Judgment:
Raghuvir, J.
1. The Commercial Tax Officer, Nellore, served a notice on October 4, 1979, on the branch office of the State Bank of Hyderabad, Nellore. In that notice the bank was informed that Nunna Venkata Krishnayya is due in Rs. 19,800 to the Sales Tax Department. If any amount is lying in deposit to the credit of Krishnayya such amounts be remitted to the department. On that date Rs. 396.63 was in deposit. The bank promptly paid the amount to the Sales Tax Department. Krishnayya deposited by a demand draft Rs. 12,800 on January 1, 1980. The bank allowed him to encash the draft. Thereupon the bank agent was informed by the Sales Tax Department that on January 1, 1980, he allowed encashment of the demand draft in violation of their order dated October 4, 1979, therefore, the agent of bank personally was ordered to pay Rs. 12,800 to the department. Thereupon, the instant writ petition is filed by the bank. The case of the bank is that no violation of the order of the department was intended and in law no breach of the order resulted by allowing the demand draft to be cashed by Krishnayya. The petitioner argued that when notice was served, Rs. 396.63 was lying to the credit of the assessee. That amount was paid. Thus the notice dated October 4, 1979, stood discharged and cited the case of Income-tax Officer v. Budha Pictures : [1967]65ITR620(SC) .
2. In that case section 46(5A) of the Indian Income-tax Act, 1922, was interpreted at para 4 (page 1549 of AIR; 623 of ITR) which reads :
'The learned counsel for the appellant contends that section 46(5A) applies in four sets of circumstances :
(1) when money is due from a person to the assessee;
(2) when money may become due to the assessee;
(3) when a person holds money for an assessee; and
(4) when a person may hold money on account of the assessee.
He says that there is no reason for cutting down the words in categories (2) and (4); the words are plain and they do not suggest that at the time of notice a relationship, which may result in money being owed or being held on account of the assessee, should subsist. In our view, if the assessee has no subsisting relationship with a person it would be speculative to think that that person may get into relationship with the assessee and start owing money to him or start holding money for him. We can hardly believe that the Legislature framed this sub-section on speculative considerations. It seems to us that the Legislature contemplated a subsisting relationship of which the Income-tax Officer gets information and which could reasonably lead to recovery of arrears. Theoretically, it would be possible for an assessee to enter into relationship with almost anybody, say in the town in which he resides. We can hardly imagine that it was expected that the Income-tax Officer would issue notices to all the residents or a town to pay money in case they begin to hold or owe money to the assessee.'
3. Section 46(5A) of the Income-tax Act and section 17(1) of the Andhra Pradesh General Sales Tax Act, 1957, the two provisions contain words and phrases similar in content. The above case applies on all fours to the facts of the case.
4. We would have elaborated our opinion in the case but for the fact, on facts the case on hand is covered by the ratio in the above decision on all fours. The bank has not violated any term of the order in the letter of the Sales Tax Department dated October 4, 1979, when it had allowed Nunna Venkata Krishnayya to encash Rs. 12,800 on January 1, 1980. We, however, state we are only applying the ratio of the case in Income-tax Officer v. Budha Pictures : [1967]65ITR620(SC) , to the facts of the instant case.
5. The writ petition is allowed. No costs. Advocate's fee Rs. 150.
6. Since we have followed the decision of the Supreme Court, we see no substantial question of law of general importance arises for consideration in this case for the decision of the Supreme Court. Therefore, oral request for leave to Supreme Court is rejected.
7. Writ petition allowed.