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Sri Venkateswara Rice Mill Vs. the Special Commercial Tax Officer (Evasions) and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petition No. 634 of 1966
Judge
Reported in[1970]26STC208(AP)
AppellantSri Venkateswara Rice Mill
RespondentThe Special Commercial Tax Officer (Evasions) and ors.
Appellant AdvocateR. Baskara Rao, Adv.
Respondent AdvocateP. Venkatarami Reddy, Adv. for ;Principal Government Pleader
Excerpt:
.....force of the amended provision. - 3,000 as if there is an evasion of tax under section 32 of the andhra pradesh general sales tax act (hereinafter called the act) and for failure to maintain correct and complete accounts required under section 25 of the act; and that he could have proceeded against the petitioner only under clause (b) of sub-section (1) of section 32 of the act and that in this case the special commercial tax officer has not only acted under clause (b) of sub-section (1) of section 32 but also purported to act under clause (a) without realising the fact that there was neither failure to pay, nor evasion of, any tax recoverable under the act. the prescribed authority is empowered to accept by way of composition under clause (a) of sub-section (1) of section 32 where the..........his jurisdiction in collecting rs. 3,000 as if there is an evasion of tax under section 32 of the andhra pradesh general sales tax act (hereinafter called the act) and for failure to maintain correct and complete accounts required under section 25 of the act; and that he could have proceeded against the petitioner only under clause (b) of sub-section (1) of section 32 of the act and that in this case the special commercial tax officer has not only acted under clause (b) of sub-section (1) of section 32 but also purported to act under clause (a) without realising the fact that there was neither failure to pay, nor evasion of, any tax recoverable under the act. 3. it would appear that the special commercial tax officer inspected the premises of the petitioner's mill and conducted.....
Judgment:

Obul Reddi, J.

1. The petitioner in this writ petition has prayed for quashing the order of the Special Commercial Tax Officer (Evasions), Guntur, in O. R. 13/65-66 dated 4th December, 1966 and for refund of a Rs. 4,000 collected by the said officer from the petitioner-firm.

2. Mr. Bhaskara Rao appearing for the petitioner contended that the Special Commercial Tax Officer acted in excess of his jurisdiction in collecting Rs. 3,000 as if there is an evasion of tax Under Section 32 of the Andhra Pradesh General Sales Tax Act (hereinafter called the Act) and for failure to maintain correct and complete accounts required Under Section 25 of the Act; and that he could have proceeded against the petitioner only under Clause (b) of Sub-section (1) of Section 32 of the Act and that in this case the Special Commercial Tax Officer has not only acted under Clause (b) of Sub-section (1) of Section 32 but also purported to act under Clause (a) without realising the fact that there was neither failure to pay, nor evasion of, any tax recoverable under the Act.

3. It would appear that the Special Commercial Tax Officer inspected the premises of the petitioner's mill and conducted verification of the stocks and found from the stock verification that the accounts maintained by the petitioner's firm were incorrect. He then issued a notice calling upon the petitioner to show cause why action should not be taken against him by launching a prosecution Under Section 31 for contravention of the provisions of Section 25 of the Act. The Special Commercial Tax Officer also mentioned in the notice to show cause why the stocks verified by him should not be confiscated. On receipt of the notice, it is the case of the petitioner that they were forced into compounding the offence by making them pay Rs. 1,000 as compounding fee and Rs. 3,000 purporting to be the tax payable by them. Thereupon the Special Commercial Tax Officer made an order which may be usefully extracted :-

The millers have suppressed the purchase of paddy of 185 bags.

Thus it is proved that they have wilfully acted in contravention of the provisions of the Act in order to fraudulently evade payment of tax by failing to maintain correct and complete accounts as required under the provisions of Section 25 of the Andhra Pradesh General Sales Tax Act, 1957.

Thus they have committed an offence Under Section 30 of the Andhra Pradesh General Sales Tax Act, 1957, for which they are liable for prosecution Under Section 31 of the Andhra Pradesh General Sales Tax Act, 1957. On a notice being issued to the millers to show cause as to why prosecution proceedings should not be launched Under Section 31 of the Act, they have expressed in writing admitting the offence and offered to get the offence compounded in a sum of Rs. 1,000 (paid in Ch. No. 177 D/6-12-1965). I find them guilty and by accepting the offer of Rs. 1,000 as compounding fees and Rs. 3,000 as tax, I hereby compound the offence Under Section 32 of the Andhra Pradesh General Sales Tax Act, 1957.

4. Section 32 of the Act, it is necessary to point out, does not empower the Special Commercial Tax Officer to collect tax as has been done in this case. Section 32 is in two parts and provides for composition of offences. The prescribed authority is empowered to accept by way of composition under Clause (a) of Sub-section (1) of Section 32 where the offence consists of the failure to pay, or the evasion of, any tax recoverable under the Act, in addition to the tax so recoverable, a sum of money not exceeding Rs. 1,000 or double the amount of tax recoverable whichever is greater. The notice served upon the petitioner does not show that the offence committed by him consisted either of failure to pay tax or evasion of any tax recoverable under the provisions of the Act. It is only in either of these events composition of offence is permissible under Clause (a) of Sub-section (1) of Section 32. All other cases not covered by Clause (a) come within the ambit of Clause (b) which says that the prescribed authority may by way of composition accept a sum of money not exceeding Rs. 1,000. The instant case is one falling within the scope of Clause (b), for the offence committed by the petitioner is one falling Under Section 25 of the Act, that is, not maintaining true and correct accounts. It, therefore, follows that the Special Commercial Tax Officer had no jurisdiction either under Clause (a) or Clause (b) to collect Rs. 3,000 in addition to the compounding fee of Rs. 1.000 levied for contravention of the provisions of Section 25 of the Act. The order of the Special Commercial Tax Officer, therefore, in so far as it relates to the collection of Rs. 3,000, is made in excess of the jurisdiction conferred upon him and to that extent the impugned order is liable to be quashed.

5. In the result since the Special Commercial Tax Officer acted within the limits of his jurisdiction in collecting a sum of Rs. 1,000 by way of composition for the offence committed by the petitioner, the impugned order to that extent is held valid. As regards the collection of Rs. 3,000 as already held by us, it is done without jurisdiction, as that amount could not have been collected invoking Clause (a) of Sub-section (1) of Section 32 of the Act. Therefore, the order to the extent it relates to the collection of Rs. 3,000, as if it were a tax, is quashed and the Special Commercial Tax Officer is directed to refund that amount to the petitioner. This petition is allowed in part to the extent indicated above, but in the circumstances we make no order as to costs. Advocate's fee Rs. 200.


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