1960 (4) TMI 60 - HC - VAT and Sales Tax

Issues Involved:
1. Liability of the petitioner for sales tax arrears of the deceased father.
2. Validity of the distraint notice issued under the Revenue Recovery Act.
3. Applicability of the Madras General Sales Tax Act and Andhra Pradesh General Sales Tax Act.
4. Validity of Rule 23 under Section 39(2)(o) of the Andhra Pradesh General Sales Tax Act.
5. Availability of an alternative remedy under Section 59 of the Revenue Recovery Act.

Detailed Analysis:

1. Liability of the Petitioner for Sales Tax Arrears of the Deceased Father:
The petitioner contended that he had no involvement in his father's business and was neither a dealer nor an assessee under the Madras General Sales Tax Act. Therefore, he argued that he was not liable to pay the arrears of sales tax. The court, however, held that the arrears of sales tax are a debt exigible from the estate of the dealer. The petitioner, as the son of the deceased assessee, is liable to pay the arrears to the extent of the assets left by his father and now in his possession. The court emphasized that the arrears of sales tax could be collected from the estate of the deceased as if it were a debt, citing the English doctrine relating to the priority of Crown debts as applicable in India.

2. Validity of the Distraint Notice Issued under the Revenue Recovery Act:
The petitioner argued that the distraint notice was illegal in the absence of a valid demand notice. The court found no merit in this contention, stating that the sum paid on 8th May, 1951, had been adjusted towards the sales tax due from Sriramulu for the year 1948-49, and the amount due under the impugned notice remained unpaid. The court held that a lawful demand for the payment of the arrears due from Sriramulu was made on the petitioner, and if the petitioner did not pay it, he could be regarded as a defaulter.

3. Applicability of the Madras General Sales Tax Act and Andhra Pradesh General Sales Tax Act:
The petitioner contended that there was no provision in the Madras General Sales Tax Act for collecting arrears of sales tax from a legal representative of a deceased person. The court noted that the Madras General Sales Tax Act was repealed by the Andhra Pradesh General Sales Tax Act, which came into force on 15th June, 1957. Section 41 of the Andhra Pradesh Act provides that the repeal shall not affect any obligation or liability already accrued under the repealed enactment, and all arrears of tax may be recovered as if they had accrued under the new Act. Thus, the court held that the arrears could be recovered under the Andhra Pradesh General Sales Tax Act.

4. Validity of Rule 23 under Section 39(2)(o) of the Andhra Pradesh General Sales Tax Act:
The petitioner argued that Rule 23 was invalid as it was in excess of legislative sanction. The court, however, held that Section 39(2)(o) of the Andhra Pradesh General Sales Tax Act specifically authorizes the State Government to make rules for the assessment and recovery of tax in respect of a business of a deceased person. The court found that Rule 23, which provides for the liability of the executor, administrator, successor in title, or other legal representative to pay the tax out of the estate of the deceased dealer, was valid and within the legislative framework. The court rejected the argument of excessive and unauthorized delegation of legislative functions.

5. Availability of an Alternative Remedy under Section 59 of the Revenue Recovery Act:
The court noted that under Section 59 of the Revenue Recovery Act, there is a specific effective alternative remedy by way of a suit. The section provides that parties aggrieved by any proceedings under the Act can apply to the Civil Courts for redress, provided the suit is instituted within six months from the time the cause of action arose. The court held that the writ petition should fail for this reason as well.

Conclusion:
The writ petition was dismissed with costs, and the court held that the petitioner was liable to pay the arrears of sales tax due from his deceased father. The distraint notice was found to be valid, and Rule 23 under Section 39(2)(o) of the Andhra Pradesh General Sales Tax Act was upheld as a valid provision for recovering tax from the legal representatives of a deceased dealer. The court also emphasized the availability of an alternative remedy under Section 59 of the Revenue Recovery Act.

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