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1995 Supreme(Del) 478
High Court Of Delhi
HARMIT SINGH GHAI - Appellant
Versus
ANAND S.KHULLAR DEPUTY COMMISSIONER (RECOVERY)SALES TAX - Respondent
CRIMINAL APPEAL 134 of 1992
Decided On : 07/06/1995
ARUN JAITLEY, BALRAM SANGAL, G.L.RAVAL, J.S.PANNU, KULJIT RAVAL, P.K.AGRAWAL, S.K.DHOLAKIA, S.K.VADIA
The detention of a defaulter under Section 138 of the Delhi Land Reforms Act, 1954, is illegal if the procedure prescribed by Rule 119 of the Delhi Land Reforms Rules, 1954, is not followed.
Headnote:
SALES TAX - RECOVERY OF ARREARS - DETENTION OF DEFAULTERS - PERIOD OF DETENTION - SECTION 138 OF THE DELHI LAND REFORMS ACT, 1954 - INTERPRETATION - PROCEDURE FOR DETENTION - RULE 119 OF THE DELHI LAND REFORMS RULES, 1954 - COMPLIANCE - NATURAL JUSTICE - OPPORTUNITY OF HEARING - SATISFACTION OF THE DETAINING AUTHORITY - MATERIAL ON RECORD - JURISDICTION OF THE COLLECTOR OF SALES TAX TO ISSUE WARRANTS OF ARREST AND DETENTION - NOTIFICATION CONFERRING POWERS - TIMING - FABRICATION OF DOCUMENTS - ALLEGATION - JURISDICTION OF THE COURT - QUASHING OF WARRANTS OF DETENTION - COSTS.
Fact of the Case:
The petitioners, who were registered dealers under the Delhi Sales Tax Act and the Central Sales Tax Act, were detained in civil prison for a period exceeding 15 days for non-payment of sales tax arrears. The detention was ordered under Section 138 of the Delhi Land Reforms Act, 1954, which provides for the arrest and detention of a defaulter for a period not exceeding 15 days. The petitioners challenged the detention orders on various grounds, including the contention that the Collector of Sales Tax had no jurisdiction to issue warrants of arrest and detention, and that the procedure prescribed by Rule 119 of the Delhi Land Reforms Rules, 1954, had not been followed.
Finding of the Court:
The Court held that the Collector of Sales Tax had the jurisdiction to issue warrants of arrest and detention under Section 138 of the Delhi Land Reforms Act, 1954, but that the detention orders were illegal because the procedure prescribed by Rule 119 of the Delhi Land Reforms Rules, 1954, had not been followed. The Court also held that the detention orders were in excess of jurisdiction because they were for a period exceeding 15 days. The Court further held that the Collector of Sales Tax had failed to record his reasons to believe that the defaulters had the means to pay but were wilfully withholding payment, and that there was no material on record to support such a belief. The Court also held that the Collector of Sales Tax had failed to give the defaulters an opportunity of being heard before issuing the warrants of arrest and detention orders, which was a violation of the principles of natural justice.
Issues: 1. Whether the Collector of Sales Tax had the jurisdiction to issue warrants of arrest and detention under Section 138 of the Delhi Land Reforms Act, 1954? 2. Whether the detention orders were illegal because the procedure prescribed by Rule 119 of the Delhi Land Reforms Rules, 1954, had not been followed? 3. Whether the detention orders were in excess of jurisdiction because they were for a period exceeding 15 days? 4. Whether the Collector of Sales Tax had failed to record his reasons to believe that the defaulters had the means to pay but were wilfully withholding payment? 5. Whether there was any material on record to support such a belief? 6. Whether the Collector of Sales Tax had failed to give the defaulters an opportunity of being heard before issuing the warrants of arrest and detention orders? 7. Whether the detention orders were in violation of the principles of natural justice?
Ratio Decidendi: 1. The Court held that the Collector of Sales Tax had the jurisdiction to issue warrants of arrest and detention under Section 138 of the Delhi Land Reforms Act, 1954, because the said section empowers the Deputy Commissioner (Recovery), Sales Tax, to arrest and detain a defaulter for a period not exceeding 15 days. 2. The Court held that the detention orders were illegal because the procedure prescribed by Rule 119 of the Delhi Land Reforms Rules, 1954, had not been followed. Rule 119(2) requires the detaining authority to produce the defaulter before him without delay and to release the defaulter if there is no reason to believe that the process of detention will compel the payment of the whole or a substantial portion of the arrear. In the present case, the Collector of Sales Tax had failed to produce the defaulters before him and had failed to record his reasons for believing that the process of detention would compel the payment of the whole or a substantial portion of the arrear. 3. The Court held that the detention orders were in excess of jurisdiction because they were for a period exceeding 15 days. Section 138 of the Delhi Land Reforms Act, 1954, provides that a defaulter may be detained for a period not exceeding 15 days. In the present case, the defaulters had been detained for a period exceeding 15 days. 4. The Court held that the Collector of Sales Tax had failed to record his reasons to believe that the defaulters had the means to pay but were wilfully withholding payment. Rule 119(2) of the Delhi Land Reforms Rules, 1954, requires the detaining authority to record his reasons for believing that the process of detention will compel the payment of the whole or a substantial portion of the arrear. In the present case, the Collector of Sales Tax had failed to record any such reasons. 5. The Court held that there was no material on record to support such a belief. The Collector of Sales Tax had not produced any evidence to show that the defaulters had the means to pay but were wilfully withholding payment. 6. The Court held that the Collector of Sales Tax had failed to give the defaulters an opportunity of being heard before issuing the warrants of arrest and detention orders. Rule 119(2) of the Delhi Land Reforms Rules, 1954, does not require the detaining authority to give the defaulter an opportunity of being heard, but the Court held that the principles of natural justice required that the defaulters be given an opportunity to be heard before the detention orders were issued. 7. The Court held that the detention orders were in violation of the principles of natural justice because the defaulters had not been given an opportunity of being heard before the orders were issued.
Final Decision: The Court allowed all the writ petitions and quashed the warrants of detention issued against the petitioners. The Court also directed the respondents to bear their own costs.
( 1 ) THE issue arising for consideration in this batch of writ pelitions relates to the validity of the action already taken or proposed to be taken by the Sales Tax Authorities against the petitioners for effecting recovery of arrears of Sales Tax and Central Sales Tax payable by then under the Delhi Sales Tax Act 1975, (for short the Local Act) and the Central Sales Tax Act, 1956 (for short the Cen tral Act) by taking recourse to arrest and detention in Civii prison of the petitioners as provided under the provisions of Sections 136 and 138 of the Delhi Land Reforms Act, 1954 (for short the Land Reforms Act) and the rules made thereunder.
( 2 ) APART from the question of property and validity of the action taken by the respondents in the case of each of the petitioners, which we shall deal separately, the short but the prime common question requiring consideration is whether a person is liable to be arrested and detained for a total period of 15 days, prescribed in Section 138 of the Land Reforms Act in relation to the demand in a recovery certificate, being the total demand created on account of various assessments separately made or can such a person be detained seperately for a period of 15 days for each of the demands for different assessment years for which a joint or separate/several recovery certificates are issued by the assessing authority for recovery as arrears of land revenue.
( 3 ) TO appreciate the controversy involved and the rival contentions. We may briefly refer to the facts in Crl. Writ Petition No. 174/92 - Harmeet Singh Ghai Vs. Anand S. Khullar, which was treated as the main case.
( 4 ) THE petitioner, who was running his business under the name and style of reliance Entreprise as proprietory concern, was a registered dealer under the Local Sales Tax Act and the Central Sales Tax Act. The assessments for the years 1978-79 to 1985-86 were framed under Section 23 of the Local Act, which resulted in an additional demand totalling Approximately 3. 5 crores. It is stated that on 23 February, 1992 a public notice was issued by the Deputy Commissioner (Recovery), respondent No. I herein, giving a list of 27 defaulting dealers, the petitioner being one of them advising them to contact him and settle the matter regarding recovery of outstanding dues failing which appropriate action under the law was threatened. It is alleged that a day prior to the publication of the said notice, i. e. , 22 February, 1992, respondent No. 1, accompanied by respondent No. 2/assistant Collector, Zone-III, New Delhi came to the residence of the petitioner, took him to the Parliament Street Police Station and from there he was sent to Tihar Jail for being detained in civil prison for a period of 15 days, which was to expire on 7 March, 1992. It is further stated that respondent No. 1 again ordered detention of the petitioner for a further period of two days i. e. , upto 9 March, 1992, which was further extended up to 20 March, 1992. It is at this stage that the petitioner s wilfe, having failed to get him released, filed the present writ petition seeking a writ in the nature of Certiorari quashing the order of detention passed against the petitioner, and a further writ in the nature of Habeas Corpus directing release of the petitioner forthwith, inter alia, on the grounds that (1) having failed to make proper investigation and enquiry and without following the law and procedure as laid down in the Land Reforms Act and the rules framed thereunder respondent No. 1 had no jurisdiction to take the petitioner in custody for the recovery of alleged arrears of sales tax against Reliance Enterprises (2) no opportunity of hearing having been granted before arresting and detaining the petitioner in civil prison the principles of natural justice have been violated (3) by ordering arrest and detention of the petitioner in civil prison, respondent No. I had not only exceeded his jurisdiction but had infact abused his powers by detaini
