1955 (3) TMI 19 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether Section 21 of the Travancore-Cochin General Sales Tax Act, 1125, is ultra vires of the Constitution.
2. Whether Section 21 is ultra vires of the provisions of the Code of Criminal Procedure, 1898.
3. Whether Section 21 is ultra vires of the Indian Evidence Act, 1872.

Issue-wise Detailed Analysis:

1. Constitutionality of Section 21 of the Travancore-Cochin General Sales Tax Act, 1125:
The primary question was whether Section 21 of the Travancore-Cochin General Sales Tax Act, 1125, is ultra vires of the Constitution. The court noted that this section corresponds to Section 16A of the Madras General Sales Tax Act, 1939, which had conflicting judgments from different benches of the Madras High Court. One bench held it to be ultra vires, while another upheld its validity. The court emphasized the importance of understanding the nature of the offences under the Act, which are primarily related to non-payment of assessed tax within the allowed time rather than the validity of the assessment itself. The court concluded that Section 21 does not violate Article 14 of the Constitution, as it does not deprive any person of the right to question the validity of the assessment through the proper channels provided within the Act.

2. Ultra Vires of the Provisions of the Code of Criminal Procedure, 1898:
The court examined whether Section 21 contravenes the provisions of the Code of Criminal Procedure, 1898. It was argued that the section prevents an accused from resorting to remedies available under the Criminal Procedure Code. However, the court clarified that the offences under the Sales Tax Act are confined to non-payment of assessed taxes and do not involve questioning the validity of the assessment during a criminal trial. Thus, there is no violation of the Criminal Procedure Code as the trial is limited to proving non-payment of the assessed tax within the stipulated time.

3. Ultra Vires of the Indian Evidence Act, 1872:
The contention that Section 21 is ultra vires of the Indian Evidence Act, 1872, was also considered. The argument was based on Section 105 of the Evidence Act, which places the burden of proof on the accused to prove circumstances that bring the case within any general or special exception. The court found no merit in this argument, stating that Section 21 does not contradict the provisions of the Evidence Act. The court reiterated that the trial under the Sales Tax Act focuses on the non-payment of assessed tax and not the validity of the assessment, thus not infringing upon the rights provided under the Evidence Act.

Conclusion:
The court concluded that Section 21 of the Travancore-Cochin General Sales Tax Act, 1125, is not ultra vires of the Constitution, the Code of Criminal Procedure, 1898, or the Indian Evidence Act, 1872. The reference was answered accordingly, upholding the validity of Section 21.