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K.N. Krishnaswamy Vs. Commercial Tax Officer, Chikmagalur and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKarnataka High Court
Decided On
Case NumberW.P. No. 1999 of 1965
Judge
Reported in(1967)1MysLJ646; [1967]20STC239(Kar)
ActsMysore Sales Tax Act - Sections 27, 27(1), 27(2) and 31; Constitution of India - Article 14
AppellantK.N. Krishnaswamy
RespondentCommercial Tax Officer, Chikmagalur and anr.
Appellant AdvocateK. Srinivasan, Adv.
Respondent AdvocateG.V. Shantha Raju for the High Court Special Government Pleader
Excerpt:
.....the tax or amount recoverable, whichever is greater, and (b) in other cases, a sum of money not exceeding one thousand rupees. it is undoubted that the contravention of sub-section (1) may also consist in a failure to issue a bill where a bill should be issued. it may well be regarded as an incidental provision in aid of the main purpose of the act, viz......is a registered dealer under the mysore sales tax act was found to have omitted to issue bills or cash memorandum as required by sub-section (1) of section 27 of the act when the inspector of the department visited his shop at a shandy at chikkamagalur on 25th august, 1965. after issuing a notice to him and hearing him, the commercial tax officer, chikkamagalur, levied on him a composition fee of rs. 500. the petitioner impugns the levy as illegal and invalid. 2. it appears from the records that the levy was more or less a matter of discussion and consent between the petitioner and the commercial tax officer. it is also clear that the action taken by the officer is relatable to section 31 of the act. 3. if that much can be clearly gathered from the record, we fail to see what grievance.....
Judgment:
ORDER

Narayana Pai, J.

1. The petitioner who is a registered dealer under the Mysore Sales Tax Act was found to have omitted to issue bills or cash memorandum as required by sub-section (1) of section 27 of the Act when the Inspector of the department visited his shop at a Shandy at Chikkamagalur on 25th August, 1965. After issuing a notice to him and hearing him, the Commercial Tax Officer, Chikkamagalur, levied on him a composition fee of Rs. 500. The petitioner impugns the levy as illegal and invalid.

2. It appears from the records that the levy was more or less a matter of discussion and consent between the petitioner and the Commercial Tax Officer. It is also clear that the action taken by the officer is relatable to section 31 of the Act.

3. If that much can be clearly gathered from the record, we fail to see what grievance the petitioner can make in respect of the levy.

4. He has, however, raised a technical point to the effect that this was a case in which no punishment was possible under sub-section (2) of section 27 and that, therefore, the composition under section 31 was equally impossible.

5. Now sections 27 and 31 read as follows :

'27. Certain dealers to issue bill or cash memorandum. - (1) Every dealer whose turnover exceeds Rs. 20,000 in any year shall, in respect of all goods sold by him, issue a bill or a cash memorandum to the purchaser, signed and dated by him or his servant, manager, or agent showing such particulars as may be prescribe and shall keep the counterfoil or duplicate of such bill or cash memorandum duly signed and dated and preserve it for a period of not less than five years from such date.

(2) Any person who contravenes the provisions of sub-section (1) shall, on conviction, be punishable with a fine equal to double the amount of the bill or the cash memorandum in respect of which such contravention has occurred or fifty rupees whichever is less.'

'31. Composition of offences. - The prescribe authority may accept from any person who has committed or is reasonably suspected of having committed an offence punishable under this Act, by way of composition of such offence - (a) where the offence consists of the failure to pay or the evasion of, any tax or other amount recoverable under this Act in addition to the tax or amount so recoverable, a sum of money not exceeding one thousand rupees of double the amount of the tax or amount recoverable, whichever is greater, and (b) in other cases, a sum of money not exceeding one thousand rupees.'

The argument is composition under section 31 is possible only in respect of an offence punishable under the Act, that is to say, an offence in respect of which a punishment by way of imprisonment or fine is capable of being imposed. Looking at sub-section (2) it would appear, according to the argument, that the proper fine to be imposed in a given case has necessarily to be calculated on the basis of the amount of the bill or cash memorandum in respect of which a contravention of the provisions of sub-section (1) had taken place and that, therefore, if no bill at all has been issued, there is no way of computing the fine to be imposed.

6. It appears to us that it is unnecessary to import such difficulty into the interpretation of the section. It is undoubted that the contravention of sub-section (1) may also consist in a failure to issue a bill where a bill should be issued. Hence the amount of the bill which is the basis for calculation of the fine under sub-section (2) could reasonably be regarded as the amount which should or could have been properly entered in the bill if issued. In fact, the principal or the major offence sought to be punished is the total omission to issue a bill. Hence it is necessary to interpret the section in such a way as to give effect to its principal objective and not adopt an interpretation leading to its being totally ineffective or inoperative and therefore unable to achieve the purpose, unless it is absolutely impossible to do so. There is no such impossibility in this case. It is possible, as we have pointed out, to give a reasonable meaning to the language of the section capable of giving full effect to its purpose.

7. Another point though not already sit out in the affidavit in support of the petition was that section 27 is likely to result in unconstitutional discrimination violative of Article 14 of the Constitution. The only basis for this argument is that whereas the maximum turnover exempt from taxation is fixed at Rs. 7,500, the obligation to issue bills is not placed by statute on persons whose turnover is less than Rs. 20,000 but limited to those whose turnover exceeds Rs. 20,000. By itself this circumstance cannot be said to result in discrimination which is necessarily unconstitutional. The only way it is said to do so is by postulating that the only objective of section 27 is prevention of evasion of tax and by suggesting that evasion is possible not merely by persons whose turnover exceeds Rs. 20,000 but also by those with lesser turnover. But it is not necessary to regard this section as subserving the only purpose of preventing evasion. It may well be regarded as an incidental provision in aid of the main purpose of the Act, viz., computation of tax liability. If so, the Legislature cannot be said to have contravened Article 14 by taking into account that the necessity for issuing bills is greater and more desirable in the case of persons with a larger turnover than in the case of persons with a smaller turnover.

8. The writ petition therefore fails and is dismissed with costs. Advocate's fee Rs. 100.

9. Petition dismissed.


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