1959 (12) TMI 35 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the procedure for launching a prosecution under section 30(1)(a) and section 30(3)(a) of the Andhra Pradesh General Sales Tax Act is mutually exclusive to the levy of penalty under section 16(3) of the Act.
2. Whether section 30 of the General Sales Tax Act is violative of Article 14 of the Constitution.
3. Whether the levying of penalty under section 16(3) and the launching of prosecution under section 30(1)(a) offends Article 20(2) of the Constitution.

Issue-wise Detailed Analysis:

1. Mutual Exclusivity of Penalty and Prosecution:
The petitioner argued that the procedure for launching a prosecution under section 30(1)(a) and section 30(3)(a) for non-payment of the tax due should be an alternative to the levy of penalty under section 16(3) of the Act, and that one sanction excludes the other. The court held that this argument is "wholly untenable both in principle and on authority." The court clarified that the levy of penalty and the launching of prosecution are "two distinct sanctions" and "by no means mutually exclusive." Sub-section (5) of section 16 explicitly states that the penalty levied under the Act shall be "without prejudice to the institution of any proceeding for an offence under this Act." Hence, it is permissible for the department to both levy the penalty and initiate prosecution.

The court referenced the case of P. Sesha Reddy v. Excise Superintendent, Nalgonda, where it was observed that criminal and fiscal sanctions are "independent remedies" and "both of them can be availed." The court concluded that the imposition of penalty and the launching of prosecution are not mutually exclusive and both may be resorted to simultaneously.

2. Violation of Article 14 of the Constitution:
The petitioner contended that section 30(1) and section 30(3) deal with the same situation but prescribe different punishments, thus violating Article 14, which guarantees equality before the law. The court dismissed this contention, stating that Article 14 "forbids class legislation" but does not forbid "reasonable classification for the purposes of legislation." The court explained that the classification must be founded on an "intelligible differentia" which distinguishes persons or things that are grouped together from others left out of the group, and this differentia must have a "rational relation to the object sought to be achieved by the statute."

The court noted that section 30(1) and section 30(3) of the Act do not deal with the same situations. Section 30(1) deals with failure to pay tax, penalty, or fee, or failure to obtain registration, and prescribes only a fine. Section 30(3) deals with wilful submission of untrue returns, wilful failure to submit a return, or fraudulent evasion of payment of tax, and prescribes more severe punishments, including imprisonment for second or subsequent offences. The court concluded that the classification is based on an intelligible principle aimed at discouraging persistent evasion of tax and ensuring compliance with the Act, thus bearing a rational relation to the object of the Act.

3. Offense of Double Jeopardy under Article 20(2):
The petitioner argued that the levying of penalty and a possible prosecution violates the doctrine of double jeopardy enshrined in Article 20(2) of the Constitution, which states that "No person shall be prosecuted and punished for the same offence more than once." The court found this argument "wholly untenable," stating that the levy of penalty is not a prosecution. Article 20(2) requires both prosecution and punishment for the same offence to be applicable, which is not the case here.

The court cited several Supreme Court decisions, including Venkataraman v. The Union of India and Maqbool Hussain's case, to support the view that departmental actions or penalties do not constitute prosecution. Therefore, the levy of penalty under section 16(3) and the initiation of prosecution under section 30(1) or section 30(3) do not violate Article 20(2).

Conclusion:
The court concluded that the petitioner failed to prove any excess of jurisdiction by the respondent. The terms of the notice impugned in the writ petition were found to be within the scope and ambit of the statutory jurisdiction of the respondent. Consequently, the petition was dismissed with costs.

Result:
Petition dismissed with costs. Advocate's fee Rs. 100.

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