1. Heard the learned counsel for the petitioner and the learned State Public Prosecutor for the respondent.
2. Since common questions of law and facts arise in these two petitions they were clubbed and heard together.
3. The petitioner, admittedly, is an assessee to sales tax. The Commercial Tax Officer, Haveri, has initiated proceedings against it (in Crl. Misc. Cases Nos. 7 and 6 of 1983 respectively) on the file of the Munsiff and J.M.F.C., Haveri, under section 13(3)(b) of the Karnataka Sales Tax Act, 1957 (the Act).
4. It is not in dispute that, prior to initiating these proceedings, the Sales Tax Officer had issued to the assessee and demand notice in the prescribed form - Form No. 6. The notice warned that 'if the assessee failed to pay the sales tax (assessed) the amount will be recovered as if it were arrears of land revenue and you will be liable to pay the same as provided under section 13 of the Sales Tax Act, 1957'. The main ground of attack to the initiation of these proceedings is that the Sales Tax Officer, who had, while calling upon the assessee to comply with the demand, having made it known to it that on its failure to pay the amount finally assessed, he would proceed to recover the same 'as if it were an arrear of land revenue' was precluded from taking recourse to the coercive steps in the Criminal Court.
5. In this connection the counsel places reliance on rule 20 of the Karnataka Sales Tax Rules, 1957 (the Rules), which read thus :
'20. Adjustment after final assessment. - After making the final assessment under sub-rule (2) or (3) of rule 18, the assessing authority shall examine whether any and if so, what amount is due from the dealer towards it after deducting any tax already paid in advance under clause (b) of sub-rule (1) of rule 18. If any amount is found to be due from the dealer, towards the final assessment, the assessing authority shall serve upon the dealer a notice in form 6 and the dealer shall pay the sum demanded within the time and in the manner specified in the notice. If the tax due on the final assessment is lower than the tax already paid it shall serve upon the dealer a notice in form 7 along with a refund payment order in form 24 or a refund adjustment order in form 25 or both, as the case may be. If the final assessment is exactly equal to the tax already paid the assessing authority shall inform the dealer what the final assessment is and that no further amount is due from him towards it :
Provided that the excess tax refundable to the dealer may be adjusted. Towards other amount, if any due by him under the Act.'
Section 38 enables the State Government to frame rules or to make rules Section 38(2)(k) enables the State Government to 'generally regulate the procedure to be followed and the forms to be adopted in proceedings under this Act'. Sub-section (4) of section 38 provides that 'all rules made under this Act, shall, subject to any modification made under section 39, have effect as if enacted in this Act.'.
6. Section 13 of the Act deals with the payment and recovery of tax. Relying of sub-section (1) of section 13, counsel for the petitioner argues that since the Rules are framed as to the mode of recovery of the tax assessed, the department had no option but to take recourse to the only mode prescribed by the Rules.
7. On the other hand, the State Public Prosecutor, drawing my attention to sub-section (1) of section 13, submitted that the department has a choice in the matter of recovery of the tax and that merely because the authority has mentioned in the notice that on the assessee's failure to comply with the demand that the same would be recovered as an arrear of land revenue it cannot be said that the department has no powers to take recourse to the other modes available in law for recovery of the same. According to him, neither form No. 6 nor rule 20 can take away the wide discretion that the department has under sub-section (3) of Section 13 of the Act.
section 13 of the Act reads thus :
'13. Payment and recovery of tax. - (1) The tax under this Act shall be paid in such manner and in such instalments, if any, and within such time as may be prescribed.
(2) If default is made in making payment in accordance with sub-section (1),
(i) the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax under this Act; and
(ii) the person or persons liable to pay the tax under this Act shall pay a penalty equal to -
(a) one per cent of the amount of tax remaining unpaid for each month for the first three months, after the expiry of the time prescribed under sub-section (1) and
(b) two and one-half per cent of such amount for each month subsequent to the first three months as aforesaid.
Explanation. - For purposes of clause (ii), the penalty payable for a part of a month shall be proportionately determined.
(2A) Notwithstanding anything contained in sub-section (2), the State Government may, subject to such conditions as may be prescribed, remit the whole or any part of the penalty payable in respect of any period by any person or class of persons.
(3) Any tax assessed, or any other amount due under this Act from a dealer or any other person may without prejudice to any other mode of collection be recovered -
(a) as if it were an arrear of land revenue, or
(aa) by attachment and sale or by sale without attachment of any property of such dealer or any other person by the assessing authority or the prescribed officer in accordance with such rules as may be prescribed,
(b) notwithstanding anything contained in the Code of Criminal Procedure, 1973 (Central Act 2 of 1974), on application to any Magistrate, by such Magistrate as if it were a fine imposed by him :
Provided that where a dealer or other person who has appealed or applied for revision of any order made under this Act and has complied with an order made by the appellate or the revising authority in regard to the payment of the tax or other amount, no proceedings for recovery under this sub-section shall be taken or continued until the disposal of such appeal or application for revision.
(4) The High Court may either suo motu or on an application by the Commissioner of or any person aggrieved by the order revise any order made by a Magistrate under clause (b) of sub-section (3).'
8. Form 6, in accordance with which a demand notice as contemplated under rule 20 of the Rules had been issued to the assessee, runs thus :
'FORM-6 (See rules 17-A, 20, 37 and 38) Year of assessment Registration Certificate No. To ............................ NOTICE Take notice that you have been finally assessed under the Karnataka Sales Tax Act, 1957, to a tax of Rs. ........ (Rupees) ........... (in words) only for the year ending ............... the period up to and inclusive of the date of discontinuance of business, and that after deducting the total amount of the payment already made by you towards the tax for the year, you have to pay a further sum of Rs. ........... (in words) only. This balance of tax shall be paid within twenty-one days from the date of service of this notice - By money order to the undersigned or By crossed cheque in favour of the undersigned or By remittance into the Government Treasury at or By crossed demand draft or Crossed postal order or
To the Commercial Tax Officer/Assistant Commercial Tax Officer or to the Bill collector,
failing which, the amount will be recovered as if it were an arrear of land revenue and you will be liable to penalty as provided in section 13 of the Karnataka Sales Tax Act, 1957.
Total tax payable Total tax paid Balance due Date of assessment Place ................ Signature of the assessing authority. Date ................. ----------------------------------------------------------------------- (Tear off slip) Registration/Certificate No. Year of assessment Date of assessment Date of service of demand notice ...........' -----------------------------------------------------------------------
9. There is no merit in the contention of the learned counsel for the petitioner that the authority, having made it known to the assessee that it would recover the amount due as if it was an arrear of land revenue, is bound to take recourse to that mode of recovery alone and not to any other mode available in law.
10. Sub-section (3) of section 13 of the Act mentions three modes of recovery. The amount due may be recovered either as an arrear of land revenue, or by attachment and sale or sale without attachment of any property belonging to the assessee in accordance with the prescribed rules or through the aid of the Magistrate as if it was a fine imposed by him. In fact, the law makes it clear that the choice is not confined to these three modes. And, this is clear from the words 'may without prejudice to any other mode of collection be recovered' used in the said sub-section (sub-section 3).
11. The assessee appears to be under a mistaken notion that the department had made election in the choice open to it and thus was precluded or estopped from taking recourse to other modes of recovery. The assessing authority is not tied down by any such estoppel by election.
12. While dealing with the question of election between two alternate courses of action this is what the learned author Spencer Bower in his book 'The Law Relating to Estoppel by Representation' (2nd Edition) observes at para 299 at page 296 :
'299. Election between two alternate courses of action : The rule governing this kind of election may thus be stated; Where A in his dealing with B, being at liberty to adopt either of two mutually exclusive steps, proceedings, course of action, or attitudes, in relation to B, elects to take or adopt one of them, and to reject the other, or to 'waive' his right in respect thereof, and A's declaration of such election or 'waiver' by words, conduct, or inaction, influences B to alter his position to his detriment, A is estopped, as against, B, from thereafter resorting to the course of action which he has thus intimated his intention of relinquishing, dispensing with, or 'waiving'. This rule has been applied to instruments, to relations, to transactions, and to proceedings in litigation, in the manner now to be described and illustrated.'
13. The available courses of action should be mutually exclusive; the intention should be to elect or choose one abandoning the other; and that by such a conduct the other person should have altered his position to his determent If these conditions are satisfied in a given case the principle of estoppel by election can be applied. None of the aforesaid conditions exist in the instant case.
14. The courses of action available to recover the amount are not mutually exclusive. One or the other, though not simultaneously, could be pursued till the amount is recovered. The authority may take recourse to a particular mode of execution upto a particular point and, before the amount is fully recovered abandon that course and take recourse to the other method. It cannot be said that by the assessing authority proceeding in that way the assessee, in any manner, has been prejudiced. The duty of the assessee is to satisfy the demand. It cannot be said that the assessee, in the instant case, after receiving the demand notice, as referred to above, had altered his position and thereby the action taken now works to his detriment. His liability, in no way, can be said to have been diminished or increased by the conduct of the assessing authority.
15. The question as to whether the assessing authority can take recourse to recover the amount assessed as if it was a fine only as a last resort on its failure to recover the same pursuant to other remedies available in sub-section (3) incidentally came up for consideration before a Division Bench of this Court in S.T.C. No. 52 of 1973 (D.D. 16th August, 1973). The State had preferred that revision against the order of the J.M.F.C., Yadgir, in case No. 53-4/72 on his file dismissing a petition preferred before him by the Sales Tax Officer under section 13(3)(b) of the Act. He had dismissed that petition on two grounds. Firstly, on the ground that the assessing authority had taken recourse to clause (b) without exhausting the other modes of recovery available in clauses (a) and (aa) of sub-section (3) of section 13 which it was bound to and, secondly, on the ground that no proper demand notice had been served on the assessee prior to the filing of the application in the Court. The learned Judges (G. K. Govinda Bhat, C.J., and M. K. Srinivasa Iyengar, J.) upheld the order of the Magistrate on the second ground and dismissed the revision. But, while not agreeing with the first ground referred to by the learned Magistrate in support of his order, the learned Judges observe as under :
'However, the learned Magistrate has also made certain observations in regard to the requirement of section 13 of the Act. He was of the opinion that until the complainant exhausts other remedies for the collection of tax he cannot file an application under section 13 to take coercive steps for recovery before the Court. This view is not correct.'
The aforesaid observations also indicate the wide choice open to the assessing authority in the matter of recovery of tax.
16. For the reasons aforesaid both these petitions are dismissed.