1956 (9) TMI 51 - HC - VAT and Sales Tax

Summary

Issues:
1. Acquittal of the respondent under section 14(b) of the U.P. Sales Tax Act.
2. Interpretation of "wilful default" under section 14(b) of the U.P. Sales Tax Act.
3. Applicability of defenses against assessment in criminal prosecutions.
4. Competency of appeals by the State against acquittal under section 14(b) of the U.P. Sales Tax Act.

Detailed Analysis:

1. The judgment involves two appeals by the Government against the acquittal of the respondent under section 14(b) of the U.P. Sales Tax Act. The respondent had been assessed for sales tax for two consecutive years but failed to make the payments within the stipulated time. Despite notices and opportunities to show cause, the respondent did not pay the assessed tax amounts, leading to criminal complaints. The trial court acquitted the respondent based on the view that the offense would only be complete when all legal remedies had been exhausted and the assessment became final and binding.

2. The court analyzed the concept of "wilful default" under section 14(b) of the U.P. Sales Tax Act. It was established that the failure to pay tax under this section does not require dishonesty but must be intentional and deliberate. The court referred to a previous judgment to explain that wilful default means a deliberate failure to pay after considering the circumstances. The respondent's deliberate failure to pay, even after appeals and revisions, indicated wilful default, regardless of challenging the assessment's validity. The respondent was found guilty of wilful non-payment under section 14(b) of the Act.

3. The judgment clarified that the respondent had the right to present defenses, including challenging the assessment's validity. However, the mere filing of appeals did not absolve the respondent from liability. Despite relief granted in appeal proceedings, the respondent's failure to pay the outstanding tax amounts led to his conviction under section 14(b) of the U.P. Sales Tax Act. The court emphasized that the magistrate's role was to ensure compliance with legislative provisions, not to question legislative policy.

4. The judgment addressed the competency of appeals by the State against acquittals under section 14(b) of the U.P. Sales Tax Act. It was argued that the Act did not provide for such appeals, making them incompetent. However, the court clarified that the Criminal Procedure Code applied to trials for offenses under section 14(b), allowing appeals under section 417 of the Code. Consequently, the appeals by the Government against the respondent's acquittal were deemed competent, leading to the respondent's conviction and sentencing in both cases.