1971 (4) TMI 80 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity and enforceability of the certificate issued by the Collector of 24 Parganas.
2. Whether the petitioner can question the validity or correctness of the order of assessment in the recovery proceedings.

Detailed Analysis:

Issue 1: Validity and Enforceability of the Certificate

The court examined the legal provisions governing the issuance and enforcement of certificates for tax recovery. The demand for collection arose from an assessment order under the Bengal Finance (Sales Tax) Act, 1941. According to Section 11(4) of the Act, any unpaid tax or penalty is recoverable as an arrear of land revenue.

The Bengal Public Demands Recovery Act, 1913, applicable in West Bengal, allows recovery of public demands as arrears of land revenue. The Revenue Recovery Act, Central Act 1 of 1890, extends to all of India except Jammu and Kashmir, and provides for the recovery of certain public demands. Sections 3 and 5 of the Revenue Recovery Act outline the procedure for recovering sums as arrears of land revenue, including issuing certificates to Collectors of other districts.

The court found that the procedure followed by the Commercial Tax Officer of Calcutta and the Collector of 24 Parganas was in accordance with these statutory provisions. The argument that only Section 5 of the Revenue Recovery Act could be invoked, and that citing Section 3 in the certificate was a vitiating circumstance, was rejected. Section 3 is the principal section for recovery, and Section 5 imports its provisions by equating public demands with land revenue for recovery purposes.

The court also rejected the argument that "district" or "another district" refers only to districts within the same state. The Revenue Recovery Act applies to the entire Indian Union, and the definition of Collector refers to a district officer in charge of land revenue administration.

The court concluded that the certificate issued by the Collector of 24 Parganas and the subsequent actions by the Deputy Commissioner of Bangalore Urban District were valid and legally enforceable. The machinery for recovery of land revenue in Mysore was correctly invoked.

Issue 2: Questioning the Validity or Correctness of the Order of Assessment

The court referred to Section 3(3) of the Revenue Recovery Act, which mandates that the Collector receiving the certificate must treat the amount as an arrear of land revenue accrued in his district and proceed with recovery accordingly. The Collector is prohibited by law from questioning the validity of the assessment order.

Section 4 of the Revenue Recovery Act allows a person to deny liability by paying under protest and filing a suit for repayment. However, this does not permit questioning the assessment order in recovery proceedings.

The petitioner argued that the assessment order was a nullity due to lack of jurisdiction, citing two reasons: lack of reasonable opportunity to show cause and the assessment being made by an officer not authorized to do so. The court found that the Commissioner of Commercial Taxes could delegate powers to the Commercial Tax Officer, and the delegation was presumed regular.

The petitioner also contended that the Commercial Tax Officer lacked jurisdiction as the petitioner did not have a place of business in Calcutta. The court held that the jurisdictional fact was within the Commercial Tax Officer's purview to decide, and the petitioner did not take steps under the Bengal Act to rectify the order.

The court noted that the petitioner was served with a notice of demand before 16th December 1957, and failed to take available steps under the Bengal Act. Therefore, the petitioner could not now seek to quash the order under Article 226 of the Constitution.

Conclusion:

The writ petition was dismissed, and the petitioner was ordered to pay costs to the first respondent, the Commercial Tax Officer, Calcutta. The court upheld the validity and enforceability of the certificate issued by the Collector of 24 Parganas and ruled that the petitioner could not question the assessment order in recovery proceedings.