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1965 (1) TMI 63 - HC - VAT and Sales Tax
Issues Involved:
1. Whether non-payment of tax due for the year ending 31st December 1957, after the demand notice, constitutes a contravention of sub-rule (7) of rule 14-A of the Central Sales Tax (Andhra Pradesh) Rules, 1957. 2. Whether the prosecution of the accused is competent in law. 3. Interpretation of rule 14-A and its retrospective application. 4. Whether the breach of rule 14-A(7) is punishable under rule 16. 5. Jurisdiction of the criminal court in construing statutory provisions related to tax assessment. Detailed Analysis: 1. Non-payment of Tax and Contravention of Rule 14-A(7): The primary issue is whether the non-payment of tax due for the year ending 31st December 1957, after a demand notice, constitutes a contravention of sub-rule (7) of rule 14-A of the Central Sales Tax (Andhra Pradesh) Rules, 1957. Rule 14-A was introduced in 1958, and the act complained of (non-payment of tax) occurred after this rule came into force. The court analyzed whether the non-payment for a period before the introduction of rule 14-A could be punishable under rule 16 read with rule 14-A(7). The court concluded that the breach in relation to rule 14-A(7) made punishable by rule 16 must be for the period covered by sub-rules (1) and (2) of rule 14-A, which are prospective and do not cover the period ending 31st December 1957. 2. Competency of Prosecution: The court examined whether the prosecution was competent in law. The trial court acquitted the accused on the ground that non-payment of tax was not punishable under rule 16 as rule 14-A was not in force during the period for which the tax was due. The court upheld this view, stating that since the tax due relates to a period not falling within the ambit of sub-rules (1) and (2) of rule 14-A, non-payment thereof in due compliance with the demand notice is not punishable under rule 16 read with rule 14-A(7). 3. Interpretation of Rule 14-A and Retrospective Application: The court emphasized that no statute or its provision shall be construed to have a retrospective operation unless such construction appears clearly in the terms of the Act or arises by necessary and distinct implication. Rule 14-A, introduced in 1958, is prospective and does not apply to the period ending 31st December 1957. The court stated that the returns to be submitted under rule 14-A cannot relate to any period before its introduction. 4. Breach of Rule 14-A(7) and Punishment under Rule 16: The court analyzed whether the breach of rule 14-A(7) is punishable under rule 16. Sub-rule (7) is not self-contained and must be read with sub-rules (5) and (6), which in turn refer to sub-rules (1) and (2). The court concluded that non-payment of tax due for a period not covered by sub-rules (1) and (2) of rule 14-A is not punishable under rule 16. The breach must be in relation to a tax due from the month rule 14-A came into force or subsequent thereto. 5. Jurisdiction of Criminal Court in Construing Statutory Provisions: The court addressed the argument that a criminal court should not pronounce on the validity of the final assessment. It clarified that while a criminal court cannot sit in judgment on the assessment made by a competent authority, it is within its jurisdiction to construe statutory provisions to determine the guilt or innocence of the accused. The criminal court must ascertain whether the contravention constitutes an offence punishable under rule 16, and it is bound to interpret the relevant provisions in this context. Conclusion: The court upheld the trial court's order of acquittal, concluding that the non-payment of tax for the period ending 31st December 1957 is not punishable under rule 16 read with rule 14-A(7) as the rule does not apply retrospectively. The appeal was dismissed.
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