Appeal No122 of 1956
Appeal from the judgment and order dated March 5 1954 of the Bombay High Court in Appeal from its Original Jurisdiction Misc
Application No 1 of 1954
H N Sanyal Addl
Solicitor General G N Joshi and R H Dhebar for the appellants
N A Palkhivala section N Andley J B Dadachanji P L Vohra and Rameshwar Nath for the respondent
April 28
The Judgment of the Court was delivered by GAJENDRAGADKAR J
This is an appeal by the Income tax Officer Companies Circle I 1 Bombay and the Union of India and it raises a short question about the construction of section 35 of the Income tax Act read with section 1 sub section
2 and section 13 of the Indian Income tax Amendment Act 1953 XXV of 1953
It arises in this way
The Income tax Officer by his assessment order made on October 9 1952 for the assessment year 1952 53 assessed the respondent the Bombay Dyeing and Manufacturing Co Ltd under the Act
In the said assessment order the respondent was given credit for Rs 50603 15 0 as representing interest at 2 on tax paid in advance under section 18A of the Act
This credit was given to the respondent in pursuance of the provisions contained in section 18A sub section
5 of the Act as it then stood
On May 24 1953 the Amendment Act came into force
Section 1 sub section
2 of the Amendment Act provides that  subject to any special provision made in this behalf in the Amendment Act it shall be deemed to have come into 705 force on the first day of April 1952 
By section 13 of the Amendment Act a proviso was added to section 18A 5 of the Act
The effect of the amendment made by the insertion of the said proviso to section 18A 5 was that the
assessee was entitled to get interest at 2 not on the whole of the advance amount of tax paid by him as before but only on the difference between the payment made and the amount at which the assessee was assessed to tax under the regular assessment under section 23 of the Act
After the Amendment Act was passed the first appellant exercised his power under section 35 of the Act and purported to rectify the mistake apparent from the record in regard to the credit for Rs 50603 15 0 allowed by him to the assessee
The first appellant held that the assessee was really entitled to a credit of only Rs 21157 6 0 by way of interest on tax paid in advance as a result of the retrospective operation of the amendment made in section 18A 5 by the Amendment Act
In accordance with this order a notice of demand under section 29 of the Act was issued against the assessee for the sum of Rs 29446 9 0 on the ground that the assessee had been given credit for this excess amount through mistake
Aggrieved by this notice of demand the respondent filed a petition in the High Court of Bombay on January 4 1954 under article 226 of the Constitution praying for a writ against the appellants inter alia prohibiting them from enforcing the said rectified order and the said notice of demand
It appears that this petition was admitted by Tendolkar J on January 6 1954 and a rule issued on it
Thereafter the said petition was referred to a Division Bench by the Hon ble the Chief Justice for final disposal
Accordingly on March 5 1954 the petition was heard by Chagla C J and Tendolkar J and a writ was issued against the appellants
The High Court held that section 35 of the Act had no application to the facts of the case because the mistake apparent from the record contemplated by the said section is not a mistake which is the result of the amendment of the law even though the amending law may be retrospective in operation
In other words in the opinion of the High Court the 706 mistake mentioned by section 35 had to be apparent on the face of the order and it can only be judged in the light of the law as it stood on the day When the order was passed
The appellants then applied for and obtained a certificate from the High Court on October 8 1954 on their behalf it is urged  that the High Court of Bombay has erred in law in taking the view that the appellant No I was not entitled to rectify the mistake in question under section 35 of the Act
Thus the short question which arises before us in the present appeal is whether an order which was proper and valid when it was made can be said to disclose a mistake apparent from the record if the said order would be erroneous in view of a subsequent amendment made by the Amendment Act when the Amendment Act is intended to operate retrospectively  It is unnecessary to refer to the provisions of section 18A 5 as well as the provision of the proviso which was subsequently added by section 13 of the Amendment Act
It is common ground that in the absence of the subsequently inserted proviso the assessee would be entitled to obtain a credit for Rs 50603 15 0
It is also common ground that if the subsequently inserted proviso covered the assessee s case he would be entitled to a credit only of Rs 21156 9 0
It is thus obvious that the order giving the relevant credit to the assessee was valid when it was made and that it would be erroneous under the subsequent amendment
Under these circumstances was the first appellant justified in exercising his power of rectification under section 35 of the Act  In deciding this question it would be necessary to determine the true legal effect of the retrospective operation of the Amendment Act
Section 1 sub section
2 of the Amendment Act expressly provides that subject to the special provisions made in the said Act it shall be deemed to have come into force on the first day of April 1952
The result of this provision is that the amendment made in the Act by s 13 of the Amendment Act must by legal fiction be deemed to have been included in the principal Act as from the first of 707 April 1952 and this inevitably means that at the time when the Income tax Officer passed his original order on October 9 1952 allowing to the respondent credit for Rs 50603 15 0 the proviso added by section 13 of the Amendment Act must be deemed to have been inserted in the Act
As observed by Lord Asquith of Bishopstone in East End Dwellings Co Ltd vs Finsbury Borough Council 1  if you are bidden to treat an imaginary state of affairs as real you must surely unless prohibited from doing so also imagine as real the consequences and incidents which if the putative state of affairs had in fact existed must inevitably have flowed from or accompanied it
One of those in this case is emancipation from the 1939 level of rents
The statute says that you must imagine a certain state of affairs it does not say that having done so you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs 
Thus there can be no doubt that the effect of the retrospective operation of the Amendment Act is that the proviso inserted by the said section in section 18A 5 of the Act would for all legal purposes have to be deemed to have been included in the Act as from April 1 1952
But it is urged for the respondent that the retrospective operation of the relevant provision is not intended to affect completed assessments
It is conceded that if any assessment proceedings in respect of the assessee s income for a period subsequent to the first of April 1952 were pending at the time when the Amendment Act was passed the proviso inserted by section 13 would govern the decision in such assessment proceedings but where an assessment proceeding has been completed and an assessment order has been passed by the Income tax Officer against the assessee such a completed assessment would not be affected and cannot be reopened under section 35 by virtue of the retrospective operation of the Amendment Act
In support of this contention reliance is placed on the observations of the Privy Council in Delhi Cloth and 1  132
90 708 General Mills Co Ltd vs Income tax Commissioner Delhi and Anr
Lord Blanesburg who delivered the judgment of the Board referred to the Board s earlier decision in the Colonial Sugar Refining Company vs Irving 2 where it was in effect laid down that while provisions of a statute dealing merely with matters of procedure may properly unless that construction be textually inadmissible have retrospective effect attributed to them provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment
The learned Judge then added that  Their Lordships have no doubt that the provisions which if applied retrospectively would deprive of their existing finality orders which when that statute came into force were final are provisions which touch existing rights
 The argument for the respondent is that the assessee has obtained a right under the order passed by the Income tax Officer to claim credit for the specified amount under section 18A5 and the said right cannot be taken away by the retrospective operation of section 13 of the Amendment Act
The same argument is put in another form by contending that the finality of the order passed by the Incometax Officer cannot be impaired by the retrospective operation of the relevant provision
In our opinion this argument does not really help the respondent s case because the order passed by the Income tax Officer under section 18A5 cannot be said to be final in the literal sense of the word
This order was and continued to be liable to be modified under section 35 of the Act
What the Income tax Officer has purported to do in the present case is not to revise his order in the light of the retrospective amendment made by section 13 of the Amendment Act alone but to exercise his power under section 35 of the Act and so the question which falls to be considered in the present appeal
centres round the construction of the expression mistake apparent from the record  used in section 35
That is why we think the principle of the finality of the orders or the sanctity of 11927 LR 54 IA 421
21905 AC 369
709 the existing rights cannot be effectively invoked by the respondent in the present case
The respondent then urged that the Amendment Act should not be given greater retrospective operation than its language and its general scheme render necessary
This convention is based on the provisions of section 3 sub section
2 section 7 sub section
2 and section 30 sub section
2 of the Amendment Act
Where the Amendment Act intended that its provisions should affect even concluded orders of assessment it is expressly so provided
Since section 13 does not specifically authorise the reopening of concluded assessments it should be held that its retrospective operation is not intended to cover such concluded assessments
That in brief is the argument
We are however not satisfied that this argument is wellfounded
Let us examine the three provisions of the Amendment Act on which the argument rests
Section 3 sub section 1 of the Amendment Act makes several additions and modifications in section 4 of the principal Act
Section 3 sub section 2 then provides that the amendments made by sub cl
3 of cl
b of sub section
1 shall be deemed to be operative in relation to all assessments for any year whether such assessments have or have not been concluded before the com mencement of the Amendment Act of 1953
It would be noticed that the main object of this sub section is to extend the retrospective operation of the relevant provisions of the Amendment Act beyond the first of April 1952 mentioned by section 1 sub section
2 of the Amendment Act
Since it was intended to provide for such further retrospective operation of the relevant provision the legislature thought it advisable to clarify the position by saying that the said extended retrospective operation would cover all assessments whether they had been completed or not before the commencement of the Amendment Act
Section 7 sub section
1 adds two provisos to section 9 of the principal Act by cls
a and b
Sub section 2 of section 7 then lays down that the amendments made in cl
a of sub section
1 shall be deemed to be operative for any assessment for the year ending the 31st day of March 1952 whether made before or after the commencement of this Act and where any such 710 assessment has been made before such commencement he Income tax Officer concerned shall revise it whenever necessary to give effect to this amendment
The position under section 30 sub section
2 of the Amendment Act is substantially similar
By sub section
1 of this section certain additions and amendments are made in the schedule to the principal Act by cls
a b c and d
sub section
2 then provides for the retrospective operation of the amendment made by sub section
1 in terms similar to those used in section 7 sub section
It is clear that the Provisions in sections 7 and 30 are intended for the benefit of the assessees and so the legislature may have thought it necessary to confer on the Income tax Officer specific and express power to revise his orders in respect of the relevant assessments wherever necessary to give effect to the amendments in question
The effect of this provision is to make it obligatory on he Income tax Officer to revise his original orders in he light of the amendments and also to confer on the assessee right to claim such revision
It may be con ceded that in respect of the other retrospective provisions of the Amendment Act such a power to revise the earlier orders cannot be claimed or exercised by the Income tax Officer
In other words a distinction can be drawn between there two provisions of the Amendment Act and the rest in respect of the power which the Income tax Officer can purport to exercise to give effect to the amendments made by the Amendment Act
Whereas in respect of the amendments made by section 7 and section 30 of the Amendment Act the Income tax Officer can and must revise his earlier orders covered by section 7 sub section
2 and section 30 sub section
2 such a power of revision has not been conferred on him in the matter of giving effect to the other amendments made in the Amendment Act
Even so we do not think it would be legitimate or reasonable to hold that the provisions of section 72 and section 302 lead to the infference that the retrospective operation of the other provisions of the Amendment Act is not intended to affect concluded assessments in any manner whatever
In this connection it would be pertinent to remember that the power to revise which has been conferred on 711 the Income tax Officer by section 72 and section 302 of the Amendment Act is distinct and independent of the power to rectify mistakes which the Income tax Officer can exercise under section 35 of the Act
It is in the light of this position that the extent of the Income tax Officer s power under section 35 to rectify mistakes apparent from the record must be determined and in doing so the scope and effect of the expression  mistake apparent from the record  has to be ascertained
At the time when the Income tax Officer applied his mind to the question of rectifying the alleged mistake there can be no doubt that he had to read the principal Act as containing the inserted proviso as from April 1 1952
If that be the true position then the order which he made giving credit to the respondent for Rs 50603 15 0 is plainly and obviously inconsistent with a specific and clear provision of the statute and that must inevitably be treated as a mistake of law apparent from the record
If a mistake of fact apparent from the record of the assessment order can be rectified under section 35 we see no reason why a mistake of law which is glaring and obvious cannot be similarly rectified
Prima facie it may appear somewhat strange that an order which was good and valid when it was made should be treated as patently invalid and wrong by virtue of the retrospective operation of the Amendment Act
But such a result is necessarily involved in the legal fiction about the retrospective operation of the Amendment Act
If as a result of the said fiction we must read the subsequently inserted proviso as forming part of section 18A5 of the principal Act as from April 1 1952 the conclusion is inescapable that the order in question is inconsistent with the provisions of the said proviso and must be deemed to suffer from a mistake apparent from the record
That is why we think that the Income tax Officer was justified in the present case in exercising his power under section 35 and rectifying the said mistakes
Incidentally we may mention that in Moka Venkatappaiah vs Additional Income Tax Officer Bapatla 1 the High Court of Andhra has taken the same view
11957 712 In this connection it would be useful to refer to the decision of the Privy Council in the Commissioner of Income Tax Bombay Presidency and Aden vs Khemchand Ramdas 1
In Khemchand s case the assessees were registered as a firm and they were assessed under section 234 on an income of Rs 125000 at the maximum rate
Being a registered firm no super tax was levied
A notice of demand was also made before March 1927
On February 13 1928 the Commissioner in exercise of his powers under section 33 cancelled the order registering the assessee as a firm and directed the Income tax Officer to take necessary action
The Income tax Officer accordingly assessed the firm to super tax on May 4 1929
The Privy Council held that the assessment made on January 17 1927 was final both in respect of the income tax and super tax
The fresh action taken by the Income tax Officer on May 4 1929 was out of time though it had been taken in pursuance of the directions of the Commissioner and that the order of May 4 1929 was one which the Income tax Officer had no power to make
One of the points raised before the Privy Council was whether under the relevant circumstances the Income tax Officer had power to make the impugned order in view of the provisions of sections 34 and 35 of the Act
The Privy Council dealt with this question on the footing that the Commissioner s order cancelling the registration had been properly made
On this basis their Lordships thought that it was unnecessary to consider whether the case would attract the provisions of section 34  inasmuch as in Their Lordships  opinion the case clearly would have fallen within the provisions of section 35 had the Income tax Officer exercised his powers under the section within one year from the date on which the earlier demand was served upon the respondents 
The judgment shows that Their Lordships took the view that looking at the record of the assessments made upon the respondents as it stood after the cancellation of the respondents  registration and the order effecting the cancellation would have formed part of the record it would be apparent that a mistake 11938 LR 65 IA 236 713 had been made in stating that no super tax was leviable
This decision clearly shows that the subsequent cancellation of the assessees  registration was held by Their Lordships of the Privy Council to form part of the record retrospectively in the light of the said subsequent event and the order was deemed to suffer from a mistake apparent from the record so as to justify the exercise of the rectification powers under section 35 of the Act
It is because Their Lordships thought that section 35 would have been clearly applicable that they did not decide the question as to whether section 34 could also have been invoked
This decision lends considerable support to the view which we are disposed to take about the true meaning and scope of the expression  the mistake apparent from the record  occurring in section 35
We must accordingly hold that the High Court of Bombay was in error in coming to the conclusion that the notice issued by the Income tax Officer calling upon the respondent to pay 9the sum of Rs 29446 9 0 was not warranted by law
The result is the order passed by the High Court issuing a writ against the appellant is set aside and the appeal is allowed with costs throughout
Appeal allowed


Summary:
Appellant No 1 is a public trust and the other appel lants are its trustees
The Trust was running a science college at Ahmedabad
The college initially had temporary affiliation to the Gujarat University
From June 15 1973 onwards the college had permanent affiliation
A dispute between the University Area Teachers Associa tion and the University was referred to the Chancellor of the University who gave his award on June 12 1970
The award was accepted by the State Government as well as by the University
The latter issued direction to all affiliated colleges to pay their teachers in terms of the award
The appellants instead of implementing the award served notice of termination upon 11 teachers on the ground that they were surplus and approached the University for permis sion to remove them
The Vice Chancellor did not accept their request
Thereupon the Trust decided to close down the college
The retrenched persons demanded arrears of salary and allowances provident fund and gratuity dues and closure compensation
But the management did not pay these dues
The employees then moved the High Court to issue a writ of mandamus directing the Trust to pay the retrenched employees their legitimate dues
The High Court accepted the writ petitions
Before this Court the appellants while conceding the just right of the employees to get salary for 2 12 months and the provident fund dues contended that the Trust was entitled to get reimbursement from the Government in lieu of these payments
As regards the arrears of salary
698 payable under the Chancellor s aWard the appellants con tended that it was the liability of the Government and not of the management of the college
As regards the closure compensation it was contended that Ordinance 120E prescrib ing compensation was ultra vires and at any rate it was not binding on the Trust since it was enacted prior to the affiliation of the college
It was further contended that the Trust was a private body and was not subject to the writ jurisdiction under Article 226
Dismissing the appeals it was Held 1The Court is only concerned with the liability of the management of the college towards the employees
Under the relationship of master and servant the management is primarily responsible to pay salary and other benefits to the employees
The management cannot say that unless and until the State compensates it will not make full payment to the staff
703E F 2 The college had temporary affiliation even earlier to the Ordinance 120E
That apart the benefits under the Ordinance are to be given when the college is closed which in this case was admittedly after the Ordinance was enacted
704A B 3 If the rights are purely of a private character no mandamus can issue
If the management of the college is purely a private body with no public duty mandamus will not lie
These are two exceptions to mandamus
But once these are absent and when the party has no other equally conven ient remedy mandamus cannot be denied
705B C 4 Public money paid as Government aid plays a major role in the control maintenance and working of educational institutions
The aided institutions like Government insti tutions discharge public function by way of imparting education to students
They are subject to the rules and regulations of the affiliating University
Their activities are closely supervised by the University authorities Em ployment in such institutions therefore is not devoid of any public character
705C D 5 When the University takes a decision regarding the pay scales of the employees of the aided institution it will be binding on the management
The service conditions of the academic staff are therefore not purely of a private character
It has super added protection by University decisions creating a legal right duty relationship
When there 699 is existence of this relationship mandamus cannot be re fused to the aggrieved party
705E 6 Article 226 confers wide powers on the High Court to issue writs in he nature of prerogative writs
Under Article 226 writs can be issued to any person or authority
It can be issued for the enforcement of any of the fundamental rights and for any other purpose 706F G Executive Committee of Vaish Degree College vs Lakshmi Narain
   Deepak Kumar Biswas vs Director of Public Instructions  distinguished Dwarkanath vs Income Tax Officer   referred to
7 This is a striking departure from the English Law
Under the English Law the prerogative writ of mandamus is confined only to public authorities to compel performance of public duty and public authority  there means every body which is created by statute and whose powers and duties are defined by statute
706E F 8 The words any person or authority used in Article 226 are not to be confined only to statutory authorities and instrumentalities of the State
They may cover any other person or body performing public duty
The form of the body concerned is not very much relevant
What is relevant is the nature of the duty imposed on the body
The duty must be judged in the light of positive obligation owed by the person or authority to the affected party no matter by what means the duty is imposed
If a positive obligation exists mandamus cannot be denied
707G H 708A B 9 Mandamns cannot be denied on the ground that the duty to be enforced is not imposed by the statute
708B Praga Tools Corporation vs Shri CA Imanual   referred to
10 The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water tight compartment
It should remain flexible to meet the requirements of variable circumstances
Mandamus is a very wide remedy which must be easily available to reach injustice wherever it is found 
Technicalities should not come in the way of granting that relief under Article 226
708F G 700