Levy of compounding fee a bar for prosecution for non-payment of tax.

These are two connected Revisions preferred against the orders made by the learned Additional First Class Magistrate, Salem, in C.C. Nos. 663 and 664 of 1957 on his file.

The petitioners have been charged for contravention of section 15 (2) (a) of the Madras General Sales Tax Act in that they, dealers in coir and ropes, have wilfully submitted an incomplete and incorrect (and therefore an untrue) return in Form A for the years 1947-48 and 1948-1949. The accused denied the offence, when questioned under section 242, Criminal Procedure Code. They raised four preliminary objections, viz., (1) that it is not alleged, in conformity with clause (c) of section 15 as it stands at present, that the accused had fraudulently evaded the payment of the tax or the compounding fee ; (2) that there is already a compounding order under section 16 of the Act and that this bars a prosecution for the same offence ; (3) that rule 13 of the Madras General Sales Tax (Turnover and Assessment) Rules should be held to be not validly brought into force following a recent Full Bench decision of the Andhra High Court reported in Notes of Recent Cases (1957) 2 An. W. R. {State of Andhra Pradesh v. M. A. Abdul Basi & Co.1) and (4) that section 15 of the Act in its present form is not a mere amendment but a substitution for the old one made by the Madras General Sales Tax Act (Third Amendment) Act, 1956 and consequently the old section 15 stands repealed, that the Amendment Act which came into force on 8th October, 1956, is not retrospective. Section 15, it was contended, is a procedural section and the observation of Pollock, C.B., in Wright v. Hale2, cited in In re, Parthasarathi Naidu3, are relied on in support of the contention that the prosecution in these cases cannot be legally sustained.

The learned Magistrate considered these objections and found them to be devoid of merits and decided to proceed with the enquiry. Hence these Revisions by the accused persons.

There is no substance or relevancy in the first contention, because the prosecution in this case is not under sub-section (c) of section 15 but is under sub-section (a), not for any evasion fraudulent or otherwise, of any payment of tax or fee, but for submitting a return on the basis of which the tax is normally sought to be assessed and which returns were found to be untrue and to have been wilfully submitted in that matter: For definition of "wilful" see Kausalai Ammal v. Sankaramuthiah Pillai1, In re, Govindarajalu2, In re, Narasinga Muthu Chetti3, In re, Swaminatha Iyer4, In re, Subbarama Iyer5, see the analytical discussion on wilful submission of an untrue return at page 216 and following of N. R. Raghavachariar: "Sales Tax in Madras" (Law Weekly Publication) and also page 163 of V. Sundara Vyas: "The Madras General Sales Tax Companion" and Sethuraman: ‘The Law of Sales Tax in India" pages 94-95, ‘Wilful submission of untrue return.‘

The second contention that the levy of a compounding fee is a bar to the filing of a case, would have some substance if the offer to compound the offence has been accepted by the party and the transactions has been completed by him by payment of the stipulated amount. It is not so in this case. The prosecutions themselves have been launched on account of the failure of the assessees to pay the compounding fee fixed by the Department.

In regard to the third objection, the learned Magistrate has rightly pointed out that it is true that the rule has been held to be not valid by the Andhra High Court in the Full Bench decision referred to above. But this does not mean that the learned Magistrate should make a reference because for making any such reference it must first be shown that the prosecution is or is also under the said rule 13. In the instant case the prosecution does not purport to be under that rule. The facts alleged will not also bring it within its purview. The learned Magistrate has rightly pointed out the distinction to be borne in mind, viz., th