1972 (10) TMI 119 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of Section 49(1) of the Madras General Sales Tax Act, 1959
2. Allegation of trespass and mala fide action by tax officers
3. Requirement of government sanction for filing a suit under Section 49(1)
4. Constitutionality under Article 14 and Article 19(1)(f) of the Indian Constitution

Issue-wise Detailed Analysis:

1. Validity of Section 49(1) of the Madras General Sales Tax Act, 1959:
The court examined whether Section 49(1) of the Madras General Sales Tax Act, 1959, which requires prior government sanction to file suits against officers for acts done under the Act, is constitutionally valid. The plaintiff argued that this section is ultra vires and constitutionally invalid, particularly under Article 14 and Article 19(1)(f) of the Indian Constitution. The court ultimately upheld the validity of Section 49(1), stating that the right of access to courts can be excluded by statute in exceptional circumstances to protect public officers from frivolous suits, provided such restrictions are reasonable and in the public interest.

2. Allegation of Trespass and Mala Fide Action by Tax Officers:
The plaintiff alleged that the Assistant Commercial Tax Officers illegally trespassed into its business premises, seized goods, and refused to release them despite protests. The officers were accused of acting with a show of force and police authority, demanding payment of arrears from another firm with which the plaintiff had no connection. The plaintiff claimed that the officers' actions were mala fide, intended to insult, intimidate, and annoy, resulting in damages including loss of reputation and damage to goods.

3. Requirement of Government Sanction for Filing a Suit under Section 49(1):
The defendants argued that the suit was barred under Section 49(1) of the Madras General Sales Tax Act, which requires prior government sanction for suits against officers for acts done under the Act. The plaintiff contended that this requirement was unconstitutional. The court noted that the government could refuse sanction only if the suit appeared frivolous or lacked a prima facie case. The court emphasized that the government's refusal to grant sanction could be challenged if it was based on improper grounds.

4. Constitutionality under Article 14 and Article 19(1)(f) of the Indian Constitution:
The plaintiff initially argued that Section 49(1) violated Article 14 (equality before the law) and later contended it contravened Article 19(1)(f) (right to property). The court discussed that while Section 49(2) protected officers acting in good faith, Section 49(1) imposed an unreasonable restriction on the right to seek redress for unauthorized and mala fide acts. However, the court concluded that the provision was a reasonable restriction in the public interest, ensuring protection for officers performing statutory functions and preventing frivolous suits. The court rejected the lower court's reasoning that Section 49(1) provided unguided discretion to the government and violated Article 14.

Conclusion:
The court upheld the validity of Section 49(1) of the Madras General Sales Tax Act, 1959, stating that the requirement of prior government sanction for filing suits against officers was a reasonable restriction in the public interest and did not violate the constitutional rights under Articles 14 and 19(1)(f). The reference was answered accordingly, affirming the constitutionality of the contested provision.