1957 (7) TMI 28 - HC - VAT and Sales Tax

Summary

Issues:
Appeal against acquittal under section 15(b) of the Madras General Sales Tax Act, 1939; Dispute over excessive assessments; Validity of assessments challenged by accused; Interpretation of section 15(b) and failure to pay tax assessed; Impact of Madras Act XV of 1956 on the offenses committed before its enactment; Retrospective operation of the amending Act; Application of Madras General Clauses Act; Sentencing considerations for the offense under section 15(b).

Analysis:
The High Court of Kerala heard the State's appeal against the acquittal of the accused under section 15(b) of the Madras General Sales Tax Act, 1939. The accused contested the assessments, claiming they were excessive due to various reasons such as lack of exemptions for sales outside the State or inter-State sales. However, the Court held that the essence of the offense under section 15(b) is the assessment under the Act and the failure to pay the tax assessed. The Court emphasized that the validity or propriety of the assessment is not open for inquiry, as section 16-A of the Act prohibits such examination. Despite a previous decision declaring section 16-A void, the Court chose to follow precedents upholding its validity, thereby affirming the importance of paying the assessed tax within the specified time.

The Court addressed the impact of Madras Act XV of 1956, which substituted section 15 of the principal Act with a new section, omitting the original section 15(b). The accused argued that the repeal of the old section should be retrospective, thereby affecting their liability. However, the Court disagreed, stating that the repeal cannot impact offenses committed before the enactment of the amending Act. The Court highlighted that the amending Act's wording and lack of retrospective provision indicate prospective application, rejecting the argument for retrospective effect. The Court cited a relevant decision to support its stance against retrospective application.

In conclusion, the Court allowed the appeals and convicted the accused under section 15(b) of the Act, considering the legislative intent to not criminalize mere failure to pay tax. As a result, the Court imposed a nominal fine in each case, along with specifying the arrears of tax due from the accused. The Court's decision reflects a balanced approach, recognizing the legislative changes while upholding the importance of fulfilling tax obligations under the Act.