1. The petitioner in Criminal Revision Petition No. 164 is the proprietor of a Coffee Club and Catering Establishment at Horakote who has been assessed to a tax of Rs. 156 on the turnover of his business estimated at Rs. 10,000 a year. The levy is stated to be provisional and a demand notice was served on him on 26th March, 1949. He failed to pay the assessment though the time prescribed for payment had expired. The petitioner in Criminal Revision Petition No. 165 is a Soda Manufacturer and Bakery Merchant at Horakote. He was also provisionally assessed to a tax of Rs. 156 for the year 1948-49 on the turnover of his business. A demand notice was served upon him and he failed to pay the tax within the time allowed. Both of them were prosecuted under Section 20(b) of the Mysore Sales Tax Act. In both the cases, the receipt of the notice is admitted and the plea raised is 'not guilty'. They have challenged the validity of the tax. A preliminary objection was raised by the prosecution that the Court is precluded from considering the validity of the tax which was overruled holding that the accused is perfectly at liberty to question or challenge the assessment or any other action taken by the authorities under the Act. On merits, the learned Magistrate held that the levy of the tax is justified and disallowed the objection and that the rules were not ultra vires of the rule-making power of the Government and the rules relating to the provisional assessment were well within the ambit authorised. The accused in both the cases were convicted and sentenced to pay a fine of Rs. 25 with a direction that the tax assessed shall be recovered as if it were a fine.
2. The petitioner in Criminal Revision Petition No. 290 is a merchant dealing with groundnuts at Davanagere who was also prosecuted for non-payment of the tax levied and convicted to pay a fine of Rs. 150 in addition to the tax levied. His plea, while not disputing the facts of the case, is that he was not liable to pay the tax assessed as the assessment order is itself illegal and ultra vires and outside the provisions of the Mysore Sales Tax Act. The Magistrate in the latter case came to the finding that a criminal Court cannot assume jurisdiction to question the legality or propriety of the order of assessment passed by the assessing authority.
3. The common question that is canvassed in all these cases is whether a criminal Court is or is not precluded from examining the validity of the assessment. It is argued for the assessees that they are not liable to pay the tax by reason of the fact that the turnover does not exceed Rs. 10,000 per year and the Assessing Officer has to prove their liability without which the tax levied is invalid and illegal. The assessee in the cases under consideration comes under the definition of a 'dealer' meaning any person who carries on business of buying and selling. Sections 5 to 9 of the Mysore Sales Tax Act provide for the grant of licences of exemption from taxation. Sections 10 and 11 deal with registration of dealers and collection of tax. The procedure to be followed by the Assessing Authority is prescribed in Section 12 under which every dealer is required to submit a return and the Assessing Authority shall assess the tax if he is satisfied that the return is correct and complete; if the return is not submitted or, if it appears to the Assessing Authority that the return submitted is incorrect and incomplete the Assessing Authority shall assess the dealer to the best of his judgment, after giving a reasonable opportunity to the assessee to prove the correctness and completeness of the return submitted by him. Section 14 of the Act provides for filing an appeal objecting to an assessment. Section 15 constitutes the Government as the Revising Authority. After appeal and revision, the dealer or the Assessing Authority may, by application in writing, require the Appellate or the Revisional Authority to refer to the High Court any question of law arising out of such order and if the Appellate or the Revising Authority refuses to make such reference, the applicant may apply to the High Court with in thirty days of such refusal order under Section 16 of the Act. It is thus seen that in the words of Lord Uthwatt in Raleigh Investment Co. Ltd. v. Governor-General in Council ( 15 I.T.R. 332; A.I.R. 1947 P.C. 78.), 'Effective and appropriate machinery is therefore provided by the Act itself for the review on grounds of law of any assessment'.
4. Section 20 deals with offences and penalties and the relevant portion of the section applied to these cases is clause (b) which reads with the section thus :-
'Any person who fails to pay within the time allowed, any tax assessed on him, or any fee due from him, under this Act shall on conviction by a Magistrate of the First Class be liable to a fine .... and the tax, fee or amount so specified shall be recovered as if it were a fine'.
5. Under Section 22 of the Act, the assessments fixed by the Assessing Authority are precluded from being questioned in civil Courts. Section 25 of the Act enables the Government to make rules to carry out the purposes of the Act and the rules made by the Government prescribe a detailed procedure to be followed in the levy of tax. Rule 30 empowers the Assessing Authority to fix provisionally the tax on the basis of a return, with the correctness of which if the Assessing Officer is satisfied; if he is not so satisfied, the officer may, after such enquiry, determine the turnover of the dealer to the best of his judgment and fix provisionally the annual tax payable. After the provisional assessment, the assessee is given an opportunity to file a return when the provisional assessment will be finalised.
6. It is not disputed that in all these cases, the Assessing Officer has complied with the provisions of the Act and the rules thereunder. The prosecution has thus made out a prima facie case regarding the levy of tax. It was open to the assessees to prove before the Assessing Authority that the turnover upon which the tax is levied was incorrect. The assessees have defaulted in not having taken steps in that direction. If the assessees felt aggrieved by the order of the Assessing Officer they might have questioned the decision of the Assessing Officer on facts or on law involved, by either an appeal under Section 14 or revision under Section 15. In the absence of any such appeal or revision within the time prescribed, the decision of the Assessing Authority becomes final and the tax becomes payable. On failure to comply with the demand notice, it is open to the authorities under Section 13 to enforce the payment as if it were an arrear of land revenue. The assessee also incurs the penalty under Section 20 and the payment of tax would be enforced by an application to the concerned Magistrate. It is thus seen that a statutory obligation to pay arises by virtue of levy of the assessment under the provisions of the Act itself. The remedy for the enforcement of payment in a criminal Court is of a summary nature and if it is proved to the satisfaction of the Court that the assessee has become liable under the Act for payment, it is not the province of a criminal Court to enter into an elaborate enquiry about the correctness of the levy or the validity thereof.
7. It is argued that Section 22 of the Act, which runs thus :-
'Save as provided in Section 16, no assessment made and no order passed under this Act or the rules made thereunder by any assessing authority shall be called in question in any civil Court and save as is provided in Sections 14 and 15, no appeal or application for revision shall lie against any such assessment or order', only precludes a civil Court from calling in question the assessment made and the assessee is free to raise the question in a criminal Court. As observed by Lord Uthwatt in the case referred to above at p. 81 :- 'Jurisdiction to question the assessment otherwise than by use of the machinery expressly provided for by the Act would appear to be inconsistent with the statutory obligation to pay arising by virtue of the assessment.'
8. I have held earlier on 6th December, 1950, in Criminal Revision Petition No. 230 of 1950-51, Thimmina Katte Kotrappa v. Assistant Sales Tax Officer ( 2 S.T.C. 35.), that :-
'Section 22 prohibits the civil Courts from questioning by appeal or application by way of revision the assessment made or an order passed by the Assessing Authority. If the provisions contained in the Act or the rules made thereunder, and the method and manner in which the orders are made are precluded from the cognizance by the civil Courts which evidently constitute proper forum to test the legality or otherwise of the orders a fortiori it follows that in the prosecutions which are merely meant to penalise the default and enforce the payment of the tax assessed, the validity of the tax assessed cannot be questioned.'
9. Relying upon a decision of the Madras High Court in In re Appa Rao ( 1 S.T.C. 211.), it was contended that under Section 15(b) of the Madras General Sales Tax Act which is similar to Section 20(b) of the Mysore Act the High Court came to the conclusion that :
'...... before that question can be decided, it is fully open to the accused to prove that the tax was not lawfully due and that no offence was, therefore, committed.'
10. The expression 'due' used in Section 15(b) which penalises for failure to pay the tax due is interpreted to mean 'lawfully due'. But the expression in our Act is 'tax assessed'. It cannot be said that the expressions 'tax due' and 'tax assessed' cannot the same meaning. As there is fundamental difference between those expressions the decision under Madras General Sales Tax Act is inapplicable. The Madras Legislature amended the Act by adding Section 16(a) which bars the criminal Courts from entering into the legality or otherwise of the assessment. Even after the amendment the ruling is applied to the assessment for the period prior to the date of amendment. It is represented at the Bar that the Mysore Legislature has recently adopted an amendment of Section 22 by omitting the expression 'civil' in Section 22 of the Mysore Act, which in effect precludes any Court, civil or criminal, from entering into the validity of the taxation. On the grounds of the Madras decision, I am asked to apply similar interpretation since the tax under consideration relates to a period earlier to the amendment. The amendment in Mysore is introduced to remove possible doubts that may be entertained in construing the provisions of the Act. Even without the amendment, this Court had come to the conclusion that criminal Courts have no jurisdiction to question the validity of the tax. The prosecution has proved the liability of the assessees on facts in the first two cases and on law in the last mentioned case. I am, therefore, of opinion that the conviction in all the three cases should be upheld. Regarding the sentence, the amount of fine levied in Criminal Revision Petitions Nos. 164 and 165 is Rs. 25 each, which is by no means heavy; but the levy of Rs. 150 in Criminal Revision Petition No. 290 appears to be rather severe, and I, therefore, reduce it to Rs. 50.
11. In the result, with the modification of sentence in Criminal Revision Petition No. 290, all the petitions fail and are dismissed.
12. Petitions dismissed.