sections 4 to 24 and the section must be read,
interpreted and construed, accordingly. Section 3, therefore, is not an independent
section because its operation and effect are controlled by sections 4 to 24. It
appears that if a special or local law expressly excludes the operation of sections 4
to 24, the question of applicability of those sections need not be considered while
acting under section 3. To decide the question whether the provisions of sections 3
and 5 of the Limitation Act are applicable in proceedings under section 27(3) of
the Act, it is essential to appraise the provisions of section 29(2) of the Limitation
Act, 1963, which we extract here in below:
"(2) Where any special or local law prescribes for any suit, appeal or
application a period of limitating different from the period prescribed by the
schedule, the provisions of section 3 shall apply as if such period were the
period prescribed by the schedule and for the purpose of determining any
period of limitation prescribed for any suit, appeal or application by any special
or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply
only insofar as, and to the extent to which, they are not expressly excluded by
such special or local law." [Emphasis supplied]
5. We are concerned only with 'application' and not with the suits or appeal. Let
us, therefore, consider whether an application under section 27(3) is 'an
application' contemplated under the Limitation Act. Section 27(3) provides that a
party may, within 90 days from the date of which he is served with the notice of
refusal or rejection, 'apply to the High Court' requiring the Tribunal to state the
case to the High Court. Therefore, to obtain the necessary relief under section
27(3), a party must make an application which must contain a prayer to the High
Court. The term 'application' ordinarily means the act of making a prayer or
request for something. In that sense, therefore, an application or prayer of a party
to the High Court under section 27(3) of the Act is an application within the
meaning of section 29(2) of the Limitation Act. We find ample support of the view
that we have taken from the Limitation Act itself. The word 'application' has been
defined and given a wide meaning. Section 2(b) of the Limitation Act defines the
word 'application' as follows:
"(b) 'application' includes a petition;"
The word has been given a wide meaning and framed to include all petitions
original or otherwise. The definition has been introduced for the first time in
the new Act. The word 'application' was not there in the old Act nor was there
any provision which could govern petitions under the special or local law. We
are of the opinion that by the introduction of the definition in section 2(b) of
the Limitation Act, the recommendation of the Law Commission's report, the
object of which was to provide a period of limitation for original petition and
applications under special or local law, has been accepted by the Parliament.
Turning to the term word 'applicant' as contained in section 2(a) of the
Limitation Act, we find that the present definition is much more wider and
more comprehensive than the one defined in the old Act. In view of the
changes in the word 'applicant' in section 2(a) as well as the introduction of
the new word 'application' in section 2(b) , it appears very clear that the
legislative intent is to provide a period of limitation for all applications, original
or otherwise, including application under special law. Therefore, applications
of all sorts, whether governed by the general law, special law or local law and
whether original or otherwise would be governed by the provisions of the
Limitation Act, provided the other conditions are fulfilled. Accordingly, we hold
that the application under section 27(3) of the Act is an application
contemplated under the Limitation Act.
6. The next question is whether the Wealth-tax Act is a special law or not. It has
been conceded at the bar that the Wealth-tax Act is a special law. The concession
has strong force behind it. There is no doubt that this is a law, that is, a body of
rules laid down for determining legal rights and legal obligations which are
recognised by the Courts. Unfortunately, the expression 'special law' has not been
defined either in the Limitation Act or in the General Clauses Act. The divisions of
laws into general, special or personal is a classification based on the extent of the
operation of such laws. Ordinarily, a general law applies to the whole community.
General law consists of the general or ordinary law of the land whereas, special or
personal law consists of certain other bodies of legal rules which are so special
and exceptional in their natural sources or application that it may be convenient to
treat them as standing out of the general or ordinary law, as derogating from or
supplementing them in special cases but not forming a constituent part of it.
'Special law' means law which is not applicable generally but applies to a
particular or specified subject or class of subject, vide, Salmond on Jurisprudence,
page 88, 11th edn. The Act has all the characteristics of 'a special law'. The Act is
one of the laws dealing with direct taxes in India. It has charging provisions, it
deals with the questions of assessment, determination of liability to assessment,
settlement of cases, appeal and revision before the WTOs, constituted Appellate
Commissioner and Tribunal and deal with payment and recovery of wealth-tax,
refund, etc. It is, thus, not a general law and has all the attributes of a special law.
Accordingly, we hold that the Act is 'a special law'.
7. However, another essential element is necessary for applicability of sections 3
to 24 of the Limitation Act. Whether section 27(3) provides a period of limitation
different from that contained in the Limitation Act. The precise question is
whether section 27(3) has prescribed a period of limitation 'different' from the
Limitation Act. The term 'different' means dissimilar, not identical, not alike,
distinct separate, etc. At the first blush, it appears that word 'different' means that
the provisions contained in the Limitation Act must prescribe a period of limitation
and the special or local law must be 'different' from the said prescribed period. We
have just resolved the question in State of Assam v. Naresh Chandra Das AIR 1983
Gauhati 24, where, it has been held that the period of limitation may be different
under different conditions or circumstances. It may be different if the special or
local law modifies or alters the period of limitation prescribed by the Limitation
Act. It has also been held that if the Limitation Act omits to lay down any period of
limitation and the special or local law provides a period of limitation, then to that
extent the special law is 'different' from the Limitation Act. Where a difference
arises between the special law and the Limitation Act in respect of a period of
limitation, by the omission in the Limitation Act to provide a prescribed period of
limitation in respect of a particular proceeding, it must be held that the special
law has prescribed a period of limitation different from the period prescribed in
the Limitation Act, within the meaning of section 29(2) of the Limitation Act. We
find that the view we have taken in the case of Naresh Chandra Das (supra) finds
support from the Canada Bank Ltd. v. Warden Insurance Co. Ltd. AIR 1935 Bom.
35. While explaining the meaning of the expressions 'period of limitation different
from' as contained in section 29(2) of the Limitation Act, 1908, Chagla, CJ. and
Gajendragadkar, J. observed as follows:
". . . the period of limitation may be different under two different
circumstances. It may be different if it modifies or alters a period of limitation
fixed by the first schedule to the Limitation Act. It may also be different in the
sense that it departs from the period of limitation fixed for various appeals
under the Limitation Act. If the first schedule to the Limitation Act omits laying
down any period of limitation for a particular appeal and the special law
provides a period of limitation, then to that extent the special law is different
from the Limitation Act. . . ." (p. 36)
In Kaushalya Rani v. Gopal Singh AIR 1946 SC 260, the Supreme Court has ruled
that when there is no limitation prescribed by the Limitation Act for an appeal,
application, etc., but a special law provides such limitation, there arises a
difference between the Limitation Act and the special law in respect of limitation
affecting such appeal, application, etc. In Vidyacharan Shukla v. Khubchand
Baghel AIR 1964 SC 1099, their Lordships have laid down that section 29(2)
would apply even to a case where a difference between a special law and the
Limitation Act arises by omission to provide for a period of limitation in respect of
a particular proceeding in the Limitation Act.
8. For the foregoing reasons, we conclude that an application under section 27(3)
of the Act is an application as contemplated in the Limitation Act. Section 27(3)
prescribes a period of limitation which is different from limitation set by the
Limitation Act, as such section 3 of the Limitation Act is applicable in the
proceedings under section 27(3) of the Act. We have, there fore, jurisdiction to
dismiss this application if we do not find sufficient reasons for condoning the
delay.
9. Now, the only question that remains for our consideration is the applicability of
sections 4 to 24 of the Limitation Act in proceedings under section 27(3) of the
Act. Section 27 has not expressly excluded the application of sections 4 to 24. We
extract the provision of sections 27(1), (2) and (3) of the Act (as amended):
"27. Reference to High Court.—(1) The assessee or the Commissioner may,
within sixty days of the date upon which he is served with notice of an order
under section 24 or section 26, by application in the prescribed form,
accompanied where the application is made by the assessee, by a fee of two
hundred rupees require the Appellate Tribunal to refer to the High Court any
question of law arising out of such order and, subject to other provisions
contained in this section, the Appellate Tribunal shall, within one hundred and
twenty days of the receipt of such application, draw up a statement of the case
and refer it to the High Court.
(2) The Appellate Tribunal may, if it is satisfied that the applicant was
prevented by sufficient cause from presenting the application within the period
specified in sub-section (1), allow it to be presented within a further period not
exceeding thirty days.
(3) If, on an application made under sub section (1), the Appellate Tribunal,—
(a)refuses to state a case on the ground that no question of law arises; or
(b)rejects it on the ground that it is time barred, the applicant may, within 90
days from the date on which he is served with a notice of refusal or
rejection, as the case may be, apply to the High Court, and the High
Court may, if it is not satisfied with the correctness of the decision of the
Appellate Tribunal, require the Appellate Tribunal to state the case to
the High Court, and on receipt of such requisition, the Appellate
Tribunal shall state the case:"
We have alluded that the object of the Limitation Act is to bring all applications,
including those under special Jaws within the fold of the Limitation Act. A hare
perusal of section 27(3) clearly shows that sections 4 to 24 of the Limitation Act
have not been excluded by the Act. The provisions of the Wealth-tax Act provide no
compulsive words that the application must be filed within 90 days or otherwise it
will be dismissed, i.e., it does not provide the consequence of not presenting an
application within the period. Therefore, we find no mandatory or compulsive
language. It does not provide that no application shall be entertained by the High
Court after the expiry of 90 days.
10 Even if we assume that the language of section 27(3) were compulsive in the
sense that it has prescribed that no application shall be entertained by the High
Court after the expiry of 90 days, it does not, by itself, displace the applicability of
section 5 of the Limitation Act in proceedings under section 27(3). Whenever
limitation is prescribed, we find some such compulsive or mandatory language,
and, such peremptory language by itself is not sufficient to displace the
applicability of section 5, as it is necessary for the Parliament to use express
words to take away the rights under sections 4 to 24 of the Limitation Act by
necessary intendment. The act or intention of the Legislature must be clearly
manifested in the provisions itself. We do not find any express word to displace the
applicability of section 5 in section 27(3) nor do we find any indication wherefrom
we can safely draw the conclusion that the applicability of the section has been
taken away by the Parliament.
11. It has been urged that section 27(2) empowers the Appellate Tribunal to
extend the period of limitation but sub-section (3) is silent, this is an indication of
non-applicability of sections 4 to 24. However, the contention has no force. The
Tribunal is not a Court and section 29(2) is not applicable in proceedings before it.
Therefore, the Tribunal had to be granted power to extend the period of limitation
by express provisions of law. That is why section 27(2) expressly empowers the
Tribunal to extend the period of limitation. In the absence of such a power the
Tribunal could not have extended the period of limitation under the Limitation Act,
whereas a Court can extend the period of limitation under section 29(2) read with
section 5. As such, the contention is not acceptable.
12. It has been urged that the Act is a complete and self-contained code which
does not admit the introduction of the provisions of principles of law contained in
the Limitation Act. To answer the question, we are to consider whether and to
what extent the nature of the special provisions or the scheme of the special law
excluded the provisions of sections 3 to 24 of the Limitation Act. The Act does not
contain any scheme or provisions expressly empowering the Court even to dismiss
an application under section 27(3). The High Court is to take resort to section 3 of
the Limitation Act to dismiss an application under section 27(3) of the Wealth-tax
Act. The Act does admit the introduction of the provisions of sections 3 to 24 of the
Limitation Act. Apart from prescribing a period of limitation, the Act does not
prescribe anything which are dealt in sections 3 to 24. Therefore, it is hardly
possible to hold that the Act has impliedly excluded the provisions of sections 3 to
24 of the Limitation Act.
13. However, the legislative history of section 27 is somewhat intriguing. Section
27(9) originally provided that section 5 of the Limitation Act would apply but the
same has been omitted after the deletion of sub-section (9). Therefore, it is urged
that by the deletion of the provision the benefit of section 5 of the Limitation Act
has been withdrawn. It has been urged that the intention of the Parliament is clear
that it does not desire to allow the High Court to extend the period of limitation
under section 27(3). We extract the provisions of section 27(9) (since deleted):
"(9) Section 5 of the Indian Limitation Act, 1908, shall apply to an application
to the High Court under this section."
It will be seen that sub-section (9) of section 27 of the Act was introduced when
the Indian Limitation Act, 1908 was in the field. The sub-section had to be brought
expressly in the statute book to enable the High Court to extend the period of
limitation in view of the provisions contained in section 29(2) of the old Limitation
Act which provided that sections 4, 9 to 18 and 22 would apply only insofar as and
to the extent to which they were not expressly excluded by special or local law and
the remaining provisions of the old Limitation Act would not apply. However, the
language of section 29(2) of the Limitation Act, 1963, is different. The Limitation
Act, 1963, has come into force from 1-1-1964 and from that date the provisions
contained in sections 4 to 24 of the Limitation Act apply to all special or local laws,
if not expressly excluded by such laws. If sections 4 to 24 are not excluded
expressly by special or local laws, sections 4 to 24 are squarely applicable. This is
the position obtainable from 1-1-1964. Section 27 of the Act was amended in 1964,
which made certain amendments in sub-sections (1) and (2), inserted sub-section
3(A), added a few words in subsections 4, 5 and 6, sub-section (7) has been
substituted and sub-sections 8 and 9 have been deleted. The Amendment Act 46 of
1964 came into effect from 1-4-1965. Sub-section (9) became otiose so it was
deleted. The Legislature desired to apply sections 4 to 24 of the Limitation Act,
not merely the provisions of section 5 and, hence, sub-section (9) of section 27 of
the Act was omitted. Before the Amendment Act, 1964, the Direct Tax
Administrative Enquiry Committee had submitted its recommendation relating to
necessary amendments to the Wealth-tax Laws which was accepted by the
Government and made the amendments. The reasons for the deletion of sub-
section (9) of section 27 are found in the statement, objects and reasons,—Notes
on Clauses of the Wealth-tax (Amendments) Bill, 1964. We merely extract the
clause dealing with section 27(9) which runs as follows:
"Sub-section 9 having become redundant has been deleted."
Therefore, the reasons of deletion is obvious. The Limitation Act, 1963 came into
force on 1-1-1964 and provided that in the absence of exclusion of the provisions
contained in sections 4 to 24 they would apply. As such there-was no necessity for
retaining sub-section (9) of section 27 of the Act. Rather, it would have created
problem regarding applicability of sections 4, 6 to 24 of the Limitation Act. It is,
thus, seen that sub-section (9) of section 27 of the Act was intentionally deleted by
Parliament as it became redundant which makes it very clear that the Parliament
desired to apply the provisions of sections 4 to 24 of the Limitation Act in
proceedings under section 27(3) of the Act.
14. For the foregoing reasons, we hold that the provisions of section 3 as well as
sections 4 to 24 of the Limitation Act are applicable in the proceedings under
section 27(3) of the Act and the High Court can extend the period of Limitation
under section 27(3) of the Act acting under section 5 of the Limitation Act,
provided the applicant can satisfy that he had sufficient cause for not making
application within the prescribed period of limitation.
15. While reaching the conclusion we have considered the principles of law
enunciated by the Supreme Court in Hukumdev Narain Yadav v. Lalit Narain
Mishra AIR 1974 SC 480, Harishankar [1976] 1 SCC 897 where their Lordships
have stated that the provisions of the Limitation Act are not applicable to section
86 of the Representation of the People Act, 1951. Their Lordships have held that
the Limitation Act does not apply to the election proceedings in the High Court as
the Representation of the People Act is a complete and self-contained code which
does not admit of the introduction of the principles or the provision of law
contained in the Limitation Act. It has been held that section 3 of the Limitation
Act is inapplicable as section 86 of the Representation of the People Act gives a
peremptory command to the High Court to dismiss an election petition which does
not comply with the provisions of section 81, 82 or 117 of the said Act. Section 3
of the Limitation Act was, therefore, expressly excluded. Similarly, there is a
positive command that an election petition 'shall be dismissed' for non-compliance
of the aforesaid provisions. The next ground was that section 85 which was
repealed and re-enacted as section 86 of Representation of the People Act had
conferred benefit similar to the provisions contained in section 5 of the Limitation
Act, but the said benefit was withdrawn by the repeal of the proviso. Though the
Parliament made amendments to the Representation of the People Act, 1951, yet it
did not re-introduce the proviso and the clear intention of withdrawal of the
benefits which had been granted in the proviso. There was nothing to show that
the said repeal was done because the proviso became redundant or otiose. We
have held that there is no such peremptory command to dismiss an application in
section 27(3) of the Act nor has it made section 3 of the Limitation Act
inapplicable. We have also held that the Act is not a complete and self-contained
code which does not admit the introduction of the principles or the provisions of
the law contained in the Limitation Act, 1963. We have also explained that the
intention of Parliament in deleting section 27(9) of the Act was to apply the
provisions of sections 4 to 24 of the Limitation Act, 1963. As such the principles
enunciated in the cases just alluded are not applicable in the instant case.
16. Now, we enter into the merit as to whether the petitioners have satisfactorily
explained the delay in preferring the applications under section 27(3) of the Act.
The revenue preferred three Wealth-tax Appeals 17, 18 and 19 of 1976-77. They
were allowed on 13-9-1977. On 16-12-1977, the petitioners made applications for
reference under sections 27(1). On 11-3-1978 the petitioners filed applications for
rectification of the appellate order dated 13-9-1977. On 27-5-1978 the applications
for reference were dismissed ex pane and the learned Tribunal dismissed the
prayers for rectification as well. On 5-8-1978 the petitioners filed applications for
vacating the order dated 27-5-1978 as well as for rehearing the applications for
rectification dated 11-3-1978. The matters were heard and the Tribunal by its
order dated 7-11-1978 dismissed the applications dated 5-8-1978 by two separate
orders which was communicated to the petitioner on 20-11-1978. Thereafter, the
petitioners filed one composite application on 2-3-1979 under section 27(3), to this
High Court asking for the reference. However, on 17-5-1979 the petitioners filed
an application for leave of this Court to file three separate applications under
section 27(3) for the three assessment years 1971-72, 1972-73 and 1973-74. We do
not find anything on record to show that any such leave was granted by this Court.
However, along with the first application under section 27(3) the petitioner did not
file any application for condoning the delay or extending the period of limitation.
However, they filed an application under section 5 on 5-6-1979. The learned
counsel for the petitioners claims that the assessees were communicated with the
order of rejection of the reference under section 27(1) only on 29-7-1978. We shall
consider 29-7-1978 as the date of communication of the order of the rejection of
the application under section 27(1) and proceed to determine the question,
accordingly. If we turn to applications under section 27(3), we find that the
petitioners prayed to this Court requiring the Tribunal to draw up statements of
the case and refer for the determination of the High Court, the questions of law
referred in para 9 of the petition. We extract the questions formulated by the
petitioners:
"1. Whether, on the facts in the and circumstances of the case, the Tribunal
was right in holding that the mere fact that the annuity received by the
beneficiaries can be capitalised was not enough to hold the shares of the
beneficiaries in the corpus in determination or known so as to attract the
assessment in the manner contemplated under section 21(4) of the Wealth-tax
Act, 1957?
2. Whether, on the facts and in the circum stances of the case and on a proper
construction of the provisions of section 21 of the Act, the Tribunal was right in
holding that the provisions of section 21(4) are applicable in the circumstances
of the case?
3. Whether the Tribunal was justified in holding that the right to receive
annuity is quite different from a share in the assets of the trust as such.
4. Whether, on the facts and in the circum stances of the case, the assessment
on the trustee should be made under section 21(1) or section 21(4) of the
Wealth-tax Act, 1957?
5. Whether the assessee was assessable to wealth- tax for the wealth of the
trust when the beneficiaries have already been assessed?"
17. Therefore, the petitioners asked the Court to refer the questions which were
decided by the Tribunal on 27-5-1978. This Court, in exercise of its power under
section 27(6), can decide only the questions of law arising out of the order of the
Tribunal under section 27(1). It is not disputed before us that the applications
under section 27(3) are only against the orders dated 27-5-1978. In our opinion,
the period of limitation under section 27(3) commences from the date of service of
the notice of refusal or rejection of applications under section 27(1). In the instant
case, the applications were rejected on 27-5-1978 and the notices of refusal were
served on the petitioners on 29-7-1978. The period of limitation was within '90
days' from, the date on which the assessees were served with the notices of
refusal or rejection, that is, 90 days from 29-7-1978. The petitioners claim in para
7 of their petition that the applications were filed beyond the period of 90 days but
they had acted on instructions received from their counsel, Mr. A.K. Banerjee, who
advised them that the reference applications before this Court could be preferred
within 6 months from the date of the order. The petitioners contend that the
confusion as to the period of limitation was created by Mr. A.K. Banerjee, their
counsel, as he thought that the reference applications were to be made under
section 256(2) of the Income-tax Act, 1961. The petitioner has stated in his
petition in the following terms:
"The petitioner states that Shri A.K. Banerjee made a bona fide mistake in
advising your peti- tioner to move this Hon'ble Court within six months from
the date of the order passed by the Income-tax Appellate Tribunal and not
 within 90 days as prescribed under section 27(3) of the Wealth-tax Act."
[Emphasis supplied]
18. The petitioners have stated that for the wrong advice so given, there was a
delay in presenting the applications. However, the statements made by the
petitioners were not supported by any statement of the counsel, so we granted
time to the assessees. The learned counsel has filed an affidavit in support thereof.
Mr. Banerjee, the learned income-tax practitioner, has made a statement that he
advised the assessees to prefer the appeals relating to the years before the AAC
and represented them before the learned Tribunal. It was he who had advised the
assessees for preferring the application to the Tribunal at Gauhati under section
27(1) for reference to this High Court for the determination of the questions of law
and he drafted the said applications. However, the said references were rejected.
After the rejection of the said application, he advised the petitioners to move the
High Court at Gauhati against the said order of dismissal under section 27(3) of
the Act. The pertinent assertions of the learned counsel about his mistake as
contained in para 8 of his affidavit, read as follows:
"8. As a practitioner of income-tax I submit that I advised my clients to refer
questions of law to the Hon'ble High Court as provided under section 256(2) of
the Income-tax Act, 1961. The time provided for preferring the reference
application under Income-tax Act is 6 months from the date of the order. By
mistake I advised the trustees that the time to file the reference application
was 6 months without knowing the fact that the time for filing the reference
application in the case of wealth-tax matter was 90 days under section 27(3) of
the Wealth-tax Act, 1957. I was confused and while giving the said advice, I
was under the wrong impression that the time-limit for filing reference petition
under the Wealth-tax Act was also the same as under Income-tax Act. The
trustees acted according to my advice. The necessary reference petition and
other pleadings were drafted according to my advice and filed in Gauhati High
Court.
In the above circumstances, the delay in filing the reference application may
kindly be condoned. I myself supervised the entire matter and delay in filing
the reference application was caused by my mistake as hereinbefore stated."
[Emphasis supplied]
19. It shows clearly that Shri Banerjee assumed that it was a reference under
section 256(2) of the Income-tax Act and, accordingly, he advised his clients to file
the application within six months from the date of the order. Unwittingly, he had
advised the assessees that the period of limitation was six months whereas the
period of limitation was 90 days under section 27(3) of the Act. He said that he
was confused while giving advice as he was all along under the impression that it
was a reference under the Income-tax Act. The learned counsel claims that the
assessees acted on his advice and the reference petition and other pleadings were
drafted by him. The learned counsel has stated that in view of the wrong advice
given by him the delay was caused. Therefore, it appears clear that the learned
counsel owned the responsibilities of giving advice to the assessees that the
period of limitation was six months from the date of the order and not 90 days as
provided in section 27(3) of the Act. When the learned counsel has made positive
assertions in his affidavit, we must accept them as exact, precise and correct. The
learned counsel advised the assessees to prefer the application within six months
from the date of the order of refusal, that is, six months from 27-5-1978. The said
period of six months expired on 27-11-1978 and the first composite application
under section 27(3) was filed on 2-3-1979, long beyond the instructed period. Mr.
D.N. Barua, the learned counsel for the assessees, submits that 'Shri Banerjee,
Advocate for the assessees, meant 'six months from the date of service of the
order of refusal' and not six months from the date of the order of refusal. To
construe the statement as suggested by Shri Barua, we have to put certain words
in the affidavit of Shri Banerjee, which are conspicuously absent in his affidavit.
However, let us give allowance and accept the contention of Shri D.N. Barua, the
learned counsel for the assessees. Even if the advice of Shri Banerjee were so, we
find that the learned Tribunal rejected the; prayer for reference on 27-5-1978 and
on 29-7-1978 the assessees were served with the notices of the refusal or
rejection. Even the period of six months from 29-7-1978 expired on 28-1-1979
whereas the composite application under section 27(3) was filed on 2-3-1979 but
registered on 17-3-1979. Therefore, even the professed instructed period of six
months from 29-7-1978 expired on 28-1-1979 but the application was filed on 2-3-
1979. Under these circumstances, even if we grant all allowances to the
petitioners, accept the statements of Shri Banerjee, the learned counsel, in their
entirety and even put in some more favourable words in the affidavit of Shri
Banerjee, we find that the reference application was barred by limitation on and
after 29-1-1979. Admittedly, the first application was filed on 2-3-1979. There is
absolutely no explanation as to what was the cause for not presenting the
application within the period as instructed by the learned counsel for the
assessees, namely, Shri Banerjee. We give full allowance and credence to every
word spoken by the learned counsel, even we have added certain statements
favourable to the assessees, yet we find that the period of limitation expired on 29-
1-1979 and there is no explanation for the delay from 2-1-1979 to 21-2-1979.
Therefore, even if we grant extension of the period up to 28-1-1979 or 29-1-1979,
giving wide and extended meaning to the affidavit filed by the learned counsel, yet
we find that there was no ground to condone the delay from 29-1-1979. to 1-3-
1979. We are helpless. Under these circumstances, we are compelled to hold that
the delay in preferring the applications under section 27(3) cannot be condoned.
Accordingly, the application stands dismissed. However, we make no order as to
costs.
Mr. D.N. Barua, the learned counsel, has submitted that Shri Banerjee stated in his
affidavit that he had instructed his clients to prefer the application under section
27(3) against the order of the rejecting of the prayer of the assessees for
rectification. Admittedly, there is no such statement in his affidavit. A reference
under section 27(3) can be made only against an order passed under section 24
and the question of law must arise out of the orders passed under sections 24 and
26. The law is very clear. No person instructed in law could have made such a
statement, naturally Shri Banerjee, an advocate, could not have given such
instruction. In fact he did not make such a statement. As such the contention is
turned down. We reiterate that the assessees themselves did not ask for any
reference against the order arising out of the rectification proceedings.
We have quoted and unquoted the relevant statements made by Shri Banerjee. We
do not find any inkling or indirect reference that Shri Banerjee had advised the
assessees to file the reference applications from the date of any ancillary
proceedings, including the proceeding arising out of application for rectification.
In the result, the petition is dismissed. There will be no order as to costs.
Before parting, we record our appreciation for the assistance rendered by Shri J.P.
Bhattacharjee, Advocate General, Nagaland and Dr. B.P. Saraf, the learned
standing counsel for the revenue, in dealing with the question of applicability of
section 5 of the Limitation Act.
High Courts Vol. 16 - Sec.IITAXMANFebruary, 1984