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TMI Blog1966 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment and a notice to show cause was issued to A-1 to A-3. It may be stated that A-1 lives in Bombay and A-2 and A-3 in Bezwada. The notice to A-1 was sent by registered post with acknowledgment due to a firm called "Independent India Motors", while the notices to A-2 and A-3 were sought to be personally served and on refusal by affixture. The person who served it, viz., one Veeraswamy has not been examined and, consequently, the Court has held that the service of notices on A-2 and A-3 to show cause why the assessment should not be reopened, has not been proved. The acknowledgment of the notice to A-1 sent by registered post was not signed by him nor has it been proved as to who signed it. Since there was no attempt made by the Sales Tax Authorities to establish that the notice was received by him and in view of the specific denial by A-1, A-2 and A-3, the Court held that the show cause notice was not received by any of the three accused. It was also held that the assessment order made on 30th March, 1961, on the escaped turnover of Rs. 56,810, imposing a tax of Rs. 2,662.97 nP. along with the demand notice, exhibit P-6, was also not served on these accused inasmuch as the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the other hand, submits that while the Full Bench decision is an authority for the proposition that the criminal courts cannot go behind the assessment orders, none the less, there were certain observations in that judgment as also in the judgment of their Lordships of the Supreme Court in Firm of Illuri Subbayya Chetty and Sons v. State of Andhra Pradesh[1963] 14 S.T.C. 680; A.I.R. 1964 S.C. 322. to the effect that where there is a fundamental defect in not complying with the provisions of the statute, the validity of the assessment order itself can be challenged. Chandra Reddy, C.J., delivering the judgment of the Full Bench has referred to the remarks of Rajamannar, C.J., in Syed Mohamed Co. v. State of Madras[1952] 3 S.T.C. 367; [1952] 2 M.LJ. 598. and observed that the learned Judges were also influenced by the fact that the determination of the amount of tax was made after notice to the assessee and it was open to appeal and even to revision, and that, in their opinion, that represents the correct law. The observations of Rajamannar, C.J., and Venkatarama Ayyar, J., relating to the objection that a criminal court can go behind the assessment order, which were approved, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout jurisdiction. Similarly, if an appropriate authority has acted in violation of the fundamental principles of judicial procedure, that may also tend to make the proceedings illegal and void and this infirmity may affect the validity of the order passed by the authority in question. It is cases of this character where the defect or the infirmity in the order goes to the root of the order and makes it in law invalid and void that these observations may perhaps be invoked in support of the plea that the civil court can exercise its jurisdiction notwithstanding a provision to the contrary contained in the relevant statute." In relation to the second of the cases of the Privy Council, their Lordships observed at page 326: "It is true that the judgment shows that the Privy Council took the view that even the constitutional validity of the taxing provision can be challenged by adopting the procedure prescribed by the Income-tax Act; and this assumption presumably proceeded on the basis that if an assessee wants to challenge the vires of the taxing provision on which an assessment is purported to be made against him, it would be open to him to raise that point before the taxing aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on arose under the following circumstances: There was an assessment upon a firm known as "Kohli Motors, Bezwada" for the year 1957-58 under the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as the Act). The said firm consisted of three partners, Mukha Singh Chanda, Gurubukh Singh Kohli and Preetam Singh Kohli, who are the three accused in C.C. No. 211 of 1962 on the file of the court of the Third Additional District Munsif-Magistrate, Vijayawada. The said firm was dissolved on 1st August, 1959. A notice of dissolution of partnership was given to the Sales Tax Authorities under the relevant rules. The deed of dissolution provided that all taxes due by the firm were to be paid by the first accused, Mukha Singh Chanda. Subsequent to the dissolution, it was found by the Deputy Commercial Tax Officer, Vijayawada-III, that certain turnover escaped assessment and a notice, exhibit P-3, was issued to the three accused under section 14 of the Act to appear in his office on 30th March, 1961, at 11 a.m. and file objections, if any, for the proposed assessment of the escaped turnover, which the dealers did not disclose in the turnover returned by them. It appears from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He further held that there was no satisfactory evidence to show that the assessment order and the notice of demand were refused by the second and third accused. The learned Judge, in his order referring the question to a Bench, appears to accept the finding of the Magistrate that the show cause notice, exhibit P-3, was not served on any of the accused. But at the same time, the learned Judge does not appear to agree with the reasoning of the Magistrate that the assessment order, exhibit P-5, and the notice of demand, exhibit P-6, were not actually served on the accused though the learned Judge did not give a definite finding on the point. But the learned judge referred the question formulated by him to a Bench on the basis that the show cause notice, exhibit P-3, was not served on the accused and on the assumption that the order of reassessment, exhibit P-5, and the notice of demand, exhibit P-6, were served on the first accused while the second and third accused refused to receive the same. The contention of the learned Public Prosecutor is that the order of reassessment (exhibit P-5) had become final under section 19 of the Act and that it is not open to the Magistrate to go behi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the omission to disclose the information, and make such inquiry as he considers necessary." It is clear from a plain reading of this sub-section that, before the assessing authority can reopen the assessment already made and reassess any alleged escaped turnover, he has to issue a notice to the dealer and make such enquiry as he considers necessary. Though the expression in this sub-section is "after issuing a notice to the dealer", in our view, it means "after notice is issued and served on the dealer". The purpose of issuing a notice under sub-section (4) of section 14 is to give an opportunity to the dealer to show cause why the assessment already made shall not be reopened and the escaped turnover shall not be assessed to tax. In the present case, the finding which has been accepted by the learned Judge, is that the notice under sub-section (4) of section 14 was not served on any of the three accused, who were the partners of the firm M/s. Kohli Motors. The first question is whether the tax ascertained as per the order, exhibit P-5, is the tax assessed on the accused under the Act. The contention on behalf of the accused was that the said assessment was wholly void inasmuch a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny suit, or other proceeding to set aside or modify, or question the validity of any assessment, order or decision made or passed by any officer or authority under this Act or any rules made thereunder, or in respect of any other matter falling within its or his scope." The argument of the learned Public Prosecutor is based upon this section, while in the Madras case referred to above, it was based upon the wording of section 16-A. Referring to the contention urged on behalf of the assessee questioning the validity of the assessment of the tax, the learned Judges in that case observed that there would have been substance in that objection if the assessee had been denied opportunity of contesting the claim before an order of assessment was made, though section 16-A provided that the validity of the assessment of any tax shall not be questioned in any criminal court in any prosecution or other proceeding. The observations of the Madras High Court in Syed Mohamed Co. v. State of Madras[1952] 3 S.T.C. 367; [1952] 2 M.L.J. 598. were referred to as laying down the law correctly in the decision of the Full Bench of this Court in Public Prosecutor v. Thimmaiah[1959] 10 S.T.C. 85; 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 14 to show cause why the original order of assessment shall not be reopened and the alleged escaped turnover shall not be assessed to tax, the order of reassessment (exhibit P-5) is void. Then the tax demanded as per exhibits P-5 and P-6 would not be the tax assessed under this Act within the meaning of section 30(1)(a) of the Act and the three accused cannot be held to have failed to pay within the time allowed the tax assessed on them under the Act. We will next refer to a few other decisions bearing on the question and cited before us. The decision in Secretary of State v. Mask Co.A.I.R. 1940 P.C. 105. arose under sections 182 and 188 of the Sea Customs Act. The Privy Council pointed out: "It is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well-settled that even if jurisdiction is so excluded, the civil courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said matter does not in itself exclude the jurisdiction of civil courts. The statute may specifically provide for ousting the jurisdiction of civil courts: even if there was no such specific exclusion, it creates a liability not existing before and gives a special and particular remedy for the aggrieved party, the remedy provided by it must be followed. The same principle would apply if the statute had provided for the particular forum in which the remedy could be had. Even in such cases, the civil court's jurisdiction is not completely ousted. A suit in a civil court will always lie to question the order of a tribunal created by a statute, even if its order is expressly or by necessary implication, made final if the said tribunal abuses its power or does not act under the Act but in violation of its provisions." The same principle was reaffirmed again by the Supreme Court in Venkataraman Co. v. State of Madras[1966] 17 S.T.C. 418; A.I.R. 1966 S.C. 1089. This case arose under section 18-A of the Madras General Sales Tax Act which provided: "No suit or other proceeding shall, except as expressly provided in this Act, be instituted in any court to set aside or modify any assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be posted for final disposal in the usual course in accordance with the answer given by us to the question. In pursuance of the abovesaid order of the Division Bench, the appeal came on for final hearing before JAGANMOHAN REDDY, C.J., and the following judgment was delivered on 26th August, 1966. The Public Prosecutor, for the appellant. N. Chandramouli, for respondent No. 1. N. Subba Reddy, for respondents Nos. 2 and 3. JUDGMENT The question referred by me to a Bench was "whether the nonservice of notice to show cause why an assessment already made should not be reopened, notwithstanding the fact that the ex parte reassessment order and the notice of demand have subsequently been served, would none the less affect the assessment order because of noncompliance with the fundamental provisions of the statute?" The respondents were a firm who were reassessed for escaped turnover, it was stated, without proper notice being served. The partners of the firm were also prosecuted. In the prosecution, the contention of the accused was that the reassessment is illegal inasmuch as no notice was served on them and non-service of notice absolves them of the liability to be reassessed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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