S. Athimoolam Achari v. The Deputy Commercial Tax Officer, Kovilpatti, Tirunelveli Dt. .

1. This is an application for issuing a writ of prohibition directing the respondent to forbear from assessing the petitioner for sales-tax for 1950-1951. The petitioner is a merchant trading in bullion and specie at Ettayapuram Naduveerapatli in Tirunelveli district. When the Madras General Sales-tax Act was passed in 1939, bullion and specie were exempt from taxation. In 1947, S. 5 of the old Act was substituted by the Madras General Sales-tax Amendment Act, 1947 (Madras Act XXV of 1947). Under that section the sale of bullion and specie shall be liable to tax only at a single point in the series of sales by successive dealers as may be prescribed and only that the rate of one fourth of one per cent of the turnover at that point. In exercise of the powers conferred on the Provincial Government by S. 19 of the Act, rules were made for licensing the persons engaged in the sale of goods and the imposing of conditions in respect of the same for purpose of enforcing the provisions of the Act and the fee for licenses. Rule 5(1)(d) and (f) of the Madras General Sales-tax Rules, 1939, requires that every person who deals in bullion and specie should submit an application in form 1 for a licence in respect of each of his places of businesses, and rule 6(1) says that every licence shall cover one place of business only and rule 6(1-A) provides that in addition to the licensee's place of business, the shandies where he prosecuted his business may also be entered in the same licence. Under rule 7 the benefit of Ss. 5 and 8 can be claimed only for the transactions carried on during the period covered by the licence. The petitioner took out a licence for the place of his business, namely, Ettayapuram Naduveerapatti. In his return for 1949-1950 he had shown not only the sales in the town in respect of which he has taken a licence, but also the sales effected by, him in other places. The Deputy Commercial Tax Officer at Kovilpatti raised the objection that the sales outside the place of business specified in the licence were liable to be assessed at 3 pies rate on every rupee and accordingly assessed the petitioner for the year 1949-1950. The petitioner preferred an appeal to the Commercial Tax Officer, Tirunelveli, but that appeal was dismissed. Against that he preferred an appeal to the Sales-tax Appellate Tribunal. But it is represented to me that the appeal is still pending. Meanwhile the Deputy Commercial Tax Officer issued a notice dated 16th February 1951 proposing to assess the sale turnover of Rs. 29093-1-9 for 1950-1951 in Madura, Tirunelveli and Kovilpatti at the enhanced rate of 3 pies on every rupee. The petitioner apprehends that his objections would be overruled. He therefore filed the aforesaid application to prohibit the Deputy Commercial Tax Officer from assessing the petitioner for sales-tax for 1950-1951.

2. The learned counsel for the petitioner raised before me two points:

1. The villages or towns where the petitioner casually sold the bullion are not places of business within the meaning of rules 5(d) and (f) of the Madras General Sales-tax Rules, 1939.

2. The amended rule defining the place of business is not retrospective in operation.

3. Learned Government Pleader, apart from supporting the view of the sales-tax authorities, contended that the petitioner has an adequate remedy under the Act itself and therefore this writ will not issue. As I am accepting the preliminary objection raised by the respondent, it is not necessary to express my view on the questions raised by the petitioner.

4. The relevant provisions of the Madras General Sales-tax Act (IX of 1939) as amended by later amending Acts in so far as they are relevant to the preliminary objection raised run as follows:

‘S. 9(1).’ Every dealer whose turnover is ten thousand rupees or more in a year shall submit such return or returns of his turnover, in such manner, and within such periods as may be specified in the rules made under sub-sec. (2) of S. 3.

‘S. 9(2)(a).’ If the assessing authority is satisfied that any return submitted under sub-sec. (1) is correct and complete, he shall assess the dealer on the basis thereof.

(b) If no return is submitted by the dealer under sub-sec. (1) before the date prescribed or specified in that behalf or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall proceed to determine the turnover in accordance with the rules made under sub-sec. (2) of S. 3:

Provided that before taking action under this clause, the dealer shall be given a reasonable opportunity of proving the correctness and completeness of any return submitted by him.

‘S. 11(i).’ Any assessee objecting to an assessment made on him may, within thirty days from the date on which he was served with notice of the assessment, appeal to such authority as may be prescribed;

Provided that no appeal shall be entertained under this sub-section unless it is accompanied by satisfactory proof of the payment of the tax admitted by the appellant to be due or of such instalments thereof as might have become payable as the case may be.

(2) ***

(3) The appellate authority may, after giving the appellant an opportunity of being heard pass such order on the appeal as such authority may think fit.

(4) Every order passed in appeal under this section shall, subject to the provisions of Ss. 12 to 12-C, be final.

S. 12(1): The Commercial Tax Officer may—

(i) ‘suo motu’, or

(ii) in cases in which an appeal does not lie to him under S. 11, on application,

call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by any officer subordinate to him for the purpose of satisfying himself as to the legality or propriety of such order, or as to the regularity of such proceeding, and may pass such order with respect thereto as he thinks fit.

(2) The Deputy Commissioner may—

(i) ‘suo motu’, or

(ii) in respect of any order passed or proceeding recorded by the Commercial Tax Officer under sub-sec. (1) or any other provision of this Act and against which no appeal has been preferred to the Appellate Tribunal under S. 12-A on application,

call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by any officer subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such order, or as to the regularity of such proceeding, and may pass such order with respect thereto as he thinks fit.

(3) The Board of Revenue may—

(i) ‘suo motu’, or

(ii) in respect of any order passed or proceeding recorded by the Deputy Commissioner under sub-section (2) or any other provision of this Act and against which no appeal has been preferred to the Appellate Tribunal under Sec. 12-A, on application, call for and examine the record of any order passed or proceeding recorded under the provisions of this Act by any officer subordinate to it, for the purpose of satisfying as to the legality or propriety of such order, or as to the legality of such proceeding, and may pass such order with respect thereto as it thinks fit.

‘Sec. 12-A (1)’:

5. Any assessee objecting to an order relating to assessment passed—

(i) by the Commercial Tax Officer whether on appeal under Sec. 11 or ‘suo motu’ under S. 12, sub-sec. (1) or,

(ii) by the Deputy Commissioner ‘suo motu’ under S. 12, sub-sec. (2),

may, if the assessee has not preferred an application for revision of the order under S. 12, sub-sec. (2), or under sub-sec. (3) of that section, as the case may be, appeal to the appellate Tribunal within thirty days from the date on which the order was communicated to the assessee.

(2) The Appellate Tribunal may admit an appeal preferred after the period of sixty days referred to in sub-sec. (1) if it is satisfied that the assessee had sufficient cause for not preferring the appeal within that period.

(3) ***

(4) The appellate tribunal shall, after giving both parties to the appeal a reasonable opportunity of being heard, pass such order thereon as it thinks fit.

(5) Notwithstanding that an appeal has been preferred under sub-sec. (1), lax shall be paid in accordance with the assessment made in the case;

Provided that the Appellate Tribunal may, in its discretion, permit the appellant to pay the tax in such number of instalments, or give such other directions in regard to the payment of the tax, as it thinks fit.

(6)(a) The Appellate Tribunal may, on the application either of the assessee or of the Deputy Commissioner, review any order passed by it under sub-sec. (4) on the basis of facts which were not before it when it passed the order;

………………………………………………

‘S. 12-B(1)’: Within sixty days from the date on which an order under S. 12-A, sub-sec. (4) or (6) was communicated to him, the assessee or the Deputy Commissioner may prefer a petition to the High Court against the order on the ground that the appellate Tribunal has either decided erroneously, or failed to decide, any question of law;

Provided that the High Court may admit a petition preferred after the period of sixty days aforesaid, if it is satisfied that the petitioner had sufficient cause for not preferring the petition within that period.

‘S. 12-C(1)’: Any assessee objecting to an order relating to assessment passed by the Board of Revenue ‘sou motu’ under S. 12, sub-sec. (3), may appeal to the High Court within sixty days from the date on which the order was communicated to him;

‘S. 12.D’: Every petition, application or appeal preferred to the High Court under Ss. 12 B and 12 C shall be heard by a Bench of not less than two Judges; and in respect of such petition, application or appeal, the provisions of Section 98 of the CPC, 1908, shall, so far as may be, apply.

6. It will be seen from the aforesaid provisions that the Madras General Sales-tax Act is a self-contained one and provides for a heirarchy of tribunals to enable the aggrieved person or authority to get a final and authoritative adjudication on the validity or the correctness of the assessments made by the sales-tax authorities. The petitioner ignores the entire machinery and seeks the and of this court which, if given, will circumvent the entire statutory procedure prescribed. The petitioner gives the following reasons in his affidavit for filing this writ under S. 226 of the Constitution of India:

“I submit that the Tirunelveli Jilla Jewellers and Bullion Mercahnts' Association in my district comprises about 100 members. The question is common to all of us and also to other bullion merchants in the State of Madras. In view of the decisions taken by the Sales-tax original and appellate authorities I have every reason to apprehend that the objections before the respondent will be overruled and that the remedy prescribed by the Sales-tax Act, if pursued would be long-delayed, ineffective and of no practical purpose since once a tax is assessed, its non-payment renders the assessee to prosecution and its payment is a condition precedent for the preferring of an appeal. I am not in a position to pay such a large tax and it is virtually impossible therefore for me to resort to the remedies prescribed by the Act.”

7. In my view, the fact that an assessee has got to pay the tax or that the remedy provided by the Act may involve delay or expenditure, is no ground for invoking this court's extraordinary jurisdiction. The question in this case depends upon the construction of the provisions of the Sales-tax Act and the Rules made thereunder. On their correct interpretation depends the rate of the tax. That question is essentially within the jurisdiction of the Tribunals created by the Act. It is also not accurate to say that the Tribunals created under the Act have already expressed an opinion against the petitioner for the appeal against the assessment of the year 1949-1950 is still pending before the Appellate Tribunal, and even if the decision of the Appellate Tribunal goes against him, he can file a revision to the High Court. Nor there are merits in the contention that he cannot have an interim relief till the Tribunal or the High Court finally disposes of this matter, though that fact in itself, even if true, cannot be a ground for entertaining a writ of prohibition. Under S. 11 of the Act he can prefer an appeal against the order of the assessing authority and under the proviso to the section the payment of the tax admitted only is the condition precedent for preferring the appeal. Further the Tribunal under S. 12 A can give directions in regard to the payment of the tax. Nor the circumstance that the decision may affect other persons is a ground for ignoring the statutory procedure and remedies. Even assuming there are some difficulties in the way of the petitioner, I do not think I am justified in issuing this extraordinary writ as the petitioner has an effective and satisfactory remedy under the Act itself. I should not be understood to have expressed any opinion on the merits of the contentions raised. The petition fails & is dismissed with costs. Advocates' fee Rs. 100.

B/G.M.J

8. Petition dismissed.