ivil Appeal No 1031 of 1979 etcetc
From the Judgment and Order dated 2324111977 of the Bombay High Court in Sales Tax Reference No 92 of 1976
SK Dholakia SM Jadhav and AS Bhasme for the Appellants
Vinod A Bobde Ms AK Verma UA Rana PG Gokhale Ms Sangeeta Aggarwal and DN Mishra for the Respondents
The Judgement of the Court was delivered by RANGANATHANJ These are appeals by the Revenue arising out of proceedings under the Bombay Sales Tax Act 1959 hereinafter called the Act 
The respondents Bharat Petroleum Corporation Ltd in CA 1031 of 1979 and Phulgaon Cotton Mills Ltd in the four other appeals are assessees to sales tax
They claimed a set off against the sales tax payable by them for the years in question of certain sums invoking the provisions of rules 41 and 41 A framed under the Act as they stood at the relevant time
As the wording of these rules in so far as it is material for our present purposes is identical and the basis of the claim was also common it will be convenient to dispose of both sets of appeals by a common judgment and we proceed to do so
The set off claimed by the assessees was in terms of section 42 and rules 41 and 41A which may now be referred to  1 Section 42 reads thus  42Draw back set off refund etc
The State Government may provide by rules that ain such circumstances and subject to such conditions as may be specified in the rules a draw back set off or refund of the whole or any part of the tax i xx xx xx ii paid or levied or leviable in respect of any earlier sale or 812 purchase of goods under this Act or any earlier law be granted to the purchasing dealer  b xx xx xx The State Government has notified various rules from time to time in exercise of this power which are collected in Chapter VII of the Rules
Of these we are concerned with rules 41 and 41A 2 Rule 41 omitted wef 24681 was a very long rule containing several clauses
In so far as is relevant for our present purposes it was in the following terms 41
Drawback set off etc
of tax paid by a manufacturer In assessing the amount of tax payable in respect of any period by a Registered dealer who manufactures taxable goods for sale hereinafter in this rule referred to as the Manufacturing dealer   the Commissioner shall grant to him a draw back set off or as the case may be a refund of the aggregate of the following sums that is to say  a xx xx xx aa xx xx xx b xx xx xx bb xx xx xx c xx xx xx cc xx xx xx d xx xx xx e a sum recovered from the Manufacturing dealer by another registered dealer by way of sales tax or general sales tax or both as the case may be on the purchase by him of goods from such registered dealer being goods specified in schedule C to the Act other than in entries 1 to 11both inclusive and 15 therein and in Schedule D other than in entries 1 to 4 both inclusive 813 therein and in Schedule E other than in entries 1 and 2 therein when the purchasing dealer did not hold a recognition or when the dealer held a recognition but effected the purchase otherwise than against a certificate under section 12 of the Act provided that such goods are used by him in the manufacture of taxable goods for sale or in the packing of taxable goods manufactured by him for sale
Explanation  xx xx xx Material portions Underlined 3 The relevant portion of rule 41A which has been invoked in the case of Phulgaon Cotton Mills Ltd reads thus  41A1 Drawback set off etc
of tax paid by a manufacturer in respect of purchases made on or after the 15th July 1962  In assessing the amount of tax payable in respect of any period by a Registered dealer who manufactures taxable goods for sale or export hereinafter in this rule referred to as the manufacturing dealer   the Commissioner shall in respect of the purchases made by such dealer on or after the 15th July 1962 of any goods specified in Schedule B C D or E and used by him within the State in the manufacture of taxable goods  which have in fact been sold by him and not given away as samples or otherwise or which have been exported by him or used by him in the packing of goods so manufactured grant him a draw back set off or as the case may be a refund of the aggregate of the following sums that is to say a a sum recovered from the manufacturing dealer by other Registered Dealers by way of sales tax or general sales tax as the case may be both on the purchase by him from such registered dealers when the manufacturing dealer did not hold a Recognition or when he held a recognition but effected the  The words or export  were inserted by a notification dated 31870
 The words which have in fact so manufactured  were substituted by a notification dated 1511976 for the words for sale or export or in the packing of goods so manufactured for sale or export  
814 purchase otherwise than against a certificate under section 11 of the Act b xx xx xx c xx xx xx d xx xx xx Material portions underlined 4There was also a claim under rule 43AB but we are not concerned with that in the present appeals
Now to turn to the facts which give rise to these appeals
ABurmah Shell The Bharat Petroleum Corporation Ltdis before us as the successor in interest of the Burmah Shell Refineries Ltd which is the assessee with which we are concerned
We shall refer to it as the refinery to distinguish it from the Burmah Shell Oil Storage and Distributing Company of India Ltd which will be briefly referred to hereinafter as the Marketing company 
We are concerned with the period from 111961 to 31121961
The refinery registered itself as a dealer  under the Act and possessed a recognition certificate under section 25after having failed in a plea raised in earlier assessment years that it was not a dealer  and was not required to be registered as such
It had entered into a contract with the marketing company under which it agreed to process and refine crude oil belonging to the marketing company and manufacture kerosene for it
This contract was in the nature of a bailment by the marketing company to the refinery the refinery taking the crude oil and returning it after purification as refined kerosene
For the performance of this task it received payments from the manufacturing company by way refining charges on the basis of the job work done from time to time
The refined kerosene was eventually sold by the marketing company and the refinery had nothing to do with the sales
It may be mentioned here that there was no sales tax payable on sales of kerosene till 3131961 but it became liable to sales tax thereafter
For the above purification process the refinery needed to use 815 sulphuric acid
During the calendar year 1961 it purchased 3048760 MT of acid for Rs 352742 from Dharmsi Morarji Chemical Co Ltdhereinafter referred to as Dharmsis   under an agreement dated 961955 which was to remain in force for a period of ten years from 111966 Sic
On the sulphuric acid it so purchased a sales tax of Rs1342115 Rs1510772 according to the High Court was recovered from it by Dharmsis as the refinery did not purchase it on the strength of the recognition certificate held by it as the certificate could have been utilised only if the goods purchased had been intended to be used by it in the manufacture of goods for sale by itself whereas the manufactured kerosene was sold by the marketing company
When the sulphuric acid was used in the refining process the crude oil got refined and purified but the impurities therein precipitated into the acid and yielded acid sludge  
The refinery s contract with Dharmsis provided that the acid sludge should be sold by the refinery to the Dharmsis which apparently had its own uses for the sludge
Accordingly the refinery sold 3541985 MT of acid sludge during the relevant period for Rs68108 the correctness of this figure was unsuccessfully contested before the High Court and on this amount it paid sales tax
The record does not show the amount of sales tax paid by the refinery on this account but having regard to the nature of the commodity and turnover involved it must admittedly have been a very small amount
Having done this the refinery claimed that as against the sales tax paid by it for the period in question including the tax paid on the acid sludge it was entitled to a set offand a refund if need be of the amount of Rs 1342115 paid by it as sales tax on its purchases of sulphuric acid
Its argument is that it is entitled to this refund as all the conditions set out in clause e rule 41 were fulfilled this wise  a It is a manufacturer  as the process of refining carried out by it falls within the wide definition of manufacture  contained in s217 of the Act viz  217 manufacture  with all its grammatical variations and cognate expressions means producing making extracting altering ornamenting finishing or otherwise treating or adapting any goods but does not include such manufactures or manufacturing processes as may be prescribed  
816 It is also a Registered dealer
b It manufactured taxable goods for sale
The acid sludge manufactured by it was taxable throughout the year and the pure kerosene manufactured by it was taxable wef
1 4 1961 onwards
c Tax had been recovered from it on its purchases of sulphuric acid from Dharmsis who are Registered dealers as the purchases had not been effected on the basis of a recognition certificate
The Sales Tax Officer allowed the set off only to the extent of Rs 110140 without giving any details as to the manner in which this figure had been arrived at
On appeal the Appellate Assistant Commissioner held that the assessee was entitled to no set off at all under rule 41 as what was manufactured by the assessee was kerosene and not acid sludge and the kerosene was sold not by the assessee manufacturer but by some other company
The Appellate Tribunal however allowed the assessee s claim in full and its view was upheld on reference by the High Court
Hence the present appeal
BPhulgaon Cotton In the case of Phulgaon Cotton Mills we are concerned with four accounting periods  1 7 73 to 30 6 74 1 7 74 to 30 6 75 1 7 75 to 30 6 76 and 1 7 76 to 30 6 77
The issue as to the application of rule 41A arises in the following circumstances
The assessee purchased raw unginned cotton from agriculturists and unregistered dealers
The cotton was ginned yielding ginned cotton and seeds
One of the issues raised in the assessments was as to whether purchase tax should be paid on the total value of the raw cotton purchased or on the said purchase price less the value of the cotton seeds obtained therefrom
This question was answered against the assessee and is no more in issue before us
The assessee manufactured yarn and cloth from the ginned cotton
Besides cotton and yarn cotton waste and yarn waste were also obtained in the course of the manufacture and these were also sold by the assessee
Some quantity of the fabrics produced by the assessee were also exported
817 During the periods 1 7 73 to 30 6 74 and 1 7 74 to 30 6 75 the assessee had paid sales tax on the purchase value of the entire raw cotton purchased by it
It therefore claimed a set off under rule 41A of the purchase tax so paid as it had to pay sales tax on the yarn and cotton waste sold by it
It also claimed set off under rule 43AB in respect of the three periods other than between 1 7 74 and 30 6 75 but we are not concerned with this claim
The Sales Tax Officer allowed only partial relief to the assessee under rule 41A
He permitted a set off not of the entire purchase tax paid by the assessee on the raw cotton purchased by it but only of a part thereof proportionate to the extent of yarn sales
The Appellate Tribunal however upheld the contention of the assessee
It allowed a set off of the entire purchase tax paid by the assessee on the raw cotton machinery and other purchases which had been used in the process of manufacture of cotton waste
In doing so it followed the principle of the decision of the High Court in the case of Burmah Shell Refineries 1978 41 STC 337
It observed  21 When the raw cotton is ginned or ginned cotton is used in the process of manufacturing yarn there is bound to be cotton waste
In view of these facts the appellant will also be entitled to full set off so far as the purchases of cotton are concerned which have resulted in the production of taxable commodity ie cotton waste
Each and every ounce of cotton is used in the manufacture of cotton waste which is a taxable commodity
The question of therefore allowing proportionate set off so far as the purchases of cotton or machinery which are used in manufacturing of cotton waste does not arise
The appellant is entitled to full set off so far as purchases of cotton machinery and other purchases which are used in the manufacture of cotton waste a taxable commodity
There is no conflict in the decisions given by the Tribunal in earlier rulings given in the appellant s own cases
No such argument of production of cotton waste by product simultaneously was canvassed
All that was canvassed was that yarn waste was a taxable by product
Hence full set off on purchase of cotton be allowed
Tribunal negatived this contention by pointing out that there is no simultaneous production of yarn and cloth
First yarn is manufactured and then cloth
Thus question of referring this issue to larger Bench does not arise
The cases will have 818 therefore to go back to the Assistant Commissioner for deciding the quantum of set off admissible under Rule 41 A on these basis for all the periods The Tribunal however directed that the deductions should be so allowed as not to result in a double deduction of the same amount of purchase tax
Aggrieved by the order of the Tribunal the Commissioner of Sales Tax filed petitions for special leave to appeal to this Court therefrom as no useful purpose would be served by approaching the High Court on reference in view of the decision of that Court in the Burmah Shell Refineries case on the point at issue having gone against the Revenue
Leave was granted by this Court on 3 9 90 and hence the four civil appeals by the Revenue in the case of Phulgaon Cotton Mills Limited
Before dealing with issue on the interpretation of rules 41 and 41A which has been debated before us we wish to point out the difficulties encountered by us as the facts in the case of Phulgaon Cotton Mills are not quite clear from the record
From the Tribunal s order it is seen that during the periods 1 7 75 to 30 6 76 and 1 7 76 to 30 6 77 the assessee purchased no raw cotton from unregistered dealers and no purchase tax was levied thereon
Nevertheless some relief under rule 41A was allowed by the Officer in the assessments for these periods as well
The basis on which a claim was made and partially allowed under rule 41A in respect of these periods is not known
Also the Tribunal has allowed full relief on the basis that since cotton was used in the manufacture of cotton waste the assessee was entitled to relief in respect of purchase tax paid on raw cotton though for these years there was no such tax
But the order of the Tribunal refers also to set off so far as purchases of machinery and other purchases   indicating that perhaps some purchase tax had been paid in respect of those purchases and set off had been sought in respect thereof
But even assuming this the discussion regarding cotton waste appears to be pointless since admittedly the yarn manufactured was liable to sales tax and on the Tribunal s reasoning this was sufficient to enable the assessee to claim set off of the purchase tax paid on cotton machinery and other materials used in the manufacture
But these aspects have not been touched upon before us
The arguments before us as we shall refer presently revolved round a very simple issue
We shall discuss this issue 819 and leave the other aspects touched upon above to be clarified if need be when the assessment is finally redone in the light of our judgment
Shri Dholakia learned counsel for the State of Maharashtra submits that the issue in these appeals is a very simple one
Rules 41 and 41A are intended to give relief to a dealer in respect of purchase of goods which are used in the manufacture of taxable goods for sale the clear idea being that where the manufactured goods will also be liable to sales tax in the hands of the manufacturer there should be a relief of the taxes paid by him on the goods purchased by him for use in such manufacture so as to avoid double taxation
In the Bharat Petroleum case the manufactured goods viz pure kerosene were neither sold by the respondent so as to attract sales tax in his hands nor indeed liable to sales tax at all for the first three months
So also in the case of Phulgaon Cotton Mills the cotton purchased on payment of tax was used for the manufacture of cloth which was not liable to sales tax
A set off cannot be allowed merely because a bye product or waste product viz the acid sludge in the one case and the cotton waste in the other was sold for a nominal turnover which was subject to tax
Even assuming that the sulphuric acid or cotton purchased can be said to have been used for the manufacture of two commodities viz kerosene and acid sludge in the one case and cloth and cotton waste in the other the set off under the rules relied upon should be split up proportionately and allowed only to a proportionate extent the proportion being decided on the basis of the respective turnovers of the taxable and non taxable goods
He submits that though the rules do not specifically provide for such a bifurcation an apportionment of such nature is almost invariably implicit in a tax law and is also consonant with the object and purpose of the rules
He therefore submits that the High Court and Tribunal ought to have restricted the relief only to a proportionate extent as done by the sales tax officer
He points out that the basis on which the apportionment was made by the officer had not been specifically challenged before the appellate authorities and is not in issue before us
On the other hand Sri Bobde learned counsel appearing for Bharat Petroleum laid stress on two aspects of the rule
First he points out that under the rule it is not a requirement that the manufactured goods have to be sold by the manufacturing dealer himself
The fact is that the kerosene constituted taxable goods after 1461 and was sold by the marketing company
The second aspect of the rule is that admittedly the 820 sulphuric acid purchased was wholly used in the manufacture of two items kerosene and acid sludge one of which viz the sludge was taxable and also subjected to tax
Once this condition is fulfilled the amount of set off is specified in the rule itself as the amount of purchase tax paid on the goods so used and cannot be scaled down proportionately merely because according to the department the turnover of the taxable goods is insignificant
Sri Rana learned counsel appearing for the Phulgaon Cotton Mills adopts this argument mutatis mutandis
We have given deep thought to these contentions and we have come to the conclusion that plausible and attractive as the argument urged on behalf of the State is the conclusion arrived at by the High Court and the Apellate Tribunal has to be upheld
But before dealing with this aspect we may dispose of two minor questions
The first which arises in the Bharat Petroleum case is whether rule 41 contemplates that the goods purchased by the dealer should be used for manufacture of taxable goods for sale by him
The High Court has given good reasons with which we are inclined to agree for holding that no such restrictions can be read into this rule but this contention is of no significance in view of our conclusion that the assessee would be entitled to the set off claimed even on the basis of the taxable sales of acid sludge effected by it
The other point is whether the assesees can be said to manufacture acid sludge   and cotton waste   respectively
It is suggested for the State that the assessees are purchasing acid and cotton for the manufacture of kerosene and yarncloth respectively and it is ludicrous to suggest that the assessees are purchasing sulphuric acid and cotton for manufacturing acid sludge and cotton waste
Put like that the assessee s contention seems a little artificial
But the contention is not really absurd
For the assessees do purchase sulphuric acid and cotton for use in a manufacturing process which yields not only kerosene and yarncloth but also acid sludge and cotton waste
As pointed out in State of Gujarat vs Raipur Manufacturing Co Ltd
1967 19 STC1 where a subsidiary product is turned out regularly and continuously in the course of a manufacturing business and is also sold regularly from time to time an intention can be attributed to the manufacturer to manufacture and sell not merely the main item manufactured but also the subsidiary products
There is also no evidence on record to suggest at least so far as acid sludge is concerned that it is not a commercial commodity with a market but an item of waste
The contract with Dharmsis speaks to the contrary and moreover as pointed out by the High Court the assessee had been 821 practically compelled by the Department to apply for and obtain a recognition certificate for the manufacture of sludge and it had also paid tax as dealers in acid sludge
These two contentions have therefore to be rejected
Turning now to the main question we are inclined to agree with respondents  counsel that they are entitled to a set off of the entire tax paid by them on the purchases of sulphuric acid and cotton respectively
The only condition under the rule is that the goods purchased on payment of tax should have been used in the manufacture of taxable goods for sale
Their concurrent user for the manufacture of another item of goods which may or may not be taxable is immaterial though we may point out that in the Bharat Petroleum case the kerosene was also taxable for nine months in the year and in the case of Phulgaon Cotton Mills yarn was also manufactured and it was subject to tax
Sri Dholakia contends for an implicit principle of apportionment on the basis of turnovers of various items of goods manufactured and restriction of the quantum of set off to a proportion based on the turnover of taxable goods to the total turnover
He cited certain decisions under the Income tax and Sales Tax Acts in support of this contention  Anglo French Textiles vs CIT  SC Tata Iron  Steel Co vs State  and Best  Co vs CIT1966  SC We do not think these cases are of assistance
The first two cases dealt with the question as to when profits and gains can be said to accrue or arise in a manufacturing business and the third held that when a receipt is a composite one of capital and revenue nature it is open to the Revenue to apportion the same and bring the latter to tax
These are situation in which the taxable element is severable
Under the rules presently under consideration also situations are conceivable where such severance is implicit
For instance suppose the cotton purchased is utilised partly for manufacture of cloth that is taxable and part for manufacture of cloth that is not taxable or partly for the manufacture of yarn which is taxable and is sold and partly for manufacture of cloth which is not taxable
In these instances it is clear that only some of the cotton is utilised for the first purpose and some for the second purpose and so only the purchase tax paid in respect of the quantity utilised for the first purpose will be eligible for set off
But the type of user with which we are concerned is a composite one in which it is not possible to correlate any part of the purchased goods as having gone in for the purpose of manufacture of taxable goods
The position is picturesquely brought out in 822 the case of Bharat Petroleum
The entire sulphuric acid purchased has no doubt been used in the manufacture of kerosene though perhaps not a drop of acid clings to the kerosene manufactured
Equally the entire sulphuric acid has gone into the composition of the acid sludge
The 3048760 MT of acid have dissolved the impurities in the crude oil and conglomerated with them to constitute 3541485 MT of acid sludge
Having regard to the nature of the interactions here it is incontrovertible that the entire sulphuric acid purchased has gone into the manufacture of the sludge
The rules do not require that the purchased goods must have been used only for the manufacture of taxable goods for sale
In this situation it is not possible to cut down the quantum of relief clearly outlined in the rule on the basis of some general principle claimed to underlie the provision
As Sri Bobde rightly pointed out the basis for the relief provided is not very clear cut
Various reliefs have been provided in a group of rules which come in for application in various situations
The relief may be based on the principle that the manufactured product is taxed either in the hands of the same assessee or in someone else s hands or that the manufactured goods are exported which may yield no tax but earn foreign exchange or even that the purchases are utilised for manufacture of goods in the State thus contributing to the industrial development of the State
It is therefore difficult to read into the provision a quantitative correlation of the goods resulting in a taxable turnover and the purchases of raw materials on which tax has been paid
In this background the straight forward answer to the question raised lies in the literal interpretation of the language of the rules without straining to discover some doubtful principle for denying relief
For the above reasons we agree with the view taken by the High Court and followed by the Tribunal and dismiss these appeals
We however make no order regarding costs


Summary:
The Plaintiff respondent instituted a suit for recovery of Rs13972286 against the defendants appellants
When evidence was being recorded in the suit proceedings the plaintiff obtained summons from the court requiring the Income Tax Department to produce in the court records relating to the income tax assessment of the defendants for the assessment years 1964 65 to 1971 72
The Income Tax Officer produced the record in a sealed cover
The plaintiff also obtained summons requiring the Income Tax Officer to produce the income tax record relating to two other assessees which was produced in the Court by the Department in a sealed cover with a submission that no disclosure of information regarding income tax 546 pertaining to an income tax assessee could be made
The plaintiffs in the meanwhile filed in the court a number of certified copies of the accounts of the defendants which he had obtained from the Income Tax authorities and sought permission of the Court to tender the certified copies in evidence
Before a Single Judge of the High Court on the question of privilege as claimed by the Income Tax Department arguments were addressed by the parties
The following three questions were referred to the Full Bench i What is the position of law relating to privilege prior to 1964 ii What is the position of law relating to privilege after 1964 and iii What is the effect of the production of certified copies relating to income tax assessment records and how far certified copies can be admitted in evidence The Full Bench answered the first and second questions sustaining the claim of the privilege by the Income Tax Department and the Full Bench did not express any opinion on the third question
Against the judgment of the Full Bench of the High Court appeal was filed by special leave
The controversy before this Court was confined to the finding of the High Court relating to the claim of privilege for the production of documents which were filed after the repeal of Section 137 with effect from 141964 in respect of assessment years 1964 65 onwards
The appellants defendants contended that after the repeal of Section 137 of the Income Tax Act 1961 by the Finance Act 1964 there was no longer any impediment left in the way of a civil court to summon the production of documents filed by an assessee during the assessment proceedings before an Income Tax Officer after 141964 in respect of assessment years 1964 65 onwards and that the finality attached to an order of the Commissioner with regard to claim of privilege under Section 1381b had no relationship to the power of the court to summon that record
Allowing the appeal of the defendants appellants this Court 547 HELD101
Section 54 of the Income Tax Act 1922 and after its repeal Section 137 of the Income Tax Act 1961 had only placed fetters on the exercise of the jurisdiction in respect of the specified documents by the courts notwithstanding anything contained in any other law for the time being in force
The exercise of the jurisdiction to seek production of documents had only been put under a cloud in so far as the record of assessment is concerned
560E 102
With the repeal of the 1922 Act and omission of Section 137 of the 1961 Act the fetters on the exercise of the jurisdiction were removed with the result that the exercise of jurisdiction to call for the production of documents relevant to the case pending before the court even from the income tax authorities revived
560E F 103
Neither Section 54 of the 1922 Act nor Section 137 of the 1961 Act had taken away for all times the jurisdiction of the courts to call for the record from the Income Tax authorities
Those provisions had only put the exercise of that jurisdiction under a cloud and those fetters were coterminous with the life of Section 54 of the 1922 Act or Section 137 of the 1961 Act
560F G 201
Clause b of Sub Section 1 of Section 138 is limited in its scope and application
Under it any person can make an application to the Commissioner for any information relating to an assessee in respect of any assessment made either under the 1922 Act or under the 1961 Act on or after the 1st April 1960 and the Commissioner of Income Tax has the authority to furnish or cause to be furnished the information asked for on being satisfied that it is in the public interest so to do and such an order of the Commissioner is final and cannot be called in question in any court of law
The Commissioner of Income Tax under this clause performs only an administrative function on his subjective satisfaction as to whether it is in the public interest to furnish the information or not to any person seeking such information and his decision in that behalf is final and the aggrieved person cannot question it in a court of law
By enacting this provision the legislature could not be said to have intended that the Commissioner of Income Tax would have the authority to sit in judgment over the requisition Judicial order made by a court of law requiring the production of record of assessment relating to an assessee in a case pending before the court
562H 563D 548 202
When a court of law in any matter pending before it desires the production of record relating to any assessment after applying its judicial mind and hearing the parties and on being prima facie satisfied that the record required to be summoned is relevant for the decision of the controversy before it it passes a judicial order summoning the production of that record from the Party having possession of the record
The Commissioner of Income Tax cannot therefore refuse to send the record as he certainly is not authorised to set at naught a judicial order of a court law
He must obey the order of the court by sending the record to the court concerned
563D F 203
It is open to the Commissioner of Income Tax to claim privilege in respect of any document or record so summoned by a court of law under Sections 123 and 124 of the and even then it is for the court to decide whether or not to grant that privilege
Had the legislature intended that no document from the assessment record of an assessee should be produced in a court on being summoned by it without the approval of the Commissioner of Income Tax it would have said so in Section 138 of the Act itself
563F G 204
The repeal of Section 137 of the Act clearly discloses the legislative intent that it was felt by the legislature that it was no more necessary to keep the records of assessment by the Income Tax Department relating to an assessee as confidential from the courts and the bar with regard to the production of any part of the record was removed in so far as the courts are concerned
The finality which has been attached to the order of the Commissioner under Section 1381b of the Act is restricted to the cases where the information etc
as contemplated by the section is called for by any person other than a court of law by a judicial order
563G 564A 205 The finality which has been attached to the order of the Commissioner under Section 1381b of the Act is applicable only in cases where application is made to the Commissioner by a party or any other person for receiving documents or information
It has nothing to do with the powers of the courts to summon the production of assessment record of an assessee filed after 141964
The privilege as to secrecy which the assessee had acquired under Section 54 of the 1922 Act remained unimpaired by the repeal of that Act or even by the omission of Section 549 137 of the 1961 Act in respect of record filed prior to 141964 and relating to the assessments prior to that date
That privilege did not extend after April 11964
to record filed before the income tax authorities for the assessment years 1964 65 onwards
560H 561B 206
Section 1381b does not effect the powers of the courts to require the production of assessment records or the disclosure of any information therefrom to it in a case pending before the court when the court by a judicial order requires the production of the record considered relevant by it for decision of a case pending before it
564B C 207
The High Court therefore fell in error in holding that the assessment records of an assessee filed before the income tax authorities even after April 11964 are immune from production in a court of law on summons for their production being issued by the court and that the disclosure of any information from the record even to the courts is subject to the veto powers of the Commissioner of Income Tax
564B 301
Section 6 of the General Clauses Act as well as Section 138 1b of the 1961 Act cannot extend the ban on the exercise of the jurisdiction by the courts to summon the production of documents from the income tax authorities after April 11964 relating to assessment year 1964 65 in respect of the record filed after April 11964
561B C 302
Section 6 of the General Clauses Act provides that the repeal of any enactment unless a different intention appears shall not affect any right privilege obligation or liability acquired accrued or incurred under the repealed enactment
561F 303 The general principle is that an enactment which is repealed is to be treated except as to transactions past and closed as if it had never existed
The assessee had acquired no right or privilege under the repealed Act since the provision is only a procedural restriction and did not create any substantive right in the assessee in respect of assessments for the period after the omission of Section 137 of the 1961 Act
Thus reliance placed on the provisions of Section 6 of the General Clauses Act to hold the continuation of the ban on the exercise of jurisdiction by the courts was misplaced
561H 562B 304
In respect of the documents filed after the omission of Section 550 137 of the 1961 Act  with effect from April 11964 relating to assessments for the period 1964 65 onwards no right privilege obligation or liability can be said to have been acquired accrued or incurred prior to the omission of Section 137 of the Act
561F G 305 The ban contained in Section 137 of the 1961 Act on the exercise of the powers of a civil court to call for production of documents etc
could not be said to have continued to exist in matters arising subsequent to the omission of that Section with effect from April 1 1964 and that ban came to an end in respect of the period after April 1 1964
561G 4
After the repeal of Section 137 of the act there is no longer any impediment left in the way of a court to summon the production of documents filed by an assessee before the income tax authorities after April 11964 relating to assessment proceedings for 1964 65 onwards and that the finality attached to an order of the Commissioner under Section 138 1b has no relevance to the exercise of powers by a court to summon the production of documents in a case pending before the Court
564D E