 29 bill no u of i"" the taxation laws (continuation~rand vali- da non of recovery proceedingstbill, 1964a bill to provide jor the continuation and validation oj proceedings in relation to government dues and jor matters connected therewith be it enacted by parliament in the fifteenth year of the republic of india as follows: - 1 this act may be called the taxation laws (continuation and short title validation of recovery proceedings) act, 1004 2 in this act, unless the context otherwise requires,-deftnltlonl  (a) "assessee", in relation to--of 1940 of 1947 (i) the excess profits tax act, 1940, or the business profits tax act, 1947, means a person ,by whqtil the tax or any other sum is payable under that act; (ii) the estate duty act, 1953, means a person accountable or an accountable person as defined in that act; (iii) any other schedu1ed act, means an assessee as defined in that act; \ (b) "government dues", in relation to any scheduled act, means any tax, duty, penalty, fine, interest, annuity deposit or any other sum payable to the government by an assessee under that act; (c) "scheduled act" means an act specified in the schedule; (d) "taxing authority", in relation to any scheduled act, means an officer (by whatever name called) empowered to serve upon an assessee a notice of demand in respect of any government dues under that act; (e) "tax recovery officer", in relation to any scheduled s act, means a tax recovery oftlcer as defined in that act and where there is no such definition, means an officer (by whatpver name called) to whom a certificate for the recovery of arrears of government dues may be issued under that act 3 (1) where any notice of demand in respect of any govern- 10 ment dues is served upon an assessee by a taxing authority under any scheduled act, and any appeal or other proceeding is filed or taken in respect of such government dues, then,-continuation anei validation of certain proceedinii-(a) where such government dues are enhanced in such appeal or proceeding, the taxing authority shan serve upon the is assessee another notice of demand only in respect of the amount by which such government dues are enhanced and any proceedings in relation to such government dues as are covered by the notice or notices of demand served upon him before the disposal of such appeal or proceeding may, without the service of any 20 fresh notice of demand, be continued from the stage at which iuch proceedings stood immediately before such disposal; (b) where such government dues are reduced in such appeal or proceeding,-(i) it shall not be necessary for the taxing authority a, to serve upon the assessee a fresh notice of demand; (ii) the taxing authority shall give intimation of the fact of such reduction to the assessee, and where a certificate has been issued to the tax recovery officer for the recovery of such amount, also to that officer; 30 (iii) any proceedings initiated on the basis of the notice or notices of demand served upon the assessee before the disposal of such appeal or proceeding may be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before such disposal;· 3s (c) no proceedings in relation to such government dues (including the imposition of penalty or charging of interest) shall be invalid by reason only that no fresh notice of demand w8i aenred upon the assessee after the disposal of such appeal or proceeding·or that such government dues have been enhanced 40 or reduced in such appeal or proceeding: provided that if as a result of ad)' final erder eb, govern- t dues (other than adduity deposit) have been reduced and  lok sabra corrigenda to the taxation uws (continujtion ljid vtlidjaotion of rlscovery proceedings) bill, 1964(to be/as introduced in lok sabba) 1 page 7, line 1 from bottcm,-for tllak sabha" read "lok sabha" 2 page 7, line 3 from bottcm,-~ for "(continuation of recovery proceedings) it read -· -l "(continuation and validation of recovery proceedings)" · -  3 in the docket page,-~ ~ !2!: "proceed-dings" read "proceed-ings" ~ ::s o'q • new delhi-lffiril 29 1964 vaisakha 9--; 1886( saka) the penalty imposed on the assessee for default in ,payment thereof exceecis the amount so reduced, the excess shall not he recovered and jf it has already been recovered, it shall be rerun •• ed to the assessee on an application made by him ·to the taxing authority within such time and in such manner as may be prescribed by rules made under this ad: provided furthe" that if the amount of nenalty fmpol'led on tlle asses!jee for failure to make any annuity deposit exceeds onehah of the amgtmt of the annuity deposit required to be made 10 as a rerolt of roch order, the excesl'l shan not be recovered, and if it ha!l already been recovered, shal1be refunded to the asse!'lsee gil anapptication made by him to th~ taxing authority within such time and in such manner 85 may be prescribed by rules made under this act: is provided further that wherp any govemment dues are reduced in !luch anpeal or pr~eedinlt and the asses~e is entitled to any refund thereof !luch refund shall be made in accordance with the provisions of that act (2) for the removal of doubts, it is hereby declared that no fresh 20 notice of demand shall be necf'!'lsary in any case where the amount of government dues is not vl'irieci as a result of anv order passed in any appeal or other proceedin~ under any scheduled act (1) the provisions of this section shall have effect notwithstanding any judgment, decree or order of any court, trihunal or other 25 authority 4 the central government may, by notification in the official power to gazette, add the name of any central act providing for' the imposf- ~:~~e tion or levy of any tax or duty in the schedule and on the is6ue of c e any such notification, the act so added shall be deemed to be an 30 act specified in the schedule within the meaning of clause (c) of section 2 5 the provisions of this act shall apply and shall be deemed always act to to have applied, in relation to ev~ notice of demand served upon have ~­an assessee br any taxing authority under any scheduled act ~~v 3s whether such notice was· or is served before or after the commenceec  ment of this act 6 if any difticulty arises in giving effect to the provisions of this power to act, the central government may, by order published in the oftlcial =~es gazette, make such provisions not inconsistent with the purposes of 40 this act, as appear to it to be necessary or expedient for removing the difficulty 7 (1) the central government may make rules for carrying out the purposes of this act power to make rule • (2) every rule made under this act shall be laid as'soon as may be after it is made, before each house of parliament while it is in session for a total period of thirty days which may be comprised in 5 one session or in two successive sessions, and, if before the expiry of the session in which it is so laid or the session immediately following both houses agree in making any modification in the rule or both houses agree that the rule should not be made, that ru'le shall thereafter have eft'ect, only in such modified form or be of no effect, as the 10 case may be, so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule  the schedule [see section 2 (c)]1 the indian income-tax act, 1922 (11 of 1922) s 2 the excess profits tax act, 1940 (15 of 1940) 3 the business profits tax act, 1947 (21 of 1m7) 4 the estate duty act, 1953 (34 of 1953) 5 the wealth-tax act, 1957 (27 of 1957) 6 the expenditure-tax act, 1957 (29 of 1957) 7 the gift-tax act, 1958 (18 of 1958) 10 8 the income-tax act, 1961 (43 of 1961) 9 the super profits tax act, 1963 (14 of 1963) statement of objects and reasons recently in the case of income-tax offi,cer, kolar and another vs seghu buchiah setty, the supreme court had occasion to consider the scope of sections 29 and 45 of the indian income-tax act, 1922, and it has been held in that case that when a demand levied by the income-tax officer as a result of an assessment is varied by an appellate or revising authority, the original order of the income-tax officer merges into the order of such authority and consequently in all cases of an order varying the as~ment, the original order goes and all steps already taken for the recovery of the demand become null and void and that in such cases it is the duty of the income-tax officer to i~e a fresh notice of demand in tlie prescribed form and serve it upon the assessee though the judgment is with reference to the indian income-tax act, 1922, which has been tepealed but kept alive only for some limiied purposes, the same interpretation may hold good with respect to the corresponding provisions in the ineome-tax act, 1961, and in the other acts relating to the imposition of direct taxes 2 the above decision of the supreme court will create difficulties in the 'collection of income-tax andjother direct taxes the number of assessments involved in the arrear demands of the direct taxes is nearly 6 lakhs and recovery certificates have been issued to collectors or tax recovery offtcers in approximately 2,25,000 cases and the revenue involved comes to rs 157 crores in view of the above decision of the supreme court, in mast of these cases, fresh notices of demand may have to be served upon the assessees and the assessees will have to be allowed a further period for paying the tax it will be only after the expiry of the said period that fresh proceedings for recovery can be started the result would be that recalcitrant assessees would get sufficient time to withdraw their funds or alienate their properties with a view to defeating the c'laims of revenue 3 in order to overcome these difficulties, it is proposed to provide that in such cases, it shall not be necessary to take proceedings afresh or to serve fresh notices of demand except that in the case of an enhancement of assessment, another notice of demand shall be served upon the assessee with respect to the amount by whiah the assessment has been enhanced opportunity has also been taken to provide for certain matters which are ancillary to the above proposa1 t t krishnamachari new delhi; the 23rd april, 1964 '-r-" l •••  president's recommeni>ation 'onner aaticles 117 ant) 274 of the constitution of india[copy of letter dated the 25th april, 1964 from shri t t kriabnamachari, minister of finance to the secretary, lok sabha] - - - - - the president having been informed of the subject matter of the proposed taxation laws (continuation of recovery proceedings) bill, 1964 has recommended under articles 117 (1) and (3) and 274 (1) of the constitution the introduction of the said bill in the lak sabha the bill seeks to provide for the continuation and validation of recovery proceedings in relation to certain government dues some expenditure on the administration of the act may be involved, the extent of which cannot be foreseen at present ,  ' clauae '1 of the bill empc>weri the cedtral government to make rulei for carryinl out the purpoees of the act the matters with 1'tiiilpect to which rules may be made are only matters of procedure add administrative detail the delegation of legislative power is thua of - normal character :  '\ a bill to provide for the continuation and validation of proceeddings in relation to government dues and fur matters connected therewith (shri tt k~ m  t/p  ) 