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of <h1>High Court upholds acquittal in sales tax case, citing pending appeals. Liability not suspended.</h1> The High Court upheld the acquittal of a dealer in commodities for failure to pay assessed sales tax, citing pending appeals as exempting him from ... Acquittal orders - Held that:- Appeal allowed. The acquittal of the appellant for offences he was charged with 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. Issues:- Interpretation of provisions under the Mysore Sales Tax Act, 1957 regarding tax assessment and recovery.- Determination of liability under section 29(1)(d) for failure to pay assessed tax.- Analysis of the proviso to sub-section (3) of section 13 and its impact on liability.- Examination of the impact of pending appeals on the liability to pay tax.- Consideration of the defense of lack of wilful default in tax payment.Interpretation of Provisions under the Mysore Sales Tax Act, 1957:The judgment addressed the case where the respondent, a dealer in commodities, was assessed for sales tax but failed to comply with the payment notices. The respondent had appealed the assessment orders but did not pay the tax or seek orders for stay of proceedings. The Magistrate acquitted the respondent, stating that pending appeals exempted him from offenses under section 29(1)(d). The High Court upheld the acquittal, citing alternative remedies for tax enforcement. The defense argued the proviso to sub-section (3) of section 13 exempted the respondent from prosecution unless he failed to comply with orders from appellate authorities. However, the Court clarified that liability arises from the assessment order, not the appellate authority's order.Determination of Liability under Section 29(1)(d):The Court rejected the argument that the proviso to section 13(3) shields the respondent from prosecution under section 29(1)(d) for failure to pay tax within the specified time. The failure to pay tax upon receiving the notice of demand immediately triggers liability under section 29(1)(d), irrespective of pending appeals or lack of orders from appellate authorities regarding payment.Impact of Pending Appeals on Tax Liability:The defense claimed that the liability to pay tax was suspended during the appeal, but the Court cited section 20(5) and its proviso, emphasizing that tax payment must align with the assessment, and the appellate authority can provide directions on payment only with sufficient security. The contention that there was no wilful default in tax payment was dismissed, as the respondent's deliberate non-compliance with payment notices demonstrated wilful action.Conclusion:The Court found the respondent's acquittal unwarranted and would have convicted and sentenced him under section 29(1)(d) but for the State's undertaking not to prosecute regardless of the appeal's outcome. While setting aside the acquittal, the Court respected the State's commitment not to press for conviction, thereby concluding the matter without further prosecution.
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