1. These are connected petitions. In these petitions, the petitioner is challenging the validity of the proceedings instituted against him before the City Magistrate of Bangalore by the second respondent under section 13(3)(b) of the Mysore Sales Tax Act, 1957. It is contended on behalf of the respondents that the petitioner is a transferee of the business formerly run by one H. Nagappa and therefore, he is liable to pay the arrears of tax due from Nagappa. The petitioner denies his liability to pay the tax in question. When he resisted the applications, the learned Magistrate refused to entertain his objections on the ground that no such objection could be taken before him in view of section 32 of the Mysore Sales Tax Act, 1957. The question for our decision is whether section 32 is applicable to the facts of the present case.
2. It is admitted that the petitioner was not assessed to tax though his alleged transferor was assessed to tax. It is also admitted that before proceeding against the petitioner, no opportunity had been given to him by the Sales Tax Authorities for establishing that he (petitioner) was not liable to pay the amount claimed. It is asserted on behalf of the Department that the petitioner is the transferee of Nagappa's business. But this assertion has not yet been examined. The petitioner had no opportunity to put forward his case. It was contended on behalf of the Department that the assertion of the second respondent that the petitioner is the transferee of Nagappa's business is not open to scrutiny by the Magistrate in view of section 32.
3. Section 32 of the Act says :- 'The validity of the assessment of any tax or of the levy of any fee or other amount, made under this Act, or the liability of any person to pay any tax, fee or other amounts so assessed or levied shall not be questioned in any Criminal Court in any prosecution or other proceedings whether under this Act or otherwise.'
4. Was there any assessment of tax or levy of any fee or other amount in this case Admittedly, there has not been any assessment of tax on the petitioner. Further, it is not the case of the Revenue that any fee or other amount has been levied on the petitioner. The learned Government Pleader contended that the word 'levy' is a word of wide import and its dictionary meaning includes collection as well. In fiscal enactments the word 'levy' is generally used in a restricted sense. Ordinarily the expression 'levy' in a fiscal statute connotes that an imposition has been made on the party who is called upon to pay the amount in question. Under the Mysore Sales Tax Act, 1957, three different types of liabilities are created, (1) liability to pay the tax assessed or levied, e.g., under sections 12 and 12-A; (2) liability to pay the fee or other amount levied, e.g., under sections 16 and 17; and (3) the liability to pay the amount due, e.g., under sections 14 and 15.
5. The reason behind the ban contained in section 32 is that before steps are taken in Criminal Courts, the appropriate authorities and Tribunals would have determined, after hearing the interested parties, the tax or fee to be levied and, therefore, there is nothing to reagitate the question of the validity of the assessment of tax or levy of any fee or other amount or the liability of any person to pay any tax, fee or other amount so assessed or levied. But section 32 unlike section 13 does not refer to 'any other amount due'. The liability of the persons mentioned in sections 14 and 15 can be appropriately described either as amount due from them or as the amount they are liable to pay. They are neither assessed to tax nor any tax, fee or other amount can be said to have been levied on them. There is no provision in the Sales Tax Act, 1957, to determine any controversy that may arise between the assessing authorities and the persons who are liable either under section 14 or under section 15. That is evidently the reason why section 32 does not refer to 'amount due', but it speaks of tax assessed, and fine or other amount levied. If that is not the true position, section 32 may become an instrument of oppression; that provision can be used for making illegal exacting. In order to interpret section 32 in the manner that the learned counsel for the Department wants us to interpret, we have to assume that the legislature had no regard for the principles of natural justice. Such an assumption is opposed to our constitutional theories, our basic principles of jurisprudence, and our notions of justice. The interpretation contended for by the learned counsel for the Department is abhorrent to our sense of justice. Therefore, unless compelled by the language of the provision we will not be justified in accepting that interpretation. The language of section 32 as seen earlier does not include the case of persons from whom 'money is due'. That we think, as it ought to be. In the instant case, as seen earlier the petitioner disputes his liability to pay the amount demanded. Therefore the learned Magistrate ought not to use his coercive power to realise the amount claimed, unless he is satisfied that the amount claimed is due.
6. The leaned counsel for the Department offered to have the petitioner's objections examined by the Commercial Tax Officer, and that in the presence of the petitioner. But such an enquiry would be outside the scope of the Mysore Sales Tax Act, 1957, and the petitioner will not have any right of appeal against the order of the Commercial Tax Officer. But, on the other hand, if the Magistrate is required to go into the question of the liability of the petitioner, the conclusion reached by the Magistrate may be open to scrutiny by this Court under its revisional powers.
7. For the reasons mentioned above, the orders of the leaned Magistrate which are impugned in these proceedings are quashed and the learned Magistrate is directed to enquire into the question whether the petitioner is liable to pay the amount claimed from him before taking steps to realise that amount from the petitioner. If he is satisfied that the amount claimed is due from the petitioner, then only he will act under section 13(3)(b).
8. The petitioner has deposited certain amounts during the pendency of these petitions as directed by this Court. The Magistrate will refund those amounts to the petitioner.
9. Petitions allowed.