Jurisdiction of Criminal Court to question the validity of assessment etc.

Ramaswami, J.

And the learned Judge made the following order of reference to a Full Bench on 9th October, 1956 :-

Order of Reference to the Full Bench.

1. The point for determination in this appeal is whether section 16-A of the Madras General Sales Tax Act is ultra vires and the liability to pay the assessment levied can be challenged in the Criminal Court. If the answer is in the affirmative, then this appeal should be dismissed and if the answer is in the negative it has got to be allowed.

2. Section 16-A was inserted by the Madras Amendment Act XXV of 1957 and is designed to render nugatory the line of decisions given prior to the amendment to the effect that the jurisdiction of the Court to go into the validity of the assessment was not taken away. Prior to the enactment of this provision in 1947, which was brought into force on 1st January, 1948, this Court laid down in several decisions that the burden is upon the prosecution to establish affirmatively that the accused was liable to pay tax and that he failed to pay it : Ramaswami Iyengar v. Sivakasi Municipality (1936 M.W.N. Crl. 221), Public Procecutor v. Khader Khan 1946 (2) MLJ 461; In re Appa Rao (1949 1949 AIR(Mad) 418; and Venkanna, In re 1947 (2) MLJ 12 (Short Notes)); see per contra Narasingamuthu Chettiar, In re 1948 (2) MLJ 93. On account of the fact as pointed by Sundar Vyas in his "Madras General Sales Tax Act", 2nd Edition, page 160; that the department found it difficult to prove all links in the chain needed to sustain the assessment in a Criminal Court which starts with a presumption in favour of the accused, and there was also need to avoid conflicting decisions of parallel courts, civil, criminal and revenue, on the same question, it was decided to oust the jurisdiction of Civil and Criminal Courts and section 16-A was enacted. The original proposal of the Government to oust the jurisdiction of Civil Courts also was dropped. But subsequently section 18-A has been enacted by Act VI of 1951 under which no suit or other proceeding shall, except as expressly provided in the Act be instituted in any court to set aside or modify any assessment made under this Act. We are concerned here only with section 16-A. In regard to this amended section 16-A on the ground that this amendment is not retrospective, this Court has held that prosecutions commenced prior to or even pending on 1st January, 1948, and prosecutions commenced after 1st January, 1948, in respect of assessments made before 1st January, 1948, are governed by the decisions in Public Prosecutor v. Khader Khan 1946 (2) MLJ 461; and Narasingmuthu Chettiar, In re 1948 (2) MLJ 93, and the principles set out therein. In regard to subsequent assessments, section 16-A makes the validity of any assessment or imposition unassailable in a Criminal Court. Section 18-A makes a civil suit or other proceeding incompetent for the purpose of setting aside or modifying any assessment under this Act. Thus, section 16-A bars a defence while section 18-A bars the institution of the proceeding itself at the instance of the assessee. The result is the assessment or levy can be questioned only under the provisions and by the methods prescribed under the Act, and not de hors the Act.

3. There are two conflicting Bench decisions about section 16-A being ultra vires or intra vires. In Syed Mohamed and Co. v. State of Madras 65 L.W. 1030), decided by the learned Chief Justice and Venkatarama Aiyar, J., it was held that the provision in section 16-A of the Madras General Sales Tax Act is analogous to the rules which preclude judgment-debtors from putting forward at the stage of execution of a decree defences which were open to them in the suit itself, is not repugnant to the rules of natural justice, and that the Act provides for appeals and revisions against the order of assessment and it cannot be said that the assessee is denied any opportunity to contest his claim in regard to the assessment by reason of the enactme