GANTAIAH C V Vs. CTO ARSIKERE

JUDGEMENT

(1.) The petitioner is a toddy contractor. In the toddy auction held in May, 1972 he succeeded in getting 35 shops and commenced sales only from 1-7-1974 as alleged by him in the Writ Petition. He has further alleged that he could not run all the 35 shops and in that circumstance, he retained only 3 shops in Chennarayapatna town in his personal control and gave the business of the remaining 32 shops to eleven different sub-contractors. All the subcontractors entered into an agreement with him undertaking to pay the Khist the Tree Tax, sales Tax and all other taxes in respect of the business carried on by them in the shops of which they were sub-lessees. The petitioner informed the Assistant Commercial Tax Officer in this regard. Similarly, the Deputy Commissioner of Excise in Hassan District was also informed of the said sub-lease contracts together with the details of the shops allotted and the amounts agreed to be paid by the said sub-contractors- A true copy of the intimation sent to the Assistant Commercial Tax Officer, Arasikere, the I respondent herein, bearing no date, is produced at 'Annexure-A' to the petition. The petitioner has alleged that for the assessment year 1974-75 he first filed a return showing the turnover in respect of 3 shops personally managed by him. But, the same came to be refused to be accepted by the I respondent who, directed him to file a return in respect of all shops. The petitioner protested on account of the fact that he had sub-leased 32 out of 35 shops. He has alleged that on the assurance given that the entire tax on the total turnover of the 35 shops would not be recovered from him, he filed a return for all the 35 shops showing a turnover of Rs. 4 lakhs. He has further asserted in the petition that on the assurance given that he will be charged only Rs. 5,500 as fax he deposited the said amount with the assurance that after all the taxes were recovered from other sub-contractors, after final assessment, he would be given refund. However, the I-respondent initiated recovery proceedings under S. 13(3) (b) of the Karnataka Sales Tax Act (hereinafter referred to as 'the Act') before the 2nd respondent Judicial Magistrate First Class, Channarayapatna, in the sum of Rs. 13,500 towards the Sales Tax dues and Rs. 270 towards Licence Fee. Aggrieved by the recovery proceedings, the petitioner has approached this Court under Arts. 226 and 227 of the Constitution of India for redress interalia contending that the proceedings before the 2nd respondent are without the authority of law and without jurisdiction inasmuchas there is no notice of demand served by the I-respondent on the petitioner. The petitioner also has further contended that he is not liable to pay tax in respect of all the 35 shops and the I-respondent was duty bound to recover sales tax from the sub-contractors on the basis of the turnover of those 32 shops in their control and management.

(2.) On behalf of the I-respondent statement of objections has been filed. It is stated therein that the petitioner did not produce any formal order of sanction by the Deputy Commissioner of Excise, Hassan authorising sub-lease to the Contractors listed in Exhibit-A and in the absence of such sanction the I-respondent was justified in assessing the petitioner for all the 35 shops. It is also asserted for the I-respondent that the question of completing the assessment did not arise in as much as the petitioner voluntarily filed his return declaring the turnover of Rupees five lakhs for all the 35 shops in Form No. 4 prescribed under the Karnataka Sles Tax Rules (hereinafter referred to as 'the Rules'). It. is further asserted for the I-respondent that the petitioner had not filed his return only for three shops as contended. It is started that the petitioner was due in the sum of Rs. 20,000 in accordance with the declared turn over and that he had paid only a sum of Rs. 4,000 leaving a balance of Rs. 16000. Subsequently the petitioner had paid Rs. 2500 through his counsel and therefore a net balance of Rs. 13,500 was due from the petitioner for the relevant assessment year, viz., 1974-75. In spite of a notice issued in Form 3A demanding the balance the petitioner, though he received the notice on 13-10-75 failed to pay and therefore, the amount due under S. 33(1) of the Act was liable to be recovered under S. 13(3) (b) of the Act.

(3.) Sri Chatre, learned counsel for the petitioner has contended that the return, filed in Form No. 4 was only provisional and unless the I-respondent has completed the assessment after due notice to the petitioner, there would be no tax to be paid by the petitioner and if no tax was due and if there was no assessment order in that behalf, bringing his turnover to tax there could not be any proceedings under S. 13(3) (b) of the Act.