TMI Blog1958 (4) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... Crl. 221. , Public Prosecutor v. Khader Khan (1946) 2 M.L.J. 461; 1 S.T.C. 142., In re Appa Rao(1949) A.I.R. 1949 Mad. 418; 1 S.T.C. 211. and Venkanna, In re(1947) 2 M.L.J. 12 (Short Notes).; see per contra Narasingamuthu Chettiar, In re(1948) 2 M.L.J. 93; 1 S.T.C. 180. On account of the fact as pointed out by Sundara Vyas in his "Madras General Sales Tax Act", 2nd Edition, page 160, that the department found it difficult to prove all links in the chain needed to sustain the assessment in a Criminal Court which starts with a presumption in favour of the accused, and there was also need to avoid conflicting decisions of parallel courts, civil, criminal and revenue, on the same question, it was decided to oust the jurisdiction of Civil and Criminal Courts and section 16-A was enacted. The original proposal of the Government to oust the jurisdiction of Civil Courts also was dropped. But subsequently section 18-A has been enacted by Act VI of 1951 under which no suit or other proceedings shall, except as expressly provided in the Act be instituted in any court to set aside or modify any assessment made under this Act. We are concerned here only with section 16-A. In regard to this amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trary is Guruviah Naidu and Co. v. State[1954] 5 S.T.C. 129; 1954 M.W.N. Crl. 237., decided by Govinda Menon and Basheer Ahmed Sayeed, JJ. The judgment of the Court was delivered by Basheer Ahmed Sayeed, J. In that judgment after referring to the two decisions of single Judges, passing reference is made almost at the end of the judgment to Syed Mohamed and Co. v. State of Madras(1), in the following terms: "In Syed Mohamed and Co. v. State of Madras[1952] 3 S.T.C. 367; 65 L.W. 1030. relied on by the learned Advocate-General, a Bench of this Court has held that section 16-A of the General Sales Tax Act is valid and it cannot be said to be opposed to natural justice or repugnant to the Constitution, in view of the elaborate procedure that has been made available to the assessee to question the validity of the order at a stage prior to the attempt by the State for the realisation of the same. In that decision, the matter arose in a writ and the whole Act was contended to be ultra vires and it was held that the plea that the Act was ultra vires could not be raised before the Tribunal which owes its very existence to the Act. With respect, we do not think that the reasoning contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticorin, questioning the validity of the assessment. That suit was dismissed by the Subordinate Judge, Tirunelveli, to whose file the case had been transferred. As the tax was still not paid the Deputy Commercial Tax Officer, Koilpatti, laid a complaint against the assessee on 2nd April, 1956, before the Sub-Divisional Magistrate, Koilpatti, under section 15(b) of the Madras General Sales Tax Act. The learned Magistrate came to the conclusion that the accused was not assessable in respect of the year 1950-51 and acquitted him under section 245(1) of the Criminal Procedure Code. Against the order of acquittal the State preferred an appeal. Section 16-A of the Madras General Sales Tax Act runs as follows: "The validity of the assessment of any tax, or of the levy of any fee or other amount, made under this Act, or the liability of any person to pay any tax, fee or other amount so assessed or levied shall not be questioned in any Criminal Court in any prosecution or other proceeding, whether under this Act or otherwise." In Syed Mohamed and Co. v. State of Madras[1952] 3 S.T.C. 367; (1952) 2 M.L.J. 598., a Bench of this Court took the view that section 16-A of the Act is intra vires t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for example in the Sales of Motor Spirit Taxation Act. Section 24 of that Act gives to a person aggrieved by any order made by that Act only the right to one appeal; beyond that there is only a power of revision vested in the Board of Revenue. The Madras Entertainment Tax Act of 1939 does not give even this limited right of appeal. It may be mentioned here that section 18-A of the General Sales Tax Act provides that "No suit or other proceeding shall, except as expressly provided in this Act, be instituted in any court to set aside or modify any assessment made under this Act." But, we are not called upon to express any opinion on the validity or otherwise of this provision, and we want to make it plain that we refrain from doing so. The learned Advocate-General placed before us practically all the decisions that have a bearing on the question we have to decide. We propose, however, to examine only the more important of them. Of these the earliest is reported in Kamayya v. Leman(1879) I.L.R. 2 Mad. 37. The facts there were as follows: Under Madras Act III of 1871 the Commissioners of the Municipality of Guntur levied and collected profession tax for the year 1876-77 from the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madras Act III of 1904 provides 'that all complaints against and all applications for revision of classification in respect of any tax or toll leviable under Part IV shall be heard and decided by the President and two Commissioners.' Section 175 provides an appeal against the order of the President and two Commissioners to Magistrates. Section 176 authorises a reference by the Magistrate to the High Court. Section 177 declares the finality of the decision of the respective authorities in the following terms: 'The assessment, revision or demand of any tax or toll, when no complaint, application or objection is made as hereinbefore provided, and the adjudication of an appeal by the Magistrate shall be final'. It will be noticed that the declaration of finality is not merely with reference to the decision of Magistrates or of the President and Commissioners, but, in case no complaint or objection is made, with reference also to the original assessment." The Commissioner, Municipal Council, Vizagapatnam v. Siddessara Devi(1948) 2 M.L.J. 111. is the next case we would refer to. The facts are set in the first paragraph of the headnote: "Upto 1940 a house and site of about 4 acres had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h determination has to be made after notice to the assessee and it is open to appeal and further revision. Where the assessees were duly served with notice under the Act and had ample opportunity of putting forward before the Tribunals all contentions based on the provisions of the Act or the Rules thereunder but did not avail themselves of it, they cannot be permitted to put forward in a writ petition questioning the validity of the Act or Rules the contentions which were available to them before the Tribunals. The only plea that will be open to them in the writ proceedings are those which could not have been urged before the Tribunals. Such for example will be the plea that the Act is ultra vires, such a plea could not obviously be entertained by the Tribunal which owes its very existence to the Act. Where tax is determined after notice to the assessees 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 in section 16-A of the Sales Tax Act is analogous to the rule which precludes the judgment-debtors from putting forward at the stage of execution of a decree defen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eatly assist the appellant on the question of construction and, indeed, it may be added that, if there were no such machinery, and if the section affected to preclude the High Court in its ordinary civil jurisdiction from considering a point of ultra vires, there would be a serious question whether the opening part of the section, so far as it debarred the question of ultra vires being debated, fell within the competence of the Legislature. In their Lordships' view it is clear that the Income-tax Act, 1922, as it stood at the relevant date, did give the assessee the right effectively to raise in relation to an assessment made on him the question whether or not a provision in the Act was ultra vires. Under section 30, an assessee whose only ground of complaint was that effect had been given in the assessment to a provision which he contended was ultra vires might appeal against the assessment. If he were dissatisfied with the decision on appeal-the details relating to the procedure immaterialthe assessee could ask for a case to be stated on any question of law for the opinion of the High Court and, if his request were refused, he might apply to the High Court for an order requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopen the assessments for those years and to quash the assessments as they had become a nullity in view of the Privy Council decision holding that the assessee's property was exempt from taxation by virtue of section 4(3)(i) of the Act. It was rejected by the Commissioner. On a case being stated by the Commissioner of Income-tax under the directions of the High Court, Lahore, that Court held that the assessments in question were a nullity and that the assessee could not be denied the relief he claimed under section 33 on any valid ground. The Commissioner appealed to the Privy Council. Their Lordships allowed the appeal and observed: "Upon this footing, then the argument must be that the assessee has a right enforceable against the Commissioner to require refund of tax paid by him upon grounds of equity and goods conscience, though the assessment has been made and the tax received in good faith. Their Lordships cannot accept this argument. They have reviewed the Code of Income-tax law for the purpose of showing that it exhaustively defines the obligations and remedies of the taxpayer. It would be wholly incompatible with this that he should have a collateral right, necessarily va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the case to the High Court. The High Court accepted the reference. Phillips, J., observed: "Gopayya made no application for a licence and no licence has been issued. If then there has been no grant of licence, the licence fee payable under the Act cannot be said to be due within the meaning of section 221 and that section is inapplicable. The order of the SubMagistrate is therefore wrong and must be set aside..........." Madhavan Nair, J., added, "There is no provision in the Act empowering the Local Board to fix a penalty for erecting a pandal without a licence as there is, for example, provision for levying a fine for unauthorised encroachment under section 164 of the Act which may be recovered under section 221. Nor can the Local Board levy fees without granting a licence." It would be appreciated that this is a case in which the court found in effect that the claim made by the Union Board did not arise under the Act at all. The second case is reported in Chairman, Municipal Council, Chidambaram v. Tirunarayana Iyengar(1928) 51 Mad. 876. That was a case under the District Municipalities Act. A person had been granted a licence by the Municipal Council, Chidambaram, for keepi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f. The fees leviable from the petitioner amounted to Rs. 10 for each of his buses. He refused to pay, whereupon the Board prosecuted him under section 221 of the Local Boards Act. Before the Magistrate the petitioner contended that the fee was not legally leviable. The Board replied that such a contention was not open to him. The Magistrate held that he had no jurisdiction to consider the legality of the fee. A Bench of this Court consisting of Waller and Pandalai, JJ., held that he had jurisdiction. An examination of the judgment shows that the amount claimed by the Tindivanam Board could not have been claimed under the Act at all. Section 184 of the Local Boards Act empowered a Board to construct or provide public landing places, halting places and cart stands. This Court held that the stand which the Tindivanam Union Board had set up was neither a public landing place, nor a halting place, nor a cart stand. When we examine the facts of this case it is found that the Board was making a claim which did not arise under the Act at all. We shall refer to only one more decision in this series. That is reported in Thiruvengadasami v. Municipal Health Officer, Karaikudi(1950) I.L.R. 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessment or demand of any tax, when not appeal was made, as therein before provided, and when such an appeal was made, the adjudication of the Council thereon shall be final, (we are leaving out the proviso) it was observed, "the said finality is only for the purpose of the Act and it has been held that the said finality would not prevent a person from impeaching the legality or validity of the assessment in a Civil Court." In respect of this decision we would point out that the earlier decisions of this Court in Kamayya v. Leman(1879) 2 Mad. 37. and Veeraraghavalu v. The President, Corporation of Madras(1911) 34 Mad. 130., do not appear to have been brought to the notice of the learned Judges. The decision in Public Prosecutor v. Khader Khan(1946) 1 S.T.C. 142; (1946) 2 M.L.J. 461. does not carry the matter any further forward because it merely follows the decision in Ramaswami Aiyangar v. Sivakasi Municipality(1936) M.W.N. Crl. 221; (1937) 1 M.L.J. 274. without any discussion. The decision in Public Prosecutor v. Chakka Kondappa(1947) 1 M.L.J. 317. is also that of a single Judge and it was clearly influenced by the decision in Ramaswami Aiyangar v. Sivakasi Municip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Tribunal and finally come to this Court. In fact, he might have gone to the Supreme Court. After the amount payable has been ascertained at so high a level and when thereafter the amount is sought to be recovered from him by prosecuting him before a Magistrate to say that he can be allowed to plead that he is not liable or that he is liable only in a different amount, is tantamount to calling upon the Magistrate to adjudicate on questions which have been settled by the higher Courts in the land. That would be a very anomalous state of things indeed. And that will not be the end of the matter. For should the Magistrate overrule him and convict him, he can go up in appeal and again in revision. In other words, the matter which one would have supposed to have been finally adjudicated upon and settled is reopened and set at large. It must also be realised that in the actual administration of the Act it will not be practicable to place before the Magistrate all the material that the authorities empowered to take action under the Act can collect. The Magistrate is bound by the Evidence Act and the strict rules of procedure and this may often be wholly unsuited and inapplicable to asc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n whom powers had been conferred by various enactments would act in a reasonable manner. If they fail to do so and an abuse of the process of Court is likely to occur the party concerned can always come to this Court and ask for relief. The validity of an enactment cannot be determined on the assumption that all the authorities concerned would act in an unreasonable or improper manner. We consider that the decision in Guruviah Naidu, In re(1), and in the earlier cases in that series to be erroneous and overrule the same. On this case, Guruviah Naidu, In re[1954] 5 S.T.C. 129; I.L.R. 1955 Mad. 184., one further observation remains to be made. In Sesham v. Narasimha RaoI.L.R. 1940 Mad. 454. , a Full Bench of this Court observed: "The Division Bench is the final Court of Appeal in an Indian High Court, unless the case is referred to a Full Bench, and one Division Bench should regard itself bound by the decision of another Division Bench on a question of law. In England, where there is the Court of Appeal Divisional Courts follow the decisions of other Divisional Courts on the grounds of judicial comity...................... If a Division Bench does not accept as correct the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have indicated what our view of the matter is. We, however, re-state them. When a person is prosecuted, under section 16-A of the General Sales Tax Act it will not be open to him to raise any objection, plea or contention which he could have raised before the authorities set up under the General Sales Tax Act; it will be open to him to raise only those pleas, objections and contentions which those authorities are precluded from entertaining One example of such a contention would be that the Act or any particular provision of it is ultra vires. In addition to such pleas the accused person can also show for example that he is not the person assessed or that he has paid the amount in respect of which he has been assessed. It is only pleas in such categories that will be open to him. We answer the question referred to us accordingly. This appeal came on for final hearing and the Court (Ramaswami, J.) passed the following order on 23rd April, 1958. ORDER On the answer returned by the Full Bench the acquittal by the lower Court cannot stand. The acquittal is set aside, and the accused is convicted for an offence punishable under section 15(b) of the Madras General Sales Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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