V B PATIL Vs. COMMERCIAL TAX OFFICER HAVERI

JUDGEMENT

(1.) This writ petition preferred under Art. 226 of the Constitution of India is directed against the notice No.DR|CT|W-35|B dated 3-7-1969 issued bv the Commercial Tax Officer, Haveri-respondent-1 under S.18A of the Mysore Sales Tax Act, 1957. hereinafter called the Act, proposing to levy a penalty unto Rs. 13,080-93 P. The petitioner is a dealer under the Act carrying on business on its own account and also as Commission Agent on behalf of its known principal. At the time making the assessment for the period from 5-11-1964 to 24-10-1965 the petitioner objected to the levy of sales tax on the turnover of sales of chillies effected as Commission Agents of agricultural producers. The assessing authority rejected the obiection on the ground that the Assessee had not filed a list of its principals alleged to be agriculturists and that it had merely asserted that they were agriculturists. On appeal preferred by the petitioner to the Deputy Commissioner of Commercial Taxes, the objection of the petitioner was accepted and the turnover in dispute was exempted from sales tax. Under the Act, sales by agriculturists of their agricultural produce is not taxable whether sale is effected by the producers or through Commission Agents.

(2.) The petitioner had collected from the purchasers of chillies a sum of Rs.8,720-62 P. during the aforesaid period from 5-11-1964 to 24-10-65 on the assumption that the transactions were exigible to sales tax. Respondent 1 issued the impugned notice alleging that the petitioner has collected a sum of Rs.8,720-62 P. during the period from 5-11-1964 to 24-10-1965 by way of tax on the sales of chillies effected on behalf of grower principals, that the said amount represents collections by way of tax or purporting to be by way of tax, but as the sales in question are not liable to tax, the said collection is in contravention of S.18(1) of the Act. Therefore, the notice proceeds to state that under the provisions of S.18A a penalty up to Rs. 13,080-93 is liable to be imposed on the petitioner, and before levying the penalty the petitioner was afforded an opportunity of being heard on 19-7-1969. On receipt of the said notice, the petitioner has approached this Court for relief under Art. 226 of the Constitution of India. The petitioner has challenged the impugned notice on a number of grounds. One of the grounds is that S.18A is unconstitutional, being violative of Arts. 19(1) (f), 19(1) (g) & 20 of the Constitution of India and further, that the provisions of Sec.18A are beyond the legislative competence of the State Legislature. Even assuming that S.18A is valid, it is urged that the condition precedent to the exercise of jurisdiction under S.18A is non-existent in the instant case since on the facts stated in the impugned notice there is no contravention of S.18(1) of the Act.

(3.) In the view which we propose to take, it is unnecessary to deal with the contention that S.18A is unconstitutional. In our opinion, the petitioner is entitled to succeed on the ground that the provisions of S.18A are not attracted as there is no contravention of the provisions of sub- sec. (1) of S.18 of the Act. S.18A inserted by Mysore Act 7 of 1966 with retrospective effect reads thus: