PUBLIC PROSECUTOR Vs. EBRAHIM SARFUDDIN AND CO

JUDGEMENT

(1.) THIS is an appeal by the State against the acquittal of the respondents by the Fourth Presidency Magistrate for an offence under Section 15 (b) of the Madras General Sales-tax Act.

(2.) FOR 1953-54 the respondents submitted a return for Rs. 1,88,000, and odd, but the authorities after checking found that the turnover was Rs. 3,25,000, and odd. In this estimate of the gross turnover the authorities have included the sales-tax recovered by the respondents which apparently was omitted in the return submitted by the respondents. By a decision of this Court in Deputy Commr. of Commercial Taxes v. Krishnaswami Mudaliar and Sons, , it was held that the turnover of a dealer does not include the sales tax that are collected on the goods sold by dealer. But the authorities on the basis that the sales tax is also included in the turnover have been collecting tax on the total turnover. By the decision of this Court a situation was created by which portion of the tax collected on the basis of the turnover included in the sales tax will have to be returned. The legislature therefore intervened and passed Act XVII of 1954 which came into force on the 14th of July 1954. By this Act they validiated all the taxes collected upto date, that is the taxes on the turnover including the sales tax as well. Under Section 3 (2) of the Act, a provision is made as follows: Nothing in Sub-section (1) shall be construed as authorising any officer in assessing any dealer in the exercise or purported exercise of jurisdiction or powers conferred by the principal Act to include in the turnover of the dealer amounts collected by him after 1st April 1954 by way of tax under the principal Act. Under Sub-section (1) all assessments and collections made on the basis of the turnover including sales tax were validated. But under this clause there is a proviso that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this Act had not been passed. The respondents already paid the taxes on the basis of the return. In this case after the return which did not include the Bales tax, the authorities, that is, the sales tax officers issued notice in February 1955 calling upon the respondents to pay the balance of tax due to them on the basis that the turnover includes the sales tax as well. The respondents did not pay the balance of the tax. On this the prosecution is for failure to pay the tax and to recover the balance of the tax due.

(3.) THE Fourth Presidency Magistrate who tried this case held that the proviso to Section 3 will apply and therefore, the respondent is not liable to pay. Against this order of acquittal this appeal has been preferred.