In Re: Kandaswami Goundan and Another

Ramaswami, J.—These are two connected revisions preferred against the orders made by the learned Additional First Class Magistrate of

Salem in C. C. Nos. 663 and 664 of 1957 on his file.

The petitioners have been charged for contravention of Section 15(2) (a) of the Madras General Sales Tax Act in that they, dealers in coir and

ropes, have wilfully submitted an incomplete and incorrect (and therefore an untrue) return in Form A for the years 1947-48 and 1948-49. The

accused denied the offence, when questioned u/s 342 of the Criminal Procedure Code. They raised four preliminary objections, viz., (1) that it is

not alleged, in conformity with Clause (c) of Section 15 as it stands at present, that the accused had fraudulently evaded the payment of the tax or

the compounding fee ; (2) that there is already a compounding order u/s 16 of the Act and that this bars a prosecution for the same offence ; (3)

that Rule 13 of the Madras General Sales Tax (Turnover and Assessment) Rules should be held to be not validly brought into force following a

recent Full Bench decision of the Andhra High Court reported in notes of recent cases as (1957) 2 Andhra Law Journal (Batchu Sreeramulu

Chetty v. State of Andhra Pradesh [1958] 9 S.T.C. 215 ; and (4) that Section 15 of the Act in its present form is not a mere amendment but a

substitution for the old one made by the Madras General Sales Tax (Third Amendment) Act, 1956, and consequently the old Section 15 stands

repealed, that the Amendment Act which came into force on 8th October, 1956, is not retrospective. Section 15, it was contended, is a

procedural section and the observation of Pollock, C. B., in Wright v. Hale (1860)30 L.J. Ex. 40 , cited In Re: Parthasarathi Naidu and Another, ,

are relied on in support of the contention that the prosecutions in these cases cannot be legally sustained.

The learned Magistrate considered these objections and found them to be devoid of merits and decided to proceed with the inquiry. Hence

these revisions by the accused persons.

There is no substance or relevancy in the first contention, because the prosecution in this case is not under Sub-section (c) of Section 15 but is

under Sub-section (a), not for any evasion, fraudulent or otherwise, of any payment of tax or fee, but for submitting a return on the basis of which

the tax is normally sought to be assessed and which returns were found to be untrue and to have been wilfully submitted in that matter : For

definition of ""wilful"" see Kausalai Ammal v. Sankaramuthiah Pillai (1941) 53 L.W. 744, In re Govindarajulu, 64 L.W. 275, Maruthia

Subrahmanyam Vs. Nivarthi Lakshmi Narayanamma, , In re Swaminatha Iyer, 55 L.W. 758, In re Subbarama Iyer [1951] 2 S.T.C. 71; see the

analytical discussion on wilful submission of an untrue return at page 216 and foll, of N. R. Raghavachariar, ""Sales Tax in Madras"" (Law Weekly

Publication); and also page 163 of V. Sundara Vyas, ""The Madras General Sales Tax Companion"" ; and Sethuraman, ""The Law of Sales Tax in

India"", pages 94-95, ""wilful submission of untrue return''''.

The second contention that the levy of a compounding fee is a bar to the filing of a case would have some substance if the offer to compound the

offence has been accepted by the party and the transaction has been completed by him by payment of the stipulated amount. It is not so in this

case. The prosecutions themselves have been launched on account of the failure of the assessees to pay the compounding fee fixed by the

department.

In regard to the third objection, the learned Magistrate has rightly pointed out that it is true that the rule has been held to be not valid by the

Andhra High Court in the Full Bench decision referred to above. But this does not mean that the learned Magistrate should make a reference

because for making any such reference it must first be shown that the prosecution is or is also under the said Rule 13. In the instant case the

prosecution does not purport to the under that rule the facts alleged will not also bring it within purview. The learned Magistrate has rightly pointed

out the distinction to be borne in mind, viz., that Rule 13 prescribes the time, date, on or before which a dealer should submit a return in Form A-3

and also the procedure to be followed in assessing the tax on the basis of that return. Section 15(a) of the Act relates to submission as such of an

untrue return. Clause (2) of Rule 13 has no reference to the offence complained of. Therefore, there is no merit in the application for reference on

the pretext that this case pending before the Magistrate involves the question of validity of Rule 13 and the determination of that question is

necessary for the disposal of the case. In short, the learned Magistrate is first of all asked to raise a ghost and to lay it down.

The first part of the last objection is equally devoid of substance. The objection is that the offence alleged relates to a period before the

substitution of the new Section 15 in the place of the old one. The argument is that old Section 15 has been repealed, the new Section 15 is not

retrospective and therefore there can be no valid prosecution. But this point is concluded by authority. In a recent decision of the Kerala High

Court, State v. Krishnan (1957) M.L.J. 795. the learned Judges did not agree with a similar contention that the repeal of old Section 15 and the

substitution thereof by a new section is to be retrospective. They observed that there is nothing in the Amending Act XV of 1956 or in the new

Section 15 that manifests an intention incompatible with the previous operation of the old section. Therefore, the learned Magistrate did not rightly

uphold this contention.

The second part of the last objection was that Section 15 is a procedural one and therefore the repeal thereof, that is, Section 15 as it stood,

must be deemed to be retrospective. But as pointed out by the learned Magistrate Section 15(2) (a) for the contravention of which the accused

have been prosecuted defines an offence in the same way as offences are defined in the Indian Penal Code. There is nothing relating to procedure

in it. We have to look for corresponding procedure, if any, in the rules made under the Act. Section 15 (2) (a) is a substantive provision and not

merely adjectival.

In the result, the learned Magistrate having rightly overruled these objections, there are no grounds for interference in revision. These revisions

are dismissed.