1955 (7) TMI 17 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of service of notices under rule 28 of the Madras General Sales Tax Rules.
2. Interpretation of rule 28(a) regarding service on the assessee's manager or agent.
3. Consideration of whether a clerk can be considered as the manager or agent of the assessee for service of notices.
4. Impact of improper service on the prosecution under section 15(b) of the Act.

Detailed Analysis:
The case involves an appeal by the Public Prosecutor on behalf of the State of Madras against the acquittal of the accused in a sales tax matter. The accused was convicted for failing to pay sales tax under final and provisional assessments. The High Court of Mysore heard the appeal transferred from the Chief Justice of Madras. The trial Magistrate convicted the accused, who then appealed to the Sessions Court, raising contentions regarding the validity of service of notices and the ultra vires of the assessment. The appellate Court acquitted the accused based on improper service of notices and rejected the ultra vires contention as it was not raised earlier.

Regarding the service of notices, the prosecution claimed that the notices were served to the accused's clerk, Maranna. The evidence showed that the peon served the notices to Maranna, who acknowledged receipt. However, the crucial question was whether this service fulfilled the requirements of rule 28 of the Madras General Sales Tax Rules. Rule 28 allows service on the assessee, manager, or agent, but there was no evidence that the assessee was not found, making rule 28(b) inapplicable. The clerk, Maranna, needed to be established as the manager or agent, which was not proven.

The Court analyzed that treating every employee as the manager or agent could lead to adverse consequences, especially in tax matters. Since there was no evidence to support Maranna's authority beyond his clerical duties, the service to him could not be considered proper under rule 28. The appellant argued that this contention was not raised timely, but the Court found it valid based on the prosecution's own evidence.

Furthermore, the appellant claimed that the accused accepted the service by appealing the assessment order, but the Court found no evidence of such acceptance. As proper service was not established, the prosecution under section 15(b) of the Act failed. Therefore, the decision of the Sessions Judge to acquit the accused was upheld, and the appeal by the State of Madras was dismissed.