HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
H. L. Sud, Income-tax Officer, Bombay v. Tata Engineering & Locomotive Co. Ltd., Bombay
Civil Appeals Nos. 688 and 689 of 1968
[1969] 2 SCR 21 ·
Indian Income-tax Act, 1922: sections 18A, 29, 42 and 43 · Constitution of India: Article 226
Sources & disclosures includedDownload original judgment / order
3-judge bench; unanimous judgment delivered by V. Ramaswami, J. · J. C. Shah, J. · V. Ramaswami, J. · A. N. Grover, J.
Assessment years: 1962-63
01 · Facts of the case
TELCO manufactured vehicles and locomotives in collaboration with Daimler Benz A.G. and Krauss Maffei A.G. For assessment years 1955-56 through 1961-62, the Income-tax Officer served section 43 notices and formally appointed TELCO statutory agent of the German firms. For 1962-63 he made no such notice or order, yet in September 1961 issued section 29 demands with section 18A(1) orders seeking advance tax of Rs.90,833.29 for Krauss and Rs.6,32,629.62 for Daimler from TELCO as agent. TELCO denied liability; after the Commissioner rejected its representation, the Bombay High Court quashed the demands and restrained enforcement, and the Income-tax Officer appealed (SCR pp.22-23; PDF pp.2-3).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
Sections 18A, 42 and 43 imposed advance-tax and statutory-agent liabilities within the 1922 Act's annual assessment scheme. A section 43 appointment could be used 'for all purposes' of the assessment year for which it was made, including imposing, quantifying and recovering liability, but could not carry forward vicarious liability into another assessment year. Although advance tax was charged during the current financial year, it related to the subsequent assessment year's liability (SCR pp.23-27; PDF pp.3-7). There was no section 43 notice, hearing opportunity or formal appointment of TELCO as agent for 1962-63. Because circumstances could change and allow a person to resist agency in a later year, notice and appointment were required afresh for each assessment year (SCR pp.27-28; PDF pp.7-8).
Source: Primary judgment: discussion
03 · Judicial decision
The Court held the 1962-63 demands illegal and ultra vires because TELCO had not been appointed statutory agent for that assessment year. It affirmed the Bombay High Court's certiorari, dismissed both appeals with costs and directed one set of hearing fee (SCR p.28; PDF p.8).
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of Tata Engineering & Locomotive Co. Ltd./respondent. The prior-year agent appointments could not support the challenged 1962-63 advance-tax demands (SCR pp.27-28; PDF pp.7-8).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: before imposing representative or vicarious tax liability, match each notice, hearing and appointment order to the exact taxpayer, non-resident, income stream and assessment year, then link the demand to that valid appointment. Do not assume a prior-year status automatically continues where the statute makes the proceeding annual. The present-day result must be tested against the current provisions and later case law; this 1922 Act ruling supplies no current-law clearance (based on SCR pp.27-28; PDF pp.7-8).
Source: Primary judgment: reviewPoint
Source & verification
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Statutory scope
The decision construes the annual assessment, statutory-agent and advance-tax provisions of the repealed Indian Income-tax Act, 1922. It does not establish the procedure or liability under current non-resident representative-assessee, withholding, advance-tax or recovery provisions. No current-law or later-treatment clearance was undertaken.
Later treatment
Source checked 2026-10-11. Later judicial treatment and current statutory applicability have not been comprehensively checked; no current-law or citator clearance is represented.
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