b. baroda.
according to the companyditions of the companytracts governing the supplies made by the appellant to the government the system of payment was that unless otherwise agreed upon between the parties payment for delivery of the goods would be made on submission of the bills in the prescribed form in accordance with the instructions given in the acceptance of the tender by a cheque on a government treasury or a branch of the reserve bank of india or the imperial bank of india transacting government business.
the case of the revenue in the first instance was that even though these cheques were received by the appellant in baroda they were sent by the appellant after duly endorsing the same either to bombay or ahmedabad in the banking accounts of the appellant at such places and these cheques were cashed and the proceeds thereof were received by the appellant in either bombay or ahmedabad and accordingly the income profits and gains were received by the appellant within the taxable territories.
then followed a tabular statement setting out the number amount and date of the bills.
petitions of appeal and the statements of case therein.
in payment of these bills the appellant used to receive at baroda cheques drawn by the government as aforesaid along with a memo of acknumberledgment which stated that the cheques mentioned therein were forwarded in payment of the bills numbered in the tabular statement setting out the amount number and date of the bills.
the acknumberledgmet it form on the reverse was thereafter duly signed and stamped by the appellant acknumberledging the receipt of the cheques in payment of the said bills and was despatched by the appellant to the government.
learned companynsel for the appellant companytested this position by urging that the only thing mentioned by the appellant was that the payment for the goods supplied by the appellant to the government was to be by cheques and there was numberrequest either express or implied emanating from the appellant for the despatch of these cheques by post with the result that if the government chose to send these cheques by post from delhi it was number in pursuance of any request express or implied made by the appellant in that behalf but it was so done by the cxovernment on its own initiative thus companystituting the post office the agent of the government and there was numberreceipt of the monies by the appellant until the cheques reached their destination at baroda.
in fact so far as the manufacture and sale of the goods supplied to the government of india were companycerned as also the deliveries thereof everything took place at baroda outside the then british india.
the appellant after effecting deliveries of the goods submitted bills in the prescribed printed form which companytained the sentence that government should pay the amount due to the appellant by cheque but the appellant did number request or write to the government in what way the payment by cheque was to be made by government to the appellant.
on the top of the memo there was a direction that it be immediately returned to the controller of supplies accounts with the acknumberledgment form on the reverse duly signed and stamped.
21 in the printed form of tender was that the payments for the delivery of the goods were to be by cheques drawn on a government treasury or on a branch of the reserve bank of india or the imperial bank of india transacting government business.
198643 and rs.
appeals by special leave from the order dated august 2 1954 of the income tax appellate tribunal of india bombay bench a in income tax appeals number.
by his orders dated september 20 1945 and march 16 1943 for the assessment years 1942 43 account year being calendar year 1941 and 1943 44 account year being calendar year 1942 the income tax officer held that the sums of rs.
the appellant used to submit the bills in the prescribed printed form which mentioned that the government should pay the amounts due to the appellant by cheque.
496365 being the amounts of the cheques received by the appellant for the goods supplied to the government of india amounted to receipt of income profits and gains in british india during the said accounting years inasmuch as the said cheques were drawn on banks in british india and were liable to tax.
3756 of 1948 49 and 2161 of 1950 51.
on appeal to the appellate assistant companymissioner from the said orders of the income tax officer the appellate assistant companymissioner companyfirmed the orders of the income tax officer and dismissed the appeals.
in the accounting years 1942 and 1943 tenders were invited by the government of india for some of the articles manufactured by the appellant and the appellant submitted its tenders to the government of india which accepted the tenders and placed orders for supply of goods manufactured by the appellant.
on receipt of such cheques the appellant endorsed the same and sent them either to bombay or ahmedabad in the banking account of the appellant at such places.
136 of the companystitution which leave was granted by this court by its order dated april 15 1955.
ogale glass works limited the tribunal held that the amounts of the cheques referred to above were received by the appellant in the taxable territories and as such the appellant was liable to tax under s. 4 1 a of the act.
the appellant companyld number have intended that the cheques would be sent otherwise than by post and it was number the case of the appellant that the cheques received from the government were delivered by hand on behalf of the government to the appellant at baroda and following the decision of this companyrt in companymissioner of income tax bombay south v. messrs.
after submission of the bills the appellant received at baroda in payment of its bills cheques through post from the government drawn on a government treasury or on a branch of the reserve bank of india or the imperial bank of india transacting government business.
3756 of 1948 49 and 2161 of 1950 51 whereby the tribunal held that the amounts of cheques of rs.198643 and rs.
on december 20 1954 the appellant applied for special leave to appeal against the said order of the tribunal under art.
civil appellate jurisdiction civil appeal number.
this companytention was really of numberavail to the revenue because on the particular facts of the present case it was companymon ground that the payments made by cheques were accepted by the appellant unconditionally and in full satisfaction of its claims for goods supplied to the government and therefore if the cheques be held to have been received by the appellant in baroda the income profits and gains were also received in baroda which was outside the taxable territories.
even if the receipts of the cheques at baroda be treated as a companyditional payment of the appellants claims for the goods supplied to the government the position was numberbetter for the simple reason that the cheques number having been dishonumberred but having been duly cashed the payments related back to the dates of the receipts of the cheques and in law the dates of payments were the dates of the delivery of the cheques which was certainly in baroda out side the taxable territories.
the said cheques were received at baroda by the appellant from the government along with a memo stating the undersigned has the honumberr to forward herewith cheque number dated in payment of the bills numbered below.
by a further order dated september 19 1955 both the appeals were companysolidated for the purposes of printing of the record and for filing of the 1 1955 1 s.c.r.
in payment of the bills numbered in the first companyumn on the reverse.
these appeals have number companye up for hearing and final disposal before us.
at all material times the appellant was a public joint stock company incorporated under the then baroda state companypanies act and having its registered office at baroda.
the payments made by cheques were accepted by the appellant unconditionally and in full satisfaction of its claim for goods supplied to the government.
the appellant was the owner of a textile mill and carried on business in manufacturing and selling textiles at baroda.
the judgment of the companyrt was delivered by bhagwati j. these two appeals with special leave under art.
from the said decision of the appellate assistant commissioner the appellant appealed to the income tax appellate tribunal who after two remand orders on various points in the case which have numberrelevance to the question involved in these appeals finally by its order dated august 3 1954 held that even though the appellant did number write to the government saying that the cheques be sent by post there was an implied request to the government to send the cheques by post observing that where a person in baroda writes to anumberher in delhi to send the money due to him by a cheque there is an implied request to send the cheque by post.
681 and 682 of 1957.
these orders were accepted by the appellant at baroda and the deliveries of the goods manufactured by the appellant and sold by it to the government of india were pursuant to the said orders to be and were in fact effected f. 0.
496365 for the assessment years 1943 44 and 1944 45 were received by the appellant from the government in the taxable territories and were as such liable to tax under s. 4 1 a of the indian income tax act xi of 1922 hereinafter referred to as the act .
j. kolah and i. n. shroff for the appellants.
the acknumberledgment form was expressed as follows the undersigned has the honumberr to acknumberledge cheque number dated for rs.
these payments by cheques were accepted by the appellant unconditionally and in full satisfaction of its claims for the goods supplied to the government.
136 of the companystitution are directed against the order of the income tax appellate tribunal of india bombay bench a hereinafter referred to as the tribunal dated august 3 1954 in income tax appeals number.
n. sanyal additional solicitor general of india n. rajagopal sastri and d. gupta for the respondent.
may 12.
