PUBLIC PROSECUTOR Vs. MUKH SINGH CHANDA

JUDGEMENT

(1.) The question which arises in this appeal is whether the non-service of notice to show cause why an assessment already made 'should not be reopened, notwithstanding the fact that the ex parte re-assessment order and the notice of demand have subsequently been served, would nonetheless affect the assessment order because of non-compliance with the fundamental provisions of the statute ? The facts in this case are these: There was an assessment upon a firm known as "Kohli Motors, Bezwada" for the year 1957-58 under the Sales Tax Act. The said firm consisted of three partners, A-1, A-2 and A-3, which firm was dissolved on 1st August, 1959, and it is not denied that the notice of dissolution was given to the Sales Tax Authorities under the relevant rules. Under the deed of dissolution, it appears that all taxes are to be paid by the first accused. Subsequent to the dissolution, it was found that certain turnover escaped assessment and a notice to show cause was issued to A-1 to A-3. It may be stated that A-1 lives in Bombay A-2 and A-3 in Bezawada. The notice to A-1 was sent by registered post with acknowledgment due to a firm called "Independent India Motors" while the notices to A-2 and A-3 were sought to be personally served and on refusal by affixture. The person who served it, viz., one Veeraswamy has not been examined and, consequently, the Court has held that the service of notices on A-2 and A-3 to show cause why the assessment should not be reopened, has not been proved. The acknowledgment of the notice to A-1 sent by registered post was not signed by him nor has it been proved as to who signed it. Since there was no attempt made by the Sales Tax authorities to establish that the notice was received by him and in view of the specific denial by A-1, A-2 and A-3, the Court held that the show cause notice was not received by any of the three accused, it was also held that the assessment order made on 20th March, 1951, on the escaped turnover of Rs. 56,810 imposing a tax of Rs. 2,682-97 nP. along with the demand notice, Exhibit P-6, was also not served on these accused inasmuch as the service has not been satisfactorily established. In so far as the first accused is concerned, the assessment order and the notice were sent by registered post but this time without acknowledgment due.

(2.) A-1 has denied having received them. In so far as A-2 and A-3 are concerned, the refusal by them has been sought to be established by the evidence of P.W. 2. The Magistrate, however, thought that the scribe of the endorsement of refusal which was signed by P.W. 2 has not been examined. Further, the statement of P.W. 2 that the affixture by him was witnessed by the watchman was not a sought to be corroborated by the examination of the watchman. For these reasons, he held that there was no satisfactory evidence to show that the assessment order and the notice of demand were refused by A-2 and A-3 and that the same was got affirmed. Sri Chinnappa Reddy, the learned Public Prosecutor contends that the Magistrate was not justified in rejecting P.W. 2's evidence merely because one David has not been examined or that the watchman has not been examined. There is in my view force in this contention, because P.W. 2's evidence shows that the notices were refused by A-2 and A-3 and that thereafter he affixed the same. A-2 has examined himself as D.W. 1 and he denied that he received the notice or that he refused the same. He was also cross-examined. Mr. Subba Reddy says that it is an oath of P.W. 2 against an oath of P.W. 3 and consequently the Magistrate was right in rejecting the evidence of P.W. 2. I can understand the Magistrate considering the evidence of both P.W. 2 and D.W. 1 and preferred the evidence of D.W. 1 to that of P.W. 2. But, that he has not done. Instead, to has merely on an assumed defect on the part of the prosecution in not examining the scribe of the endorsement or the watchman rejected his evidence as if the evidence of process server had to be corroborated. On the assumption that these notices were served, the further question as posited by me in the beginning of this judgment would arise. In support of that, Mr. Chinnappa Reddy, the learned Public Prosecutor contends that it is not open to a Criminal Court to go behind the assessment order which has become final, and relies on a Full Bench decision of this Court in Public Prosecutor v. Bhavigadda Thimmiah and others. The learned Advocate Mr. Subba Reddy, on the other hand submits that while the Full Bench decision is an authority for the proposition that the Criminal Courts cannot go behind the assessment orders, nonetheless, there were certain observations in that judgment as also in the judgment of their Lordships of the Supreme Court in Firm of Eluri Subbajya Chetty & Sons v. State of Andhra Pradesh to the effect that where there is a fundamental defect in not complying with the provisions of the statute, the validity of the assessment order itself can be challenged.

(3.) Chandra Reddy, C.J., delivering the judgment of the Full Bench has referred to the remarks of Rajamannar, C.J., in Syed Mahamad & Co. v. State of Madras, and observed that the learned Judges were also influenced by the fact that the determination of the amount of tax was made after notice to the assessee and it was open to appeal and even to revision, and that, in their opinion that represents the correct law. The observations of Rajamannar, C.J., and Venkatarama Ayyar, J., relating to the objection that a criminal Court can go behind the assessment order which were approved are as follows :- "There would have been substance in this objection, if the petitioners had been denied an opportunity of contesting the claim before an order of assessment was made. But where, as here, the tax is determined after notice to the assessee, it is not repugnant to rules of natural justice to provide that the validity of assessment shall not be questioned at the stage of realisation of the tax. The provision is analogous to the rule which precludes judgment debtors from putting forward at the stage of execution of a decree defences that were open to them in the suit itself. In Firm Eluri Subbayya Chetty & Sons v. State of Andhra Pradesh, in an appeal from the judgment of a Full Bench of this Court, the question was whether the bar of section 18-A of the Madras General Sales Tax Act would oust civil Court from entertaining a suit. In dealing with that question Gajendragadkar, J., (as he then was) referred to the two decisions of the Privy Council viz., Secretary of State v. Mask & Company, and Raleigh Investment Co. Ltd. v. Governor-General in Council In the former case Lords Thankerton observed:-