K. Paramasivam Pillai vs Board of Revenue and Others

Veeraswami, J.—It appears that, for the use and benefit of the gazetted and non-gazetted officers of the Tirunelveli Collectorate and by a

resolution of the Collectorate Recreation Club, a canteen called the ""Collectorate Canteen"" was opened sometime in November, 1955. In respect

of the transactions of tiffin etc., to the members of the canteen, the canteen, represented by its honorary secretaries, was assessed to sales tax

under the Madras General Sales Tax Act, 1939, for the years 1955-56 to 1957-58. For arrears of tax, steps were taken to realise the same from

the petitioner personally u/s 24(2)(b) of the Madras General Sales Tax Act, 1959. Aggrieved by these proceedings the petitioner, eventually,

moved the Board of Revenue unsuccessfully. He has, therefore, come up to this Court, asking to quash the Board''s order, which merely stated

that it saw no reason to interfere on behalf of the petitioner.

It seems to me that the validity of the assessment orders them selves is doubtful. The canteen does not even appear to be a firm of partnership

or registered body. Even in the case of the registered bodies like the Cosmopolitan Club, Young Men''s Indian Association or the canteen of the

Integral Coach Factory, it has been held by this Court that their transactions were not sales assessable to sales tax. The principle of those

decisions, with even better force, would be applicable to the assessment in the instant case. It is unnecessary to examine the validity of the

assessment further. It will suffice to say that the assessment orders were made against the canteen represented by its honorary secretaries, one of

whom happened to be the petitioner. The assessment was not made personally against him. It follows, therefore, that no proceedings could be

taken u/s 24(2)(b) of the Madras General Sales Tax Act, 1959, to collect the tax personally from the petitioner, since the liability was not personal

to him. The fact that creditors, like the provision shop, who supplied provisions to the petitioner were able to obtain a decree against the petitioner

personally does not help the department. The decree there is clearly based on the contract between the petitioner and the decree-holder. There is

no such basis to support the recovery proceedings against the petitioner personally, in respect of the sales tax arrears due from the canteen.

Though the rule asked for is one of certiorari, the proper direction should be to forbid the State from proceeding further to collect the arrears of

tax personally from the petitioner. There will be a rule to that effect. The petition is allowed, as one for prohibition.