1957 (9) TMI 34 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Failure to apply for a licence.
2. Failure to pay the licence fee.
3. Validity of the licence fee as a tax or fee.
4. Compliance with the turnover requirement for licence application.
5. Legality of recovering the licence fee as if it were a fine.

Detailed Analysis:

1. Failure to Apply for a Licence:
The petitioners, who are dealers in cotton yarn, failed to apply for a licence for the year 1955-56 by the required date of 30th September 1955. They submitted their application late on 22nd November 1955, after being notified by the General Sales Tax department. The court found that the petitioners had omitted to submit their application in time under rule 5(1) of the Madras General Sales Tax Rules.

2. Failure to Pay the Licence Fee:
The petitioners did not pay the licence fee along with their late application. Rule 6(4)(a) mandates that the licence fee should be paid along with the application. The court held that the petitioners were guilty of failing to pay the licence fee, an offence punishable under section 15(b) of the Madras General Sales Tax Act and rule 32 of the General Sales Tax Rules.

3. Validity of the Licence Fee as a Tax or Fee:
The petitioners contended that the licence fee of Rs. 150 was more in the nature of a tax than a fee. This issue had already been decided in a previous case (W.Ps. Nos. 85 of 1956) by a Bench of the High Court, which held that the fee was not a tax and did not infringe Article 19(1)(g) of the Constitution. The court agreed with this previous decision and did not revisit the issue.

4. Compliance with the Turnover Requirement for Licence Application:
The petitioners argued that their turnover for the year 1955-56 was less than Rs. 7,500, and therefore, they were not required to apply for a licence or pay the fee. However, their application showed an estimated turnover of Rs. 53,000, which exceeded the minimum prescribed turnover. The court found that the petitioners were bound to apply for the licence and pay the fee based on their estimated turnover. The court also noted that if the actual turnover was less than the prescribed minimum, the petitioners could claim a refund, but this did not exempt them from the initial obligation to apply and pay the fee.

5. Legality of Recovering the Licence Fee as if it Were a Fine:
The petitioners contended that recovering the licence fee as if it were a fine was illegal. The court dismissed this contention, stating that the rules clearly allowed the court to direct the recovery of the licence fee in addition to any fine imposed, as if it were a fine.

Conclusion:
The court found no merit in the petitioners' arguments and upheld their conviction and sentence. The petitioners were sentenced to pay a fine of Rs. 10 each for the first count and Rs. 20 each for the second count, with default sentences of simple imprisonment for ten days and twenty days, respectively. Additionally, the court directed the petitioners to pay the licence fee of Rs. 150, recoverable as if it were a fine. The revision petition was dismissed.