9911796707
TMI Blog1964 (12) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,945-63 nP. was payable by him to the State in respect of arrears of tax and penalty under the provisions of the Bombay Sales Tax Act, 1953. On the request of Hasmukhlal, the Sales Tax Recovery Mamlatdar, who was taking steps to recover the said amount from Hasmukhlal, granted instalments of Rs. 100 per month to Hasmukhlal and in consideration of this facility for payment by instalments being given to Hasmukhlal, the petitioner executed a surety bond stipulating that if Hasmukhlal committed default in payment of any three monthly instalments, the petitioner would pay to the State the full amount due and payable by Hasmukhlal and if the petitioner failed to do so, the State would be entitled to auction the house of the petitioner described ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was filed on behalf of the respondents. In the affidavit the respondents asserted their right to proceed to recover the amount due from the petitioner as if it were an arrear of land revenue and made it clear that they proposed to recover the said amount by adopting the coercive machinery provided in the Bombay Land Revenue Code, 1879. Before we proceed to deal with the question of law arising on the petition, we may point out that the petitioner also alleged in the petition that the surety bond was not binding on him by reason of non-fulfillment of certain conditions which according to him were agreed upon between the parties as conditions precedent to the attachment of liability under the surety bond, but these allegations were disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount from the debtor. But, he said, such provision was to be found in section 38(5) of the Bombay Sales Tax Act, 1959, or at any rate in the third clause of section 187 of the Bombay Land Revenue Code, 1879. Let us examine these provisions. Section 38, as the marginal note indicates, deals with the subject of payment of tax by the dealer. Sub-section (1) provides that the tax shall be paid in the manner provided in the Act and at such intervals as may be prescribed by the Rules. Sub-sections (2) and (3) provide for payment by the registered dealer of the amount of tax due according to the returns filed by him from time to time and subsection (4) declares inter alia that the amount of tax due where returns have been furnished without fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer or commission agent who has given certificate under section 11 and acted contrary to such certificate, or (3) a person contravening the provisions of section 46 or 48(1). So far as penalty is concerned, sub-section (5) therefore applies only to recovery of penalty due from an assessee-dealer or other person liable to pay the same under section 36 or 37. Subsection (5) has obviously no application where what is sought to be recovered is not tax due from an assessee-dealer or penalty due from an assessee-dealer or other person on whom it is levied under section 36 or 37 but an amount due from a surety under a surety bond executed in order to secure payment of the amount of tax or penalty by the assessee-dealer or other person liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the Government to be leviable as an arrear of land revenue shall be levied under the foregoing provisions of Chapter XI of the Bombay Land Revenue Code, 1879. The argument was that the contract between the petitioner and the State embodied in the surety bond declared the amount due from the petitioner under the surety bond leviable as an arrear of land revenue and the State was therefore by virtue of the third clause of section 187 entitled to recover that amount from the petitioner by adopting the coercive machinery set out in Chapter XI of the Bombay Land Revenue Code, 1879. But when we turn to the surety bond we find that there is no provision in the surety bond which declares that the amount due from the petitioner shall be leviable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 187 cannot therefore be invoked by the Revenue in support of its claim to recover the amount due from the petitioner by following the coercive process set out in the Bombay Land Revenue Code. 1879. These were the only provisions of law on which reliance was placed on behalf of the Revenue and since, in our opinion, for reasons which we have stated above, they do not support the claim of the Revenue and there is no other provision of law authorising the State to recover the amount due from the petitioner under the surety bond as if it were an arrear of land revenue, the State cannot proceed to recover that amount by following the coercive machinery of the Bombay Land Revenue Code, 1879, and must be left to follow the ordinary remedy of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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