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HIGH COURT OF ANDHRA PRADESH
K.SUBBA RAO,RANGANADHAM CHETTY, JJ.
M/s. Macherlappa and Sons
Versus
Government of Andhra (Now Andhra Pradesh)
Tax Revn. Cases Nos. 65 and 66 of 1955
Decided On : 07-11-1957
SALES TAX - Assessment - Acquittal of assessee in criminal prosecution for failure to furnish return - Effect on assessment proceedings - Judgment of Criminal Court not binding on Tribunal - Tribunal justified in confirming assessment order - Revision petitions dismissed.
Fact of the Case:
The assessee, a dealer in bamboos and timber, was prosecuted for failure to furnish a return under the Sales Tax Act. The assessee was acquitted by the Criminal Court. The assessee argued that the acquittal barred the department and the Tribunal from making or confirming an assessment. The Tribunal rejected the plea and confirmed the assessment order.
Finding of the Court:
The judgment of a Criminal Court is not binding on a Tribunal in assessment proceedings under the Sales Tax Act. The Tribunal was justified in confirming the assessment order.
Issues: Whether the acquittal of the assessee in a criminal prosecution for failure to furnish a return bars the department and the Tribunal from making or confirming an assessment.
Ratio Decidendi: The judgment of a Criminal Court is not admissible in evidence and not binding on Civil Courts. The procedure of Quasi-Judicial Tribunals, to which the provisions of the Evidence Act do not in terms apply, should conform to cardinal Rules of Evidence if injustice should be obviated. The principle of estoppel by election is well known. No one can be allowed to take up inconsistent position, to affirm and disaffirm or approbate and reprobate. But there is nothing in the conduct of the department in resorting to a criminal Court which would preclude an independent investigation for an assessment of tax. Neither the Sales Tax Act nor the Rules provide for an election between the two courses. It is not as if the Sales Tax Officer is under an obligation to choose one of the two alternatives a criminal prosecution and the making of an assessment. Both courses are open concurrently to the department. The principle of res judicata embodied in S. 11, C. P. C. can have no application as the field of its operations is limited to civil actions; nor can the department be precluded from proceeding with the assessment on the ground of acquiescence in the Magistrates finding and decision.
Final Decision: The revision petitions are dismissed with costs.
RANGANADHAM CHETTY, J. :-
On 22-11-1956 the High Court called from the Sales Tax Appellate Tribunal findings on the following points:
1. Whether, as a matter of fact, the petitioner placed before the Tribunal, the judgment of the Criminal Court and argued on the basis of it?
2. Whether the finding of the District Magistrate in C. C. No. 73 of 1955 is binding on the Tribunal, and if so, what is the effect of that finding on the assessment?
The Tribunal has submitted that no certified copy of the judgment of the Criminal Court was filed before them, that only a private copy of the judgment was sent by post with a covering memo praying for interim stay until the disposal of the appeal and that not even a petition was filed to admit the judgment in evidence at the hearing of the appeal. In the circumstances, says the Tribunal, it cannot be said that the judgment was formally brought to their notice or that arguments were addressed regarding the effect of the judgment on the assessment proceedings.
2. It is contended before us, on behalf of the assessee, that even at the hearing of the appeal arguments were addressed to the Tribunal. Evidently the Tribunal declined to consider the point in the absence of a certified copy of the judgment and a petition for admitting it in evidence.
3. We feel that the Tribunal could have asked the State representative present about the judgment. In all likelihood, he would have admitted it obviating the need for a certified copy; Rules of procedure are intended primarily for advancing ends of justice.
4. A copy of the Judgment of the Criminal Court has been filed before us and we proceed to consider point No. 2.
5. The main question resolves itself into two :
(a) Is the finding of the Criminal Court binding on the Tribunal?
(b) If so, what is its effect on the assessment proceedings?
6. Point (a) : The facts may be recounted briefly. The Assessees are dealers in bamboos and timber at Tadipatri. They were carrying on business for a number of years without submitting returns under the Sales Tax Act, in view of their turnover not reaching the limit of Rs. 10,000/- at any time. On 11-12-1954, the Deputy Commercial Tax Officer paid a surprise visit to the business premises and found large stocks of bamboos and timber. He seized two bill books, two bound note books, one pocket size note book, four purchase bills and a letter-head paper containing some entries in pencil under dated 14-3-1952. He worked out the figures of turnover and proposed assessing the dealers on a total of Rs. 12,452/6/1 for 1952-53, and Rs. 10,353-9-6 for 1953-54. The dealers objected saying that the entries were mere scribblings of an insane member of the family and did not represent the transactions of the business. The plea was rejected and the assessment made on the figures proposed by the Officer on 30-1-1955. The Assessees appealed to the Commercial Tax Officer, who confirmed the aforesaid order of the Deputy Commercial Tax Officer on 5-3-1955.
7. The Deputy Commercial Tax Officer then launched a prosecution against the assessees for an offence of failure to furnish the return due under Rule 11 (1) of the Madras General Sales Tax Act Rules punishable under Sec. 15 (a) of the Act. The Criminal case ended in an acquittal. The District Magistrate held that the Prosecution had failed to prove the guilt of the accused beyond reasonable doubt. In his judgment the learned Magistrate adverted to the contention of the Accused that Exs. P-3 to P-5 did not belong to them at all and that Exs. P-1 and P-2, which were not disowned by the accused, did not yield data for a turnover exceeding Rs. 10,000/-. The finding of the learned Magistrate are expressed thus :
Exs. P-4 and P-5 do not bear the name of the accused. Exs. P-3 and P-4 bore the printed letter head of K. Chennayya and Coffee Works. Car Street.
Tadipatri...........There is no proof that Exs. P-3 to P-5 contain transactions relating to the Accused On the other hand the printed letter hea
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