G V RAMA IYER Vs. GOVERNMENT OF MYSORE

JUDGEMENT

(1.) The petitioner in Criminal Revision Petition No. 164 is the proprietor of a Coffee Club and Catering Establishment at Horakote who has been assessed to a tax of Rs. 156 on the turnover of his business estimated at Rs. 10,000 a year. The levy is stated to be provisional and a demand notice was served on him on 26th March, 1949. He failed to pay the assessment though the time prescribed for payment had expired. The petitioner in Criminal Revision Petition No. 165 is a Soda Manufacturer and Bakery Merchant at Horakote. He was also provisionally assessed to a tax of Rs. 156 for the year 1948-49 on the turnover of his business. A demand notice was served upon him and he failed to pay the tax within the time allowed. Both of them were prosecuted under Section 20(b) of the Mysore Sales Tax Act. In both the cases, the receipt of the notice is admitted and the plea raised is 'not guilty'. They have challenged the validity of the tax. A preliminary objection was raised by the prosecution that the Court is precluded from considering the validity of the tax which was overruled holding that the accused is perfectly at liberty to question or challenge the assessment or any other action taken by the authorities under the Act. On merits, the learned Magistrate held that the levy of the tax is justified and disallowed the objection and that the rules were not ultra vires of the rule-making power of the Government and the rules relating to the provisional assessment were well within the ambit authorised. The accused in both the cases were convicted and sentenced to pay a fine of Rs. 25 with a direction that the tax assessed shall be recovered as if it were a fine.

(2.) The petitioner in Criminal Revision Petition No. 290 is a merchant dealing with groundnuts at Davanagere who was also prosecuted for non-payment of the tax levied and convicted to pay a fine of Rs. 150 in addition to the tax levied. His plea, while not disputing the facts of the case, is that he was not liable to pay the tax assessed as the assessment order is itself illegal and ultra vires and outside the provisions of the Mysore Sales Tax Act. The Magistrate in the latter case came to the finding that a criminal Court cannot assume jurisdiction to question the legality or propriety of the order of assessment passed by the assessing authority.

(3.) The common question that is canvassed in all these cases is whether a criminal Court is or is not precluded from examining the validity of the assessment. It is argued for the assessees that they are not liable to pay the tax by reason of the fact that the turnover does not exceed Rs. 10,000 per year and the Assessing Officer has to prove their liability without which the tax levied is invalid and illegal. The assessee in the cases under consideration comes under the definition of a 'dealer' meaning any person who carries on business of buying and selling. Sections 5 to 9 of the Mysore Sales Tax Act provide for the grant of licences of exemption from taxation. Sections 10 and 11 deal with registration of dealers and collection of tax. The procedure to be followed by the Assessing Authority is prescribed in Section 12 under which every dealer is required to submit a return and the Assessing Authority shall assess the tax if he is satisfied that the return is correct and complete; if the return is not submitted or, if it appears to the Assessing Authority that the return submitted is incorrect and incomplete the Assessing Authority shall assess the dealer to the best of his judgment, after giving a reasonable opportunity to the assessee to prove the correctness and completeness of the return submitted by him. Section 14 of the Act provides for filing an appeal objecting to an assessment. Section 15 constitutes the Government as the Revising Authority. After appeal and revision, the dealer or the Assessing Authority may, by application in writing, require the Appellate or the Revisional Authority to refer to the High Court any question of law arising out of such order and if the Appellate or the Revising Authority refuses to make such reference, the applicant may apply to the High Court with in thirty days of such refusal order under Section 16 of the Act. It is thus seen that in the words of Lord Uthwatt in Raleigh Investment Co. Ltd. v. Governor-General in Council ([1947] 15 I.T.R. 332; A.I.R. 1947 P.C. 78.), "Effective and appropriate machinery is therefore provided by the Act itself for the review on grounds of law of any assessment".