G. RENGANATHAN AND ANOTHER Vs. THE STATE REPRESENTED BY THE JOINT COMMERCIAL TAX OFFICER, PARK TOWN, MADRAS

JUDGEMENT

(1.) THIS is a petition under S. 482 of the Criminal Procedure Code to call for the records in CT/M.P. 58/77 on the file of the VII Metropolitan Magistrate Court, Madras, and quash the same. The petitioners are the President and Secretary respectively of the New General Officers Staff Co -operative Canteen situate in the office of the Southern Railway, Madras. This Co -operative canteen is a society registered under the Co -operative Societies Act. This canteen has been assessed by the Joint Commercial Tax Officer for the year 1974 -75. Payment of the sales tax assessed was also demanded subsequently. Against the order of assessment, the canteen filed an appeal before the Appellate Assistant Commissioner and the Appellate Authority remitted the matter to the Joint Commercial Tax Officer to verify whether the sales were made exclusively to members as contended by the canteen. The original order of Assessment was set aside. After remand, the Joint Commercial Tax Officer, is said to have come to the conclusion that the sales were made only to members, but that there was no distribution. He held that there were only sales. Against that order, the canteen has again filed an appeal. That appeal is said to be pending. It is stated by Sri B.T. Seshadri, learned counsel for the petitioners, that the canteen has subsequently applied to Sales Tax Appellate Tribunal and has obtained an order of stay against the execution of the order assessing the canteen to payment of sales tax.

(2.) IN the meantime, the Joint Commercial Tax Officer, Park Town, Madras, has instituted proceedings under S. 24(2)(b) of the Tamil Nadu General Sales Tax Act, hereinafter referred to as the Act, against the petitioners herein in the Court of the VII Metropolitan Magistrate, for realisation of the sales -tax as if it were a fine imposed by the Magistrate. To quash the said proceedings, this petition has been filed. The only question to be considered is whether the petitioners are personally liable to pay the sales -tax assessed on the "New General Officers Staff Co -operative Canteen." Sub -section (2) of S. 24 of the Act, empowers the recovery of any tax assessed on a dealer or person as if it were an arrear [of land revenue or on application to any Magistrate, by such Magistrate as if it were a fine imposed by him. The dealer or person referred to in sub -section (2) of S. 24 of the Act is the dealer who has been assessed to the payment of tax. In the instant case, the dealer or person assessed is the "New General Officers Staff Co -operative Canteen", which is a separate legal entity. However, it is not only the society that is sought to be proceeded against but also Thiru G. Ranganathan, Senior Personnel Officer, Southern Railway and Thiru C.S. Narasimhan, Claims Clerk, Southern Railway, namely, the petitioners herein, and not the Society represented by them. The petitioners are not personally liable to pay the sales -tax assessed on the society. It is not clear from the complaint filed in this case whether the society is sought to be proceeded against at all. However, it is clear that the petitioners are sought to be proceeded against. The respondent is not entitled to proceed against the petitioners personally, since the liabilities are not personal to them. This view finds support in a decision of Veeraswami, J. as he then was, reported in Paramasivam Pillai v. Board of Revenue, (1963) 14 S.T.C. 972. The learned Judge has observed as follows:

(3.) the assessment orders were made against the canteen represented by its honorary secretaries, one of whom happened to be the petitioner. The assessment was not made personally against him It follows, therefore, that no proceedings could be taken under S. 24(2)(b) of the Madras General Sales Tax Act, 1969, to collect the tax personally from the petitioner, since the liability was not personal to him. The fact that creditors, like the provision shop, who supplied provisions to the petitioner were able to obtain a decree against the petitioner personally does not help the department. The decree there is clearly based on the contract between the petitioner and the decree -holder. There is no such basis to support the recovery proceedings against the petitioner personally, in respect of the sales tax arrears due from the canteen.