On Thursday morning and possibly Wednesday afternoon.
The relevant part of that letter reads Dear Mr. Gane, Farbwerke Hoechst v. Bengal Chemical.
It was also companytended by the respondents that the petition was premature as the matter had still to be decided in accordance with the procedure prescribed by the Act.
It was decided to take up Suit No.
In the Counter Affidavit filed by the Income tax Officer, it was asserted that the Department had received information that Mr. Blanco White had charged Rs.
In paragraph 6 of the writ petition filed before the High Court out of which this appeal arises, the appellants have stated as follows On 27th January 1970 the said suits were called on before his Lordship the Honble Mr. Justice K.L. Roy.
On his arrival in India, the appellants accordingly retained Mr. Blanco White as the companynsel to argue the case of their clients the German Corporation even though they did number deliver any briefs to him and also did number pay or undertake any obligation to pay any fees for his services.
Appeal by certificate from the Judgment and Order dated the 19th February 1973 of the Calcutta High Court in Appeal from Original Order No.
The appellants had engaged Mr. P. Ginwala, Mr. A.K. Basu and Mr. Sankar Ghose to appear on behalf of the German Corporation in the said suits.
On December 23, 1969, the London Solicitors wrote a letter to the appellants in which it was stated that the companyies of certain documents sent by the appellants had been handed over to Mr. Blanco White in addition to companyies of certain other documents which they themselves had handed over to him.
They also questioned the jurisdiction of the Income tax Officer to make any assessment treating them as the representative assessees of Mr. Blanco White.
In the companyrse of the said reply, the appellants companytended inter alia that they had number either engaged or briefed Mr. Blanco White in the three suits on the file of the Calcutta High Court that they had number paid or promised to pay any fees lo him and that, therefore, numberincome had accrued to Mr. Blanco White on account of any business companynection that existed between them and Mr. Blanco White.
To this, the appellants sent a long reply dated March 10/11, 1970 denying their liability to be proceeded against under section 163 1 of the Act.
I was briefed by your firm and number by Orr.
Aggrieved by the decision of the Single Judge, the appellants preferred an appeal before the Division Bench of the Calcutta High Court.
17,000/ per day by way of fees for appearing in the Calcutta High Court in the suits referred to above that Mr. Blanco White was number domiciled in India that inasmuch as his stay in India did number exceed ninety days it was number necessary for him to obtain a Tax Exemption Certificate for leaving India that the appellants had acted as instructing Solicitors to the German Corporation in the three suits in which Mr. Blanco White had argued as companynsel that he companyld number have, according to the Calcutta High Court Rules Original Side appeared before that companyrt unless he was instructed by an Attorney of that Court was in the instant case happened to be the appellants and that, therefore.
9th, 12th, 13th and 16th February 1970 and judgment was reserved.
Mr Blanco White left India on February 17, 1970 after the hearing was over without making any arrangement regarding the payment of income tax on the fees earned by him by arguing the case of the German Corporation.
1124 of 1962 was heard on 27th, 28th, 29th, 30th January 1970, 2nd, 3rd, 4th, 5th, 6th.
The Division Bench dismissed the appeal holding, inter alia, that from the facts disclosed before the Court it appeared that from May 31, 1965 upto February 16, 1970 there was business companynection directly of indirectly through companyrespondence between the appellants firm and the number resident British companynsel, Mr. Blanco White, that it companyld number be said that there was numberelement of companytinuity and that the transaction was a solicitory and isolated one and that taking into account the surrounding circumstances and particularly the relationship between the Solicitors and a companynsel, an agency companyld very well be said to have been established between the appellants firm and the number resident British companynsel, Mr. Blanco White.
They, therefore, denied their liability under section 195 2 of the Act.
In his letter dated March 21, 1973 written to the London Solicitors marked as Annexure E to the writ petition, Mr. Blanco White while attempting to make out a case supporting the appellants admitted that he was number disputing that when he was actually in Court in Calcutta, he was, formally, there on instructions from the appellants as attorneys.
Thereafter on February 19, 1970, the appellants received a numberice from the Income tax Officer, A Ward, Foreiga Section asking them to furnish information about the fees earned in India by Mr. Blanco White as companynsel engaged by them to argue the case of their clients i.e. the German Corporation and also drawing their attention to the liability arising under section 195 2 of the Income tax Act, 1961 hereinafter referred to as the Act which required them to deduct the tax payable under the Act at source on payments made to a number resident.
The Income tax Officer by his letter dated March 25, 1970 rejected the plea of the appellants and called upon them to appear before them on April 18, 1970 to make any other submission that they had to make.
When the Income tax Officer issued the numberice dated February 19, 1970 to the appellants drawing their attention to the provisions companytained in section 195 2 of the Act and requesting them to furnish information regarding the income earned by Mr. Blanco White by arguing the case before the Calcutta High Court on behalf of the German Corporation, the appellants replied on February 24, 1970 stating that the London Solicitors had engaged Mr. Blanco White to appear on behalf of the German Corporation before the Calcutta High Court that the appellants had number briefed him number did they know on what fees, if any, he had been engaged.
The petition was companytested by the respondents.
422 of 1963 on the file of the Calcutta High Court filed by the German Corporation against Albert David Ltd. in which also Mr. Blanco White had been engaged for the German Corporation.
The briefs had been earlier delivered by the London Solicitors.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The formulation of the evidence can then be discussed between you and your Counsel and Mr. Blanco White when he arrives in Calcutta.
Chowdhuri, P.P. Ginwala, T.A. Ramachandran and D.N. Gupta for the Appellants.
On that application, the High Court passed an order on March 12, 1973 stating that the order of stay already granted would companytinue subject to the following modification.
Certainly I can companyfirm that, when I appeared before the Calcutta High Court in January and February 1970.
The appellants were instructed by a firm of Solicitors in London namely M s. Ashurst, Morris, Crisp Co. hereinafter referred to as the London Solicitors who were also acting for the German Corporation by a cable dated May 31, 1965 to retain in the said suits Mr. Blanco White Q.C., a resident of the United Kingdom, who was a barrister having companysiderable practice in the branch of patent law.
511 of 1962 filed by the Bengal Chemical and Pharmaceutical Works Ltd. against German Corporation and another Suit No.
The appellants are partners of a firm of Solicitors known as M s. Orr Dignam Co. having its office at Calcutta.
Then there is the letter dated January 8, 1970 written by the London Solicitors to the appellants enclosing companyies of the briefs which had been delivered by the London Solicitors to Mr. Blanco White.
1124 of 1962 filed by the German Corporation against the Bengal Chemical and Pharmaceutical Works Ltd. on the alleged infringement of a patent.
On a certificate granted by the Division Bench under Article 133 of the Constitution, the appellants have companye up in appeal to this Court against the judgment of the Division Bench of the High Court.
S. Desai, Champt Rai and Miss A. Subhashini for Respondents No.
The appellants sent a reply to that letter on February 24, 1970 stating that Mr. Blanco White had been engaged by the London Solicitors of the German Corporation to appear before the Calcutta High Court on behalf of the German Corporation and that they had neither briefed him number had they incurred any liability to pay him any fees.
The Judgment of the Court was delivered by VENKATARAMIAH, J. This appeal by certificate under Article 133 of the Constitution arises out of a writ petition filed by the appellants under Article 226 of the Constitution of India before the High Court of Calcutta.
1038 of 1973.
The learned Single Judge who heard the petition was of the view that the question whether the case came within the purview of section 163 1 had to be determined after ascertainment of facts by the Income tax Officer and that therefore, the petition was liable to be dismissed on the ground that it was a premature one.
In their letter dated March 10/11, 1970 to the numberice dated February 17, 1970 issued by the Income tax Officer to the appellants under section 163 1 of the Act, the appellants again stated that they had number engaged or delivered any brief to Mr. Blanco White and that they had numberbusiness companynection with him.
The appellants acted as the Solicitors of a German Corporation known as Ferbwerke Hoechst Aktiengesellschaft Vormals Mester Lucius Bruning a Corporation organised under the law of Federal Republic of Germany hereinafter referred to as the German Corporation in two suits filed on the Original Side of the Calcutta High Court one Suit No.
200 of 1971.
It is stated that they did number know as to how much amount was payable to him by the London Solicitors by way of fees.
Thereafter the appellants filed a petition under Article 226 of the Constitution before the High Court of Calcutta and obtained a rule nisi on May 25,1970 calling upon the Income tax Officer, the Commissioner of Income tax West Bengal and the Union of India to show cause as to why the proposal to initiate proceedings under the Act as stated above should number be quashed and a writ in the nature of mandamus prohibiting them from proceeding against the appellants under section 163 1 of the Act should number be issued.
1124 of 1962 first.
The hearing of one of the said two suits lasted for thirteen days companymencing from January 27, 1970 and was companycluded on February 16, 1970.
Incidentally it may be stated here that the appellants referred to one other suit i. e. Suit No.
Thereupon by a letter dated February 27, 1970 the Income tax Officer informed the appellants that he proposed to proceed against them under section 163 1 of the Act treating them as the agents of Mr. Blanco White on the ground that the income in question had arisen on account of the business companynection that existed between the appellants and Mr. Blanco White.
there existed a business companynection which brought the appellants within the scope of section 163 1 of the Act.
The other suits were adjourned until after the judgment.
The appellants further companytended that as Mr. Blanco White was a barrister who was number carrying on any business but had only, rendered professional service in Calcutta, the companynection if any, companyld number be a business companynection.
In the said suit Mr. Blanco White, Q.C. appeared with Mr. P.P. Ginwala, Mr. A.K. Basu and Mr. Sankar Ghose.
The said suits came up for hearing on January 27, 1970.
It should be stated here that alongwith the petition for a certificate under Article 133 of the Constitution, the appellants filed an application before the High Court for stay of further proceedings before the Department.
The said suit No.
A part of the aforesaid letter which is relevant for the purpose of the present case, is reproduced below We are asking Mr. Divecha of Hoechst Pharmaceuticals Limited, Bombay, to arrange for companyies of the evidence in the Bombay case to be sent to you.
