iminal Appeals Nos
150 152 of 1965
Appeals by special leave from the judgment and order dated March 17 1965 of the Mysore High Court in Criminal Appeals Nos
93 to 95 of 1965
B R L Iyengar and B R G K Achar for the appellant
K R Chaudhury for the respondents
812 The Judgment of the Court was delivered by Mudholkar J
This judgment will also govern Criminal Ap peals Nos 151 and 152 of 1965
The respondent was at the relevant time a dealer at Bijapur in groundnuts cotton seed and other commodities and was registered as a dealer under the Mysore Sales Tax Act 1957
For the period between November 12 1958 and October 31 1959 he was assessed to sales tax amounting to Rs 9864 31 ps
by the Commercial Tax Officer Bijapur in his order dated December 4 1963
On January 3 1964 the Commercial Tax Officer served on him a notice of payment requiring him to pay the tax assessed on him within 21 days
He was similarly assessed to pay tax for two subsequent periods by two separate orders passed by the Commercial Tax Officer
Two separate notices of demand were served on him requiring him to pay the tax assessed within 21 days
It is common ground that the respondent did not comply with any of the three notices
Three separate complaints were therefore preferred against him by the Commercial Tax Officer before the Judicial Magistrate First Class second court Bijapur for offences punishable under section 291d of the Act
The respondent had preferred appeals against each of the three orders of assessment under sub section
1 of section 20 of the Act
He did not however pay the tax assessed against him or any portion thereof as contemplated in the second proviso of sub section
1 of section 20 nor did he seek or obtain from the appellate authority any order under the proviso to sub section
5 of section 20
The learned Magistrate held that since the respondent had preferred appeals against the orders of assessment and those appeals were still pending when the complaints were made before him the respondent was not liable for offences under section 29 1 d
On this ground the learned Magistrate acquitted the respondent in all the three cases
Appeals preferred by the State of Mysore against the orders of acquittal passed in favour of the respondent were rejected by the High Court on the ground that as the State could avail itself of other remedies under the Act for enforcing the payment of tax levied on the respondent it did not think it fit to exercise its discretion under section 421 1 of the Code of Criminal Procedure and entertain the appeals
Mr Chaudhuri refers to the proviso to sub section
3 of section 13 and contends that unless the requirements of the proviso are satisfied he is not liable to be proceeded against under section 29 1 d
In order to appreciate his argument it is desirable to reproduce the provision relied upon by him
Sub section 3 of section 13 reads as follows Any tax assessed or any other amount due under this Act from a dealer may without prejudice to any other mode of collection be recovered a as if it were an arrear of land revenue or 813 b on application to any Magistrate by such Magistrate as if it were a fine imposed by him Provided that no proceeding for such recovery shall be taken or continued as long as he has in regard to the payment of such tax or other amount as the case may be complied with an order by any of the authorities to whom the dealer has appealed or applied for revision under sections 20 21 22 23 or 24
 The matter dealt with by section 13 is payment and recovery of tax
The substantive part of the provision renders an assessee in arrears of tax liable to be proceeded against under either cl
a or cl
b of the provision
Mr Chaudhury however contends that by virtue of the proviso an assessee will not be liable to be proceeded against unless it is shown that he has failed to comply with an order made by the appropriate authority under one of the sections refered to in the proviso
He points out that though he has preferred appeals under section 20 of the Act no order has been made by the appellate authority in any of the appeals dealing with the question of payment or otherwise of the tax and thatthe reforethere has been no failure on the part of the respondent to comply with an order made by the appropriate authority
Mr Chaudhury in effect wants us to construe the proviso as if it contemplated the creation of liability to pay the tax by an order of the appropriate authority under one of the sections specified in the proviso
There is no warrant for such a construction
The liability to pay tax is created by the order of assessment
Where tax so assessed is not paid despite service of notice of demand the substantive portion of sub section
3 of section 13 renders the assessee liable to be proceeded against under cl
a or cl
b of that provision
The assessee who has moved the appropriate authority under one of the provisions referred to in the proviso has however been afforded interim protection from action under cl
a or cl
b provided that he approaches the appropriate authority and obtains from that authority an order of stay of proceedings under cl
a or cl
That however is not enough
If the order of the appropriate authority lays down any condition the proviso requires that the assessee must comply with those conditions before he can obtain interim relief under the proviso
Apart from that we fail to see how the proviso to sub section
3 of section 13 can at all be an answer to a prosecution under section 29 1 d
What is rendered an offence under section 29 1 d is the failure of the assessee to pay the tax within the time allowed
But where as here the assessee has not paid the tax within the time allowed by a notice of demand he immediately renders himself liable to be proceeded against under section 29 1 d
Mr Chaudhury then contended that in view of the fact that an appeal has been preferred the liability of the assessee to pay 814 the tax must be deemed to have been suspended during the pendency of the appeal
This argument ignores the specific provisions of sub section
5 of section 20 and the proviso thereto
They read thus  Notwithstanding that an appeal has been preferred under sub section 1 the tax shall be paid in accordance with the assessment made in the case  Provided that the appellate authority may in its discretion give such directions as it thinks fit in regard to the payment of the tax before the disposal of the appeal if the appellant furnishes sufficient security to its satisfaction in such form and in such manner as may be prescribed
 The provision we have just quoted is a complete answer to Mr Chaudhuri s contention
Mr Chaudhury then contended that there was no wilful default on the part of the respondent
It is difficult to appreciate what he means by saying that there was no wilful default
The respondent knew that he was required to pay the tax within certain time and also knew that he had not complied with the notice of demand
His action in not paying the tax was quite clearly deliberate and therefore wilful
There is no substance in this contention
We are therefore clear that the acquittal of the respondent for offences in the case was unwarranted
We would therefore have after setting aside his acquittal in each of the three cases convicted and sentenced him under section 29 1 d of the Act but for the fact that when special leave was granted an undertaking was given by the State that irrespective of the result of the appeal the respondent would not be prosecuted
Probably what was meant was that the State would not press for conviction and sentence of the respondent
Therefore though we allow the appeals and set aside the acquittal of the respondent in the three cases we leave the matter just there
Appeals allowed


Summary:
The respondent was assessed to sales tax and was served with a notice requiring him to pay the amount within 21 days
He preferred an appeal against the order of assessment but did not pay the tax nor did he obtain an order of stay of proceedings from teh appellate authority
While the appeal was pending a complaint was filed against him under section 291d of the Mysore Sales tax Act 1957 because the demand was not complied with but the trial court and the High Court acquitted In appeal to this Court by the State HELD The acquittal of the respondent was unwarranted as his action in not paying the tax within the time allowed was deliberate and therefore wilful and such failure to pay is rendered an offence under section 291d
814 D E The liability to pay tax is created by the order of assessment
Where the tax so assessed is not paid despite service of notice of demand the tax may be recovered under section 133a as an arrear of land revenue or under section 13 3 b on an application to a magistrate as if it were a fine imposed on the assessee
Under the proviso to section 133 the assessee has been afforded interim protection from action under section 13 3 a or b provided he obtains from the appropriate appellate or revisional authority mentioned in the proviso an order of stat of proceedings
Merely because an appeal has been preferred the liability of the assessee to pay the tax cannot be deemed to be suspended under section 205
This provision requires that if the order of such appropriate authority lays down any condition the proviso requires that the assess must comply with it before he can obtain interim relief
Apart from these two methods of obtaining interim relief the proviso to section 133 cannot be an answer to a prosecution under section 291d
813 E G