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SUPREME COURT OF INDIA
28th October, 1955.
S.R. DAS, ACTG. C.J.I., BOSE, JAGANNADHA DAS, IMAM AND CHANDRASEKHARA AIYAR, JJ.
State of Madras, Appellant
Versus
Gurviah Naidu and Co., Ltd., and others, Respondents.
Criminal Appeals Nos. 107 to 110 of 1954.
Advocates appeared
Mr. S. Ramaswami. Sr. Advocate (Dr. C. V. L. Narayan and Mr. P. G. Gokhale, Advocates, with him), for Appellant Mr. R. Ganapathy Iyer, Advocate, for Respondents.
Held: "That was a decision of a Bench of three Judges and not that of a Constitution Bench. There the appeal was by special leave granted by this court. The observation that there was no provision in the Constitution corresponding to section 417 of the Criminal Procedure Code was obviously made to emphasize that this court should not, in an appeal by special leave, interfere with an order of acquittal passed by the High Court merely for correcting errors of facts or law" (per S.R. Dos Actg. C.j.). - Article 286 (I)(b)-Madras General Sales Tax Act Exemption from Sales Tax under Article 286 (I)(b) on purchases of article for export-Scope.
Conviction under Section 15(b) of the Act-Acquittal by High Court on appeal-Jurisdiction of High Court to grant certificate of fitness for appeal against acquittal-Scope of Article 134(I)(c)Special leave to appeal.
The respondents were merchants dealing in the hides and skins in Salem. Their business consisted mainly in the purchase of hides and skins and exporting the same to foreign countries. They were assessed to Sales Tax under the Madras General Sales Tax Act, and on their failing to pay the tax assessed in full, complaints were laid against them under Section l5(b) of the Act. Before the Magistrate it was contended on behalf of the respondents that the purchases of skins sought to be taxed having taken place in the course of their export out of the territory of India, no Sales Tax could be levied thereon by reason of Art. 286(1 ) (b) of the Constitution and that as such, the assessments were illegal and, therefore, the non-payment of such illegal imposition was no offence at all. The prosecution contended that Art. 286 (1) (b) did not apply to the case, and that in any event, under Section 16 A of the Act the validity of the assessment could not be questioned in any criminal Court in any prosecution or other proceeding whether under the Act or otherwise. The respondents were convicted under Section 15(b) of the Act, on the ground that under Section 16-A of the Act it was not open to the respondents to question the validity of the assessment. The High Court, in/revision, reversed the order of the trial magistrate holding that Section 16-A of the Act was ultra vires of the Constitution and the provisions of the Criminal Procedure Code and the fundamental principles of criminal justice. It did not go into the question of the validity or otherwise of the assessments in the light of Article 286 (1) (b) of the Constitution. The State of Madras appealed against the order of acquittal with a certificate granted by the High Court under Article 134(1)(c) of the Constitution.
Held (accepting the appeal) : The evidence on record amounts only to this, namely, that after receiving orders for supply of skins to the London buyers the respondents used to go about purchasing the requisite kind and quantity of skins to implement such orders. Such purchases were no doubt for the purpose of export, but such purchases did not themselves occasion the export and consequently did not fall within the exemption of Article 286 (1) (b) of the Constitution Even if, therefore, it may be conceded without deciding it, that section 16-A did not prevent the respondents from questioning the validity of the assessment, it was quite impossible for the respondents on the evidence adduced by them, to contend that the assessments were illegal and that consequently the non• payment thereof was not an offence.
(2) Commenting on the jurisdiction of the High Court to grant certificates of fitness for appeal against acquittal, it was observed:
"Our attention was drawn by the learned advocate for the respondents to the decision of this Court in The State Government Madhya Pradesh v. Ramkrishna Ganapatrao Limsey2 and it was contended that these appeals are not maintainable as the High Court had no jurisdiction to grant certificates of fitness for appeal against acquittal under Art. 134 of the Constitution for there was no provision in the Constitution corresponding to section 417 of the Cr. P.C. which gave a right of appeal to the State against an order of acquittal passed by the High Court. That was a decision of a Bench of three judges and not that of a Constitution Bench. There, the appeal was by special leave granted by this court. The observation that there was no provision in the Constitution corresponding
1. State of Travancore-Cochin and others v. The Bombay Company Ltd., (1952) S.O.R. 11 12: A.I.R. 1952 SO. 366 and State of Travancore-Cochm v. Shanmugha Vilas Cashew Nut Factory and others (1954) S.O.R. 53: A.I.R. 1953 S.O. 333 applied.
2. A.I.R, 1954 S.O. 20.
to section 417 of the Cr. P.C. was obviously made to emphasise that this court should not, in an appeal by special leave, interfere with an order of acquittal passed by the High Court merely for correcting errors of facts or law. Without hearing further arguments on the scope of Article 134 (l)(c), we would prefer not to express any opinion as a Constitution Bench as to the validity of the certificates given by the 8igh Court in this case, for assuming, without deciding, that the certificates were wrongly given, we would in view of the clear majority decision of this court on Article 286 (1) (b) which is not questioned before us and the equally clear and convincing evidence on record in these cases, be willing, if it were necessary to regularise these appeals by giving special leave to appeal here and now." - Section 417-0bservation in State Government Madhya Pradesh v. Ramkrishna Ganpatrao Limsey (A.I.R. 1954 S. C. 20) that there is no provision in constitution corresponding to S. 417, Cr. P.C., explained,
Judgement
S. R. DAS, Actg. C. J.: This judgment will deposed of the four Criminal Appeals Nos. 107 to 110 of 1954.
2. These appeals have been filed by the State of Madras under certificates granted under Art. 134 (1) (c) of the Constitution by the High Court of Madras which, by its judgment in revision dated the 12th February 1954, reversed the order dated the 29th December 1952 passed by the Additional First Class Magistrate II, |Salem, and acquitted the accused.
3. The respondents are merchants dealing in hides and skins in Salem. Their business consists mainly in the purchase of hides and skins and exporting the same to foreign countries. The respondents were assessed to sales tax in different amounts on their respective turnovers of purchases of skins made by them in pursuance of orders placed with them by foreign buyers for the supply of the same .The respondents having failed to pay the entirety of the amounts of sales tax so assessed, complaints were laid against them under S. 15 (b) of the Madras General Sales Tax Act.
4. Before the Magistrate it was contended on behalf of the respondents that the purchases of skins sought to be taxed having taken place in the course of their export out of the territory of India, no sales tax could be levied thereon by reason of Art. 286 (1) (b) of the Constitution and that, as such, the assessments were illegal and therefore, the non-payment of such illegal impositions was no offence at all. The answer of the prosecution was that the purchases of skins for the purpose of implementing the orders of the foreign buyers were not purchases in the course of export within the meaning of Article 286 (1) (b) and that, in any event, under section 16-A of the Madras General Sales Tax Act the validity of the assessment could not be questioned in any criminal Court in any prosecution or other proceeding whether under the Act or otherwise.
5. After noting the contention of the prosecution that the purchases in question were not in the course of export within the meaning of Article 286(1) (b) but without deciding the same, the learned Magistrate went on to discuss the second contention of the prosecution, namely, that under section 16-A it was not open to the respondents to question the validity of the assessment. Relying on two decisions of the Madras High Court, the learned Magistrate upheld the contention of the prosecution on the second point.
The fact of assessment and non-payment of the assessed tax having been proved, the learned Magistrate convicted the respondents under section 15(b) of the Madras General Sales Tax Act and sentenced them to varying fines with provision for simple imprisonment for 15 days in default of payment and also directed that the amount of sales tax remaining due from the respective respondents should be recovered as if the same were a fine
6. Against their convictions, the respondents separately went up before the High Court in revision. The main controversy in the High Court centered round the validity or otherwise of section 16-A of the Madras General Sales Tax Act. After dealing at considerable length and in great detail with the respective contentions urged from different aspects, the High Court came to the conclusion that section 16-A of the Madras General Sales Tax Act was ultra vires the Constitution and the provisions of the Criminal Procedure Code and the fundamental principles of criminal justice.
The High Court did not go into the question of the validity or otherwise of the assessments in the light of Article 286 (1) (b) of the Constitution. The learned Judges pointed out that the Magistrate, who had heard the evidence, had not recorded any finding as to whether the transactions in respect of which the sales tax was assessed and demanded by the taxing authorities came within the scope of that article.
The High Court did not consider the respective contentions of the parties regarding the effect of Article 286 (1) (b)9 on the assessments but stated that in the ab
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