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State Of Kerala And Others. v. C.M Francis And Co. And Others
Factual and Procedural Background
C.M. Francis & Co., a partnership firm trading in hill produce, was assessed to sales tax under the Travancore-Cochin General Sales Tax Act, 1125 (Act 11 of 1125) for the years 1950-1954, leaving arrears amounting to Rs 1,01,716-4-3. Initial recovery proceedings were initiated under Section 13 of the Act (recovery as arrears of land revenue) but proved ineffective. Consequently, the partners were prosecuted under Section 19 of the Act before a First Class Magistrate at Ponkunnam. Upon their plea of guilt, each partner was fined Rs 50 and, crucially, the Magistrate directed that the unpaid tax be recovered “as if it were a fine.”
Following this criminal order, warrants under Section 386(1)(b) CrPC were issued to the Collector for recovery. Simultaneously, revenue authorities again invoked Section 13 of the Act read with the Travancore-Cochin Revenue Recovery Act, 1951, attaching properties in Kottayam and Kanjirappally Taluks. The firm petitioned the Kerala High Court under Article 226 for a writ of prohibition, contending that once the criminal process was employed, revenue-recovery proceedings were barred. The High Court accepted that contention and issued the writ on 18 November 1957. The State of Kerala and its Tahsildars appealed to the Supreme Court by special leave.
Legal Issues Presented
- Whether the availability and exercise of the criminal recovery mechanism under Section 19 of the Travancore-Cochin General Sales Tax Act, read with Section 386 CrPC, excludes or bars the parallel civil recovery mechanism provided in Section 13 of the same Act.
Arguments of the Parties
Respondents (C.M. Francis & Co. and Partners)
- Once the Magistrate issued warrants under Section 386 CrPC directing recovery “as if it were a fine,” the tax liability must be executed only through civil-decree procedures under the Code of Civil Procedure.
- The special procedure under Section 19, being invoked and in force, supersedes the more general recovery provision of Section 13; hence fresh proceedings under the Revenue Recovery Act are without jurisdiction.
Appellants (State of Kerala and Tahsildars)
- The statute provides two independent and cumulative remedies; the choice between them lies with the revenue authorities.
- Nothing in the Act expressly or by necessary implication restricts recourse to Section 13 after or alongside proceedings under Section 19.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Shankar Sahai v. Din Dial (1889) ILR 12 All 409 | Where a statute offers two or more remedies, one does not inherently bar the other unless the statute so provides expressly or by necessary implication. | The Supreme Court adopted Mahmood, J.’s observation to affirm that both Section 13 and Section 19 remedies remain concurrently available to tax authorities. |
Court's Reasoning and Analysis
The Supreme Court noted that both Sections 13 and 19 ultimately employ similar processes—attachment and sale of property—to recover tax dues. Section 19 adds penal consequences (fine and possible imprisonment) but does not expressly state that its invocation nullifies Section 13. Relying on the principle articulated in Shankar Sahai v. Din Dial, the Court held that, absent an explicit statutory bar, concurrent remedies may be pursued. The High Court’s characterization of Section 13 as “general” and Section 19 as “special” was rejected because both sections target the same objective through overlapping procedural mechanisms. Therefore, initiation of proceedings under Section 19 does not preclude simultaneous or subsequent resort to Section 13.
Holding and Implications
Appeal Allowed; High Court judgment set aside.
Immediate Effect: The writ of prohibition issued by the Kerala High Court is vacated, permitting the revenue authorities to continue recovery of the arrears under Section 13 of the Travancore-Cochin General Sales Tax Act and the Travancore-Cochin Revenue Recovery Act, notwithstanding the criminal recovery proceedings already in motion.
Broader Implications: The decision confirms that, in the absence of express statutory exclusion, revenue authorities may simultaneously or successively deploy multiple statutory mechanisms to recover tax arrears. No new doctrinal precedent was created, but the ruling reinforces concurrent-remedy principles in tax recovery contexts.
Hidayatullah, J.— This is an appeal with the special leave of this Court against the judgment of the High Court of Kerala dated November 18, 1957, passed in a petition for writ of prohibition under Article 226 of the Constitution. The State of Kerala and the Tahsildars of Kottayam and Kanjirappally Taluks are the appellants, and C.M Francis & Co., a partnership firm, is the first respondent, and the partners of the firm are the remaining respondents.
2. The respondents were doing business in hill produce like pepper, ginger, betelnuts etc. and were assessed to sales tax under the Travancore-Cochin General Sales Tax Act 11 of 1125 (referred to as “the Act”), for the years 1950 to 1954. The respondents have to pay a sum of Rs 1,01,716-4-3 as tax. In 1954, proceedings were started against them under Section 13 of the Act, which provides that if the tax is not paid as laid down in that section, the whole of the amount or such part thereof as remains due, may be recovered as if it were an arrear of land revenue. It appears that the proceedings were not fruitful, and a prosecution under Section 19 of the Act was instituted against the partners in the Court of the First Class Magistrate, Ponkunnam. Respondents 2 to 5 pleaded guilty, and the Magistrate passed an order on October 18, 1955 as follows:
“The sentence or other final order.— A-1 to 4 sentenced to pay a fine of Rs 50 each and in default to undergo SI for one month each. A-1 to 4 admit that they failed to pay on demand by the competent authority, a sum of Rs 1,01,716-4-3 due from them as sales tax for the years 1950 to 1954. This amount will be realised from A 1 to 4, jointly or severally, individually or collectively under the provisions of the CrPC for realisation of criminal fines, as if it were a fine imposed by this court on each accused individually and all of them together. Take steps for the realisation.”
3. Warrants under Section 386(1)(b) of the Code of Criminal Procedure were issued to the Collector of Kottayam district for recovery of the arrears of sales tax. The authorities, however, started proceedings again under Section 13 of the Act read with the provisions of the Travancore-Cochin Revenue Recovery Act, 1951 (7 of 1951), to recover the amount as arrears of land revenue, and attached some properties belonging to the respondents within the jurisdiction of the second and third appellants, the Tahsildars of Kottayam and Kanjirappally Taluks. The firm thereupon filed the petition under Article 226 of the Constitution for a writ of prohibition or other order or direction to the effect that the proceedings for realisation of the arrears under the Revenue Recovery Act be quashed. In the petition, the respondents urged that inasmuch as they were prosecuted under Section 19 of the Act and the Magistrate had issued warrants, the procedure for recovery under Section 13 was not available. They contended that under Section 386 of the Code of Criminal Procedure the warrant is to be deemed to be a decree and has to be executed according to civil process applicable to the execution of decrees under the Code of Civil Procedure. They, therefore, submitted that the procedure under Section 19 of the Act was no longer open, and could not be proceeded with.
4. Section 19 of the Act, so far as it is material, reads as follows:
“Any person who,...
(b) fails to pay within the time allowed, any tax assessed on him … under this Act, or …
(d)fraudulently evades the payment of any tax assessed on him …
shall on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees and in the case of a conviction under clause (b), (d) …, the Magistrate shall specify in the order the tax … which the person convicted has failed or evaded to pay … and the tax so specified shall be recoverable as if it were a fine under the Code of Criminal Procedure for the time being in force.”
5. In dealing with the question, the learned Judges of the High Court felt that Section 13 of the Act was in the nature of a general law, over which the special procedure prescribed by Section 19 of the Act read with Section 386 of the Code of Criminal Procedure was to prevail. They, however, thought that, since all the processes available under Section 19 of the Act were also available under Section 386 of the Code of Criminal Procedure, it was not necessary to decide what would happen if the proceedings under Section 386 came to nothing. They observed that if the question arose, they would consider it. The writ of prohibition was granted by the High Court.
6. The respondents did not appear in this Court. We have heard learned counsel for the appellants, who has drawn our attention to all the relevant provisions of the law. The question which arises is whether Section 19 must be taken to prevail over Section 13 of the Act. Both the sections lay down the mode for recovery of arrears of tax, and, as has already been noticed by the High Court, lead to the application of the process for recovery by attachment and sale of movable and immovable properties, belonging to the tax evader. It cannot be said that one proceeding is more general than the other, because there is much that is common between them, insofar as the mode of recovery is concerned. Section 19, in addition to recovery of the amount, gives the power to the Magistrate to convict and sentence the offender to fine or in default of payment of fine, to imprisonment. In our opinion, neither of the remedies for recovery is destructive of the other, because if two remedies are open, both can be resorted to, at the option of the authorities recovering the amount. It was observed by Mahmood, J., in Shankar Sahai v. Din Dial (1889) ILR 12 All 409 that where the law provides two or more remedies, there is no reason to think that one debars the other and therefore both must be understood to remain open to him, who claims a remedy. Unless the statute in express words or by necessary implication laid down that one remedy was to the exclusion of the other, the observations of Mahmood, J., quoted above must apply. In our opinion, in the absence of any such provision in the Act, both the remedies were open to the authorities, and they could resort to any one of them at their option.
7. The appeal is allowed, and the judgment of the High Court set aside. Though the respondents did not appear, in the circumstances of the case, we think we should make an order that the costs shall be paid by them both here and in the High Court.
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