PUBLIC PROSECUTOR Vs. V M RAMALINGAM PILLAI

JUDGEMENT

(1.) THE point for determination in this appeal is "whether Section 16-A of the Madras General Sales-tax Act is ultra vires and the liability to pay the assessment levied can be challenged in the Criminal Court. If the answer is in the affirmative, then this appeal should be dismissed, and if the answer is in the negative it has got to be allowed.

(2.) SECTION 16-A was inserted by the Madras Amendment Act XXV of 1947 and is designed to render nugatory the line of decisions given prior to the amendment to the effect that the jurisdiction of the court to go into the validity of the assessment was not taken away. Prior to the enactment of this provision in 1947, which was brought into force on 1-1-1948, this Court laid down in several decisions that the burden is upon the prosecution to establish affirmatively that the accused was liable to pay tax and that he failed to pay it: Ramaswami lyengar v. Sivakasi Municipality 1936 Mad WN Cr 221 : AIR 1937 Mad 291 (A); Public Prosecutor v. Khader Khan 1946-2 Mad LJ 461 : AIR 1947 Mad 321 (B); In re Appa Rao AIR 1949 Mad 418 (C) and Venganna, In re 1947-2 Mad LJ (NRC) 12 (D); See per contra Narasingamuthu Chettiar In re 1948-2 Mad LJ 93 : AIR 1949 Mad 116 (E ). On account of the fact as pointed out by Sundara Vyas in his "madras General Sales-tax Act", 2nd Edn. page 160, that the department found it difficult to prove all links in the chain needed to sustain the assessment in a criminal court which starts with a presumption in favour of the accused, and there was also need to avoid conflicting decisions of parallel courts, civil, criminal and revenue, on the same question, it was decided to oust the jurisdiction of civil and criminal courts and Section 16-A was enacted. The original proposal of the Government to oust the jurisdiction of civil courts also was dropped. But subsequently Section 18-A has been enacted by Act VI of 1951 under which no suit or other proceeding shall, except as expressly provided in the Act be instituted in any court to set aside or modify any assessment made under this Act. We are concerned here only with Section 16-A. In regard to this amended Section 16-A on the ground that this amendment is not retrospective, this Court has held that prosecutions commenced prior to or even pending on 1-1-1948 and prosecutions commenced after 1-1-1948 in respect of assessments made before 11-1948 are governed by the decisions in 1946-2 Mad LJ 461 : AIR 1947. Mad 321 (B) and Narasingamuthu Chettiar In re. 1948-2 Mad LJ 93 : AIR 1949 Mad 116 (E), and the principles set out therein. In regard to subsequent assessments, Section 16-A makes the validity of any assessment or imposition unassailable in a criminal court. Section 18-A makes a civil suit or other proceeding incompetent for the purpose of setting aside or modifying any assessment under this Act. Thus, Section 16-A bars a defence while Section 18-A bars the institution of the proceeding itself at the instance of the assessee. The result is the assessment or levy can be questioned only under the provisions and by the methods prescribed under the Act, and not de hors the Act.

(3.) THERE are two conflicting Bench decisions about Section 16-A being ultra vires or intra vires. In Syed Mohamed and Co. v. State of Madras , decided by the learned Chief Justice and Venkatarama Aiyar J. , it was held that the provision in Section 16-A of the Madras General Sales-tax Act is analogous to the rules which preclude judgment-debtors from putting forward at the stage of execution of a decree defences which were open to them in the suit itself, is not repugnant to the rules of natural justice, and that the Act provides for appeals and revisions against the order of assessment and it cannot be said that the assessee is denied any opportunity to contest his claim in regard to the assessment by reason of the enactment of Section 16-A. Therefore, Section 16-A was held to be intra vires This Bench decision delivered by Venkatarama Aiyar J. , if I may say so with great respect, is an exhaustive exposition of the law on the subject In addition to this Bench decision there are two decisions of single Judges, viz. , that of Pancha-pakesa Ayyar J. , in In re Gigina Pasha Sahib ; and Hajee Meeran v. Public Prosecutor Cri. R. P. 11 of 1952 (Mad) (H), decided by me, in which it was held that Section 16-A is not ultra vires of the Constitution. The other Bench decision to the contrary is Guruviah Naidu and Co. v. State , decided by Govinda Menon and Basheer Ahmed Sayeed JJ. The judgment of the Court was delivered by Basheer Ahmed Sayeed J. In that judgment after referring to the two decisions of Single Judges, passing reference is made almost at the end of the judgment to , in the following terms: In Syed Mohamed and Co. v. State of Madras (F), relied on by the learned Advocate General, a Bench of this Court has held that Section 16-A, of the General Sales-tax Act is valid and it cannot be said to be opposed to natural justice Or repugnant to the Constitution, in view of the elaborate procedure that has been made available to the assessee to question the validity of the order at a stage prior to the attempt by the State for the realisation of the same. In that decision, the matter arose in a writ and the whole Act was contended to be ultra vires and it was held that the plea that the Act was ultra vires could not be raised before the Tribunal which owes its very existence to the Act. With respect, we do not think that the reasoning contained in this decision applies to the present cases for the important reason that none of the points now raised before us had been raised, nor considered in that decision. It is not the case in these petitions that the assessee availed of the entire machinery provided for in the Act before the order in question became final. Then the judgment winds up by saying: