Manohar Lall Ag. C.J.

1. The Appellate Tribunal at the instance of the assesses has referred to us the following question u/s 66(1), Income Tax Act, 1922:

Whether the Notification dated 26-5-1940, read with the Chota Nagpur Division and Santal Pargannas District Validating Regulation, 1941, issued by the Governor of Bihar is competent in law to validate the proceeings initiated and completed for the assessment of the applicant under the Income Tax Act, 1922, as amended by the Income Tax (Amendment) Act, 1939, for the assessment year 1940-41.

2. The facts of this case are somewhat similar to the facts in Misc. Judicial case No. 130 of 1944 disposed of today but the relevant dates are different. In this case, the assessee has been assessed for year 1940-41, his previous year being 1939-40. On 20-4-1940, a notice u/s 22(2) of the Act was served upon the assessee requiring him to furnish a return in the prescribed form. On 22-4-1940, a notice u/s 22(1) was published in the press requiring persons generally to submit returns in the prescribed form. By that time the Indian Finance Act of 1940, which is applicable to this assessment, had not been extended to the excluded area concerning this assessment. On 26-5-1940, the Governor of Bihar by notification u/s 92(1), Government of India Act, 1935, enacted that the Indian Finance Act of 1940 and some other Income Tax Amendment Acts should be deemed to have been applied to the Santal Pargannas and the Chota Nagpur Division with effect retrospectively from the date on which these Acts came into force in other parts of the Province of Bihar. To remove doubts as to the applicability retrospectively of the Indian Finance Act and other Acts mentioned therein the Governor of Bihar acting u/s 92(2), Government of India Act, made Regn. 1 of 1941 for the peace and good government of the area in question directing that the Income Tax Law Amendment Act, 1940, the Excess Profits Tax Act, 1940, and the Indian Finance Act, 1940, should be deemed to have come into force in the area to which this Regulation extended on 26-3-1940, 13 4-1940 and 6-4-1940, respectively. This was done with the consent of the Governor-General. The assessment proceedings which had been started as aforesaid were completed on 9-3-1941. The appeal of the assessee was dismissed by the Appellate Assistant Commissioner on 30-12-1942, and the further appeal to the Tribunal was dismissed on 27-7-1943.

3. We have heard most elaborate and learned arguments by the Advocate General on behalf of the assessee. His contentions may be summarised as follows: (1) The notification and the Regulation cannot apply retrospectively to this assessment on a plain reading of the terms of the two enactments, and (2) even if the Act and the Regulation can be so interpreted, the Governor has no power to give a retrospective effect either acting u/s 92(1) or acting u/s 92(2) Government of India Act. In our opinion these contentions are not fit to succeed in this case. It cannot be doubted that from the date of the notification u/s 92(1), Finance Act of 1940 must apply to these proceedings. The assessment therefore, which was actually completed on 9-3-1941, was valid as on that date Finance Act of 1940 was in force in the area in question. It is, therefore, unnecessary to consider the question so ably raised in the argument of the learned Advocate-General except to the extent about to be noticed. The learned Advocate-General next contended that the notification in question is not expressed to be retrospective in the sense that it does not expressly declare that all assessment proceedings which have already begun (the proceedings in this case began on 20-4-1940) must be deemed to have validly begun, and draws attention as an illustration to Ordinance 45 of 1944 by which the Government of India expressly validated the notices which were issued u/s 22(2). This Ordinance was passed to obviate the difficulties created by the case in Commissioner of Income Tax Vs. Ekbal and Co., which decided that such notices were invalid as they allowed the assessee a period of less than 30 days within which the return should be filed. But the short answer to this contention is that no liability to tax attached or attaches before the Finance Act of the relevant year is passed. Therefore, in the present case, the liability to tax arose at least on 26-5-1940, and the proceedings thereafter were entirely valid. In these circumstances the question whether the notification issued on that date could not be legally made retrospective does not arise for consideration.

4. It was then argued that even if this was so, the proceedings which were taken before the 26-5-1940, were invalid. This contention is dealt with below. The alternative contention of the learned Advocate General that the Governor acting u/s 92(2) could not validly pass the Regulation to apply the provisions of the Finance Act retrospectively does not arise for decision in view of the opinion expressed above. But, if it was necessary to come to a decision for the reasons given by us while disposing of Misc. J.C. No. 130 of 1944 we would have held that the Governor had power to pass Regulation 1 of 1941 for the peace and good government of this area, and, therefore, the provision in that Regulation that the Finance Act of 1940 shall be deemed to have come into force on the 64-1940, would render the proceedings initiated in this case on 20-4-1940 also valid. The learned Advocate General also contended that there was no proper notice issued in this case u/s 22(1). But a proper notice was admittedly issued u/s 22(2) on 20-4-1940, and, in pursuance of that notice, the assessee cannot legitimately be allowed to raise the question of the invalidity of the notice u/s 22(1) when a valid notice u/s 22(2) has been issued and it is upon that notice that the return was filed by him. The object of the notice u/s 22(1) is to give a general notice to the public so that they may be ready to file their returns within a certain time. The question may arise for consideration in those cases where no notice has ever been issued u/s 22(2) of the Act, and the assessee has not filed any return, but that question does not arise in the present case.

5. Lastly, it was argued that the notice u/s 22(2) itself must be taken to be invalid because on that date the Finance Act of 1940 had not been applied to this area. Assuming that this argument is correct, the assessee having appeared and filed the return and the assessment having been completed after the Finance Act of 1940 had been applied to this area, the argument of the assessee is wholly untenable on general principles. Take as an illustration a case where an execution is taken out against the judgment-debtor without the issue and service of a notice under Order 21, Rule 22, Civil P.C. It has been held that the consequent sale of his property is without jurisdiction. But where the judgment-debtor appeared before the sale and raised objections which had been overruled, it has been repeatedly held that the sale cannot be held to be without jurisdiction by reason of the fact that the notice under Order 21, Rule 22, Civil P.C., was not served upon him--the reason being that the object of the notice is to give an opportunity to the judgment-debtor to appear and contest that the decree cannot be put into execution against him on the ground of limitation or on the ground that he had paid off the decretal amount in full or in part or for other valid reasons. For these reasons the answer to the question referred to us is in the affirmative. In the circumstances each party will bear his own costs in this Court.

Misc. J.G. No. 82 of 1944.

6. It was agreed before us that the answer to the question in this case must be the same as the answer the Court will give in M.J.C. 71 of 1944. The facts are entirely similar. For the reasons given while disposing of M.J.C. 71 of 1944 the answer to the question below is in the affirmative.

Whether the Notification dated 26-5 1940 read with the Chota Nagpur Division and Santal Pargannas District Validating Regulation, 1941, issued by the Governor of Bihar is competent in law to validate the proceedings initiated and completed for the assessment of the applicant under the Indian Income tax Act, 1922, as amended by the Indian Income Tax Amendment Act, 1939, for the assessment year 1940-41.

7. In the circumstances, each party will bear his own costs in this Court.

Sinha, J.

8. I agree.

Das, J.

9. I agree.