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The Public Prosecutor (A.P.) Vs. Mukha Singh Chanda and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberCriminal Appeal No. 427 of 1964
Judge
Reported in[1967]19STC426(AP)
AppellantThe Public Prosecutor (A.P.)
RespondentMukha Singh Chanda and ors.
Appellant AdvocateThe Additional Public Prosecutor
Respondent AdvocateN. Chandramouli, Adv. for respondent No. 1 and ; N. Subba Reddy, Adv. for respondent Nos. 2 and 3
DispositionAppeal dismissed
Excerpt:
- all india services act, 1951. sections 32(c) (as amended by section 3 of amendment act, 2005] & 10 & general clauses act, 1897, section 6: [g.s. singhvi, cj, dr.g. yethirajulu, ramesh ranganathan, g.bhavani prasad, c.v. nagarjuna reddy, jj] exemption of building from applicability of provisions of act held, (per majority) section 32(c) of the act provides that the provisions of the act shall not apply to any building the rent of which as on the date of the commencement of the a.p. buildings ( lease, rent and eviction) control (amendment) act 2005 exceeds rs.3,500/- per month in the areas covered by the municipal corporations in the state and rs.2,000/- per month in other areas. there is nothing in the provisions of the amendment act which either expressly or by necessary implication.....order1. the question which arises in this appeal is whether the non-service 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 non-compliance with the fundamental provisions of the statute ?2. the facts in this case are these: there was an assessment upon a firm known as 'kohli motors, bezwada' for the year 1957-58 under the sales tax act. the said firm consisted of three partners, a-1, a-2 and a-3, which firm was dissolved on 1st august, 1959, and it is not denied that the notice of dissolution was given to the sales tax authorities under the relevant rules. under the deed of.....
Judgment:
ORDER

1. The question which arises in this appeal is whether the non-service 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 non-compliance with the fundamental provisions of the statute ?

2. The facts in this case are these: There was an assessment upon a firm known as 'Kohli Motors, Bezwada' for the year 1957-58 under the Sales Tax Act. The said firm consisted of three partners, A-1, A-2 and A-3, which firm was dissolved on 1st August, 1959, and it is not denied that the notice of dissolution was given to the Sales Tax Authorities under the relevant rules. Under the deed of dissolution, it appears that all taxes are to be paid by the first accused. Subsequent to the dissolution, it was found that certain turnover escaped assessment 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 service has not been satisfactorily established. In so far as the first accused is concerned, the assessment order and the notice were sent by registered post but this time without acknowledgment due. A-1 has denied having received them. In so far as A-2 and A-3 are concerned, the refusal by them has been sought to be established by the evidence of P.W. 2. The Magistrate, however, thought that the scribe of the endorsement of refusal which was signed by P.W. 2 has not been examined. Further, the statement of P.W. 2 that the affixture by him was witnessed by the watchman was not sought to be corroborated by the examination of the watchman. For these reasons, he held that there was no satisfactory evidence to show that the assessment order and the notice of demand were refused by A-2 and A-3 and that the same was got affixed.

3. Sri Chinnappa Reddy, the learned Public Prosecutor contends that the Magistrate was not justified in rejecting P.W. 2's evidence merely because one David has not been examined or that the watchman has not been examined. There is, in my view, force in this contention, because P.W. 2's evidence shows that the notices were refused by A-2 and A-3 and that thereafter he affixed the same. A-3 has examined himself as D.W. 1 and he denied that he received the notice or that he refused the same. He was also cross-examined. Mr. Subba Reddy says that it is an oath of P.W. 2 against an oath of D.W. 3 and consequently the Magistrate was right in rejecting the evidence of P.W. 2. I can understand the Magistrate considering the evidence of both P.W. 2 and D.W. 1 and preferring the evidence of D.W. 1 to that of P.W. 2. But, that he has not done. Instead, he has merely on an assumed defect on the part of the prosecution in not examining the scribe of the endorsement or the watchman rejected his evidence as if the evidence of process-server has to be corroborated.

4. On the assumption that these notices were served, the further question as posited by me in the beginning of this judgment would arise. In support of that Mr. Chinnappa Reddy, the learned Public Prosecutor contends that it is not open to a criminal court to go behind the assessment order which has become final, and relies on a Full Bench decision of this Court in Public Prosecutor v. Bhavigadda Thimmaiah and Ors. A.L.T. 10 at p. 23. The learned Advocate, Mr. Subba Reddy, 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 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) 2 M.L.J. 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, are as follows :

There would have been substance in this objection, if the petitioners had been denied an opportunity of contesting the claim before an order of assessment was made. But where, as here, the tax is determined after notice to the assessee, it is not repugnant to the rules of natural justice to provide that the validity of assessment shall not be questioned at the stage of realisation of the tax. The provision is analogous to the rule which precludes judgment-debtors from putting forward at the stage of execution of a decree defences that were open to them in the suit itself.

5. In Firm Illuri Subbayya Chetty & Sons v. State of Andhra Pradesh A.I.R. 1964 S.C. 322 in an appeal from the judgment of a Full Bench of this Court, the question was whether the bar of Section 18-A of the Madras General Sales Tax Act would oust a civil court from entertaining a suit. In dealing with that question Gajendragadkar, J. (as he then was) referred to the two decisions of the Privy Council, viz., Secretary of State v. Mask and Company (1940) 67 I.A. 222 at 236 and Raleigh Investment Co. Ltd. v. Governor-General in Council (1947) 74 I.A. 50. In the former case Lord Thankerton observed :-

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.

6. In respect of this passage it was observed by the Supreme Court that these observations, though made in somewhat wide terms do not justify the assumption that if a decision has been made by a taxing authority under the provisions of the relevant taxing statute, its validity can be challenged by a suit on the ground that it is incorrect on the merits and as such, it can be claimed that the provisions of the said statute have not been complied with.

7. In so far as the non-compliance with the fundamental provisions of the statute was concerned, it was observed at page 326 :-

Non-compliance with the provisions of the statute to which reference is made by the Privy Council must, We think, be non-compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without 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.

8. 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 authority and take it for a decision before the High Court under Section 66(1) of the Act. It is not necessary for us to consider whether this assumption is well-founded or not. But the presence of the alternative machinery by way of appeals which a particular statute provides to a party aggrieved by the assessment order on the merits, is a relevant consideration and that consideration is satisfied by the Act with which we are concerned in the present appeal.

9. Mr. Subba Reddy contends that inasmuch as in that case the merits of the assessment were challenged in the suit also, that question does not arise in this case, where the very foundation of the jurisdiction to pass the ex parte order is questioned.

10. Having regard to these observations and since the question is likely to arise in other cases as well, I think this is a fit case for consideration by a Bench. I accordingly refer to a Bench the question formulated in the beginning of this judgment, viz., 'whether the non-service 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 non-compliance with the fundamental provisions of the statute?

11. In pursuance of the abovesaid order of reference the appeal came on for hearing before the Division Bench consisting of BASI REDDY and CHANDRASEKHARA SASTRY, JJ., and the following order was made by the Court on 20th August, 1966.

Order of the Division Bench

Chandrasekhara Sastry, J.

12. This criminal appeal was heard by Jaganmohan Reddy, J. (as he then was), who by his order dated 17th March, 1965, referred to a Bench the following question :

Whether the non-service 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 non-compliance with the fundamental provisions of the statute?

13. Pursuant to that order, the case was posted before us and argued by the learned counsel. The question for decision 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 record that the first accused lives in Bombay and the second and third accused in Bezwada. The notice issued to the first accused was sent by registered post with acknowledgment due to a firm called 'Independent India Motors' while the notices to the second and third accused were sought to be personally served and on refusal by affixture. As anyone of the three partners did not appear to show cause why they should not be reassessed with respect to the escaped turnover, the said escaped turnover was assessed to sales tax by assessment order dated 30th March, 1961 (exhibit P-5). Thus it was an ex parte order of assessment. A notice of demand (exhibit P-6) dated 30th March, 1961, was issued to the three accused. The amount of tax payable as per the notice of demand was Rs. 2,662.97 nP. on the escaped turnover of Rs. 56,810. Since the tax was not paid, the Deputy Commercial Tax Officer, Vijayawada-III, filed a complaint before the Third Additional District Munsif-Magistrate, Vijayawada, seeking to prosecute the three accused under Section 30(1)(a) of the Act alleging that the firm, M/s. Kohli Motors, Vijayawada, of which the three accused were partners failed to pay the tax in spite of the issue of demand notice to them. The accused pleaded that they are not guilty. In substance, the case for the accused was that neither exhibit P-3, the notice under Section 14(4) of the Act to show cause why assessment shall not be reopened and the escaped turnover assessed to sales tax nor the order of reassessment (exhibit P-5) nor exhibit P-6, the demand notice, was served on any of them and that, therefore, it cannot be said that they failed to pay the tax assessed under the Act and that they are not guilty under Section 30(1 )(a) of the Act. Section 30 of the Act provides for offences and penalties. The relevant part of the said section is as follows :-

30. (1) Any person who-

(a) fails to pay within the time allowed, any tax assessed on him or any penalty levied, or any fee due from him, under this Act; or

* * * *(c) wilfully acts in contravention of the provisions of this Act or the rules made thereunder, shall, on conviction, be liable to be punished with fine which may extend to two thousand rupees.

14. The Magistrate held that there was no satisfactory evidence to show that the notice, exhibit P-3, under Section 14(4) of the Act was served on any of the accused. 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 behind that order and to decide that there was no valid order of assessment and that the accused cannot be held guilty, under Section 30(1)(a) of the Act, of the offence of failure to pay the tax assessed on them under the Act and acquit them under Section 245(1) of the Criminal Procedure Code as there was no proper service of notice or order.

15. We have to decide this question on the basis that exhibit P-3 was not served on the accused though the order of assessment and the notice of demand were served on them.

16. It is contended by the learned counsel for the. accused that the Deputy Commercial Tax Officer will have jurisdiction to reopen the assessment already made on the ground that certain turnover has escaped assessment under Section 14(4) of the Act only after issuing notice to the dealer and after making such enquiry as he considers necessary and as, in this case, the said notice was not served on the three accused, who were the partners of the assessee-firm and no enquiry was made, the order of reassessment (exhibit P-5) is void and the accused cannot be said to have failed to pay the tax assessed on them 'under this Act' within the meaning of Section 30(1)(a).

17. Sub-section (4) of Section 14 reads :

Where, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax, or has been underassessed or assessed at too low a rate, or where the licence fee or registration fee has escaped levy or has been levied at too low a rate, the assessing authority may, at any time within a period of four years from the expiry of the year to which the tax or the licence fee or registration fee relates, assess the tax payable on the turnover which has escaped assessment or levy the correct amount of licence fee or registration fee, after issuing a notice to the dealer and after making such inquiry as he considers necessary. Such authority may also direct the dealer to pay in addition to the tax so assessed, a penalty not exceeding one and half times the amount of that tax, if the turnover had escaped assessment or had been under-assessed or assessed at too low a rate by reason of its not being disclosed by the dealer :

Provided that before issuing any direction for the payment of any penalty under Sub-section (2), Sub-section (3) or Sub-section (4) the assessing authority shall give the dealer a reasonable opportunity to explain the omission to disclose the information, and make such inquiry as he considers necessary.

18. 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.

19. 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 as the notice under Sub-section (4) of Section 14 was not served on them.

20. In Syed Mohamed & Co. v. State of Madras (1952) 2 M.L.J. 598 a Bench of the Madras High Court consisting of Rajamannar, C.J., and Venkatarama Ayyar, J., had to consider whether Section 16-A of the Madras General Sales Tax Act (Act 9 of 1939) was opposed to natural justice and was ultra vires of the powers of the Madras Legislature. The said section was as follows :

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 amount so assessed or levied shall not be questioned in any criminal court in any prosecution or other proceeding, whether under this Act or otherwise.

21. Venkatarama Ayyar, J., who delivered the judgment of the Court, observed at page 600 of the report:

The contention is that the section prevents the petitioners from showing that they are not liable to be taxed under the Act and is, therefore, opposed to rules of natural justice. There would have been substance in this objection, if the petitioners had been denied an opportunity of contesting the claim before an order of assessment was made. But where, as here, the tax is determined after notice to the assessees, it is not repugnant to rules of natural justice to provide that the validity of assessment shall not be questioned at the stage of realisation of the tax. The provision is analogous to the rule which precludes judgment-debtors from putting forward at the stage of execution of a decree defences that were open to them in the suit itself.

22. The learned Judge next referred to the following passage in Rottschaefer's work on Constitutional Law at page 686 :

The general rule is that due process requires that the taxpayer be accorded an opportunity to be heard at some stage in the proceedings before his liability is irrevocably fixed with respect to all matters the ascertainment of which involves the exercise of such administrative or quasi judicial functions, so far as those matters affect the existence or extent of his liability.

23. The section in the Andhra Pradesh General Sales Tax Act, 1957, corresponding to Section 16-A of the Madras General Sales Tax Act, 1939, is Section 36, which is as follows :-

Save as otherwise expressly provided in this Act, no Court shall entertain any 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.

24. 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.

25. The observations of the Madras High Court in Syed Mohamed & Co. v. State of Madras (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 A.L.T. 10. The question that arose for decision in that case was whether in a prosecution under Section 15(b) of the Madras General Sales Tax Act, the criminal court has jurisdiction to adjudicate upon the correctness of the amount of tax assessed under the Act. The said Section 15(b) reads :

Any person who...

(b) 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 Presidency Magistrate or a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees and in the case of a conviction under Clause (b)...the Magistrate shall specify in the order the tax, fee or other amount which the person convicted has failed or evaded to pay or has wrongfully collected, and the tax, fee or amount so specified shall be recoverable as if it were a fine.

26. The Full Bench held that when a statute creates an obligation to pay a tax and also provides remedies to the assessee, the aggrieved party must resort to those remedies and cannot resort to another jurisdiction to question the assessment and that when once the impost has been finally determined as laid down in the Act, it is not competent for any tribunal or Court to reopen that question in any proceeding. While pointing out that any mode of questioning the assessment otherwise than by the use of the machinery set up in the Act appears to be inconsistent with the intention of the Legislature, the Full Bench referred to the decision in Syed Mohamed & Co. v. The State of Madras [1952] 3 S.T.C. 367 and the observations therein (which we have already referred to above) and noticed, that the learned Judges in the Madras case were also influenced by the thought 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. Next it was held: 'In our opinion, this represents the correct law.' It follows that a Full Bench of this High Court approved the proposition that the validity of an assessment could be questioned if the assessee had been denied an opportunity of contesting the claim before an order of assessment was made. This decision of the Full Bench of this Court is binding on us and following it, we have to hold that, in the present case, since the accused had no notice under Sub-section (4) 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.

27. 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.

28. In Subbayya Chetty & Sons v. State of Andhra Pradesh (1963) 2 A.L.T. 206 the Supreme Court, after referring to the statement of law in Secretary of State v. Mask & Co. A.I.R. 1940 P.C. 105 referred to above, observed :

It is necessary to add that these observations, though made in somewhat wide terms, do not justify the assumption that if a decision has been made by a taxing authority under the provisions of the relevant taxing statute, its validity can be. challenged by a suit on the ground that it is incorrect on the merits and as such, it can be claimed that the provisions of the said statute have not been complied with. Non-compliance with the provisions of the statute to which reference is made by the Privy Council must, we think, be non-compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without 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 what cases such a plea would succeed it is unnecessary for us to decide in the present appeal because we have no doubt that the contention of the appellant that on the merits, the decision of the assessing authority was wrong, cannot be the subject-matter of a suit because Section 18-A clearly bars such a claim in the civil courts.

29. Again in Firm Radha Kishan v. Ludkiana Municipality A.I.R. 1963 S.C. 1547 the law is summarised thus :

Under Section 9 of the Code of Civil Procedure the court shall have jurisdiction to try all suits of civil nature excepting suits of which cognizance is either expressly or impliedly barred. A statute, therefore, expressly or by necessary implication, can bar the jurisdiction of civil courts in respect of a particular matter. The mere conferment of special jurisdiction on a tribunal in respect of the 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.

30. The same principle was reaffirmed again by the Supreme Court in Venkataraman & Co. v. State of Madras 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 assessment made under this Act.

31. The question was whether a suit for refund of sales tax assessed under the provisions of the said Act, which was declared to be ultra vires by the Supreme Court itself in another case was maintainable. By a majority, the Supreme Court held that such a suit for refund of the tax was maintainable. It was pointed out:

The Sales Tax Authorities had acted outside the Act and not under it in making an assessment on the basis of the relevant part of the charging section which was declared to be ultra vires by the Supreme Court. It cannot be said that the expression 'under this Act' in Section 18-A refers only to the power of the officer to make an assessment and the procedure to be adopted by him and not to the content of the assessment.

32. It was further pointed out that the expression 'under this Act' refers both to procedural and substantive provisions of the Act and that, as the relevant part of the charging section was held to be ultra vires, Section 18-A was not a bar to the maintainability of the suit for the refund of sales tax assessed under the provision declared to be ultra vires the powers of the State Legislature.

33. From the above decisions it is clear that even in cases where a statute specifically excludes the jurisdiction of the civil courts, the civil courts will have jurisdiction to examine 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.

34. In the present case, the finding of the Magistrate, which was accepted by the learned Judge, was that the notice under Section 14(4) was not served on any of the three accused before the order of reassessment was made. This is clearly opposed to Sub-section (4) of Section 14 of the Act. The order of reassessment is, therefore, void and its validity can be questioned on that ground by the accused when they are prosecuted under Section 30(1)(a) of the Act.

35. Our answer to the question referred to us, therefore, is that the non-service 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 non-compliance with the fundamental provisions of the statute.

36. The case will be posted for final disposal in the usual course in accordance with the answer given by us to the question.

37. 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.


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