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Issues: (i) Whether the proviso to section 13(3) of the Mysore Sales Tax Act, 1957 barred recovery or prosecution until the assessee failed to comply with an order of the appellate authority. (ii) Whether the filing of an appeal under section 20 suspended the assessee's liability to pay the assessed tax. (iii) Whether the non-payment of tax within the time allowed by the notice of demand amounted to wilful default attracting section 29(1)(d).
Issue (i): Whether the proviso to section 13(3) of the Mysore Sales Tax Act, 1957 barred recovery or prosecution until the assessee failed to comply with an order of the appellate authority.
Analysis: The substantive part of section 13(3) authorises recovery of assessed tax as an arrear of land revenue or through a Magistrate. The proviso only affords interim protection where the assessee has moved the appellate or revisional authority and obtained appropriate relief subject to compliance with imposed conditions. It does not create the liability to pay tax, which arises from the assessment order itself, and it does not govern prosecution for failure to pay within the time fixed by the demand notice.
Conclusion: The proviso did not bar proceedings against the assessee under section 29(1)(d).
Issue (ii): Whether the filing of an appeal under section 20 suspended the assessee's liability to pay the assessed tax.
Analysis: Section 20(5) expressly provides that, notwithstanding the filing of an appeal, tax shall be paid in accordance with the assessment. The proviso enables the appellate authority, in its discretion and on sufficient security, to issue directions regarding payment before disposal of the appeal. In the absence of such directions, the assessment remains operative and the tax remains payable.
Conclusion: The appeal did not suspend the liability to pay the assessed tax.
Issue (iii): Whether the non-payment of tax within the time allowed by the notice of demand amounted to wilful default attracting section 29(1)(d).
Analysis: The assessee knew of the demand and consciously failed to pay the tax within the time allowed. Once the notice of demand was not complied with, the statutory offence under section 29(1)(d) was attracted. The conduct was deliberate and therefore wilful.
Conclusion: The assessee was guilty of wilful default and liable under section 29(1)(d).
Final Conclusion: The acquittals could not stand and the State's challenge succeeded, though the Court did not proceed to convict or sentence because of the undertaking recorded at the stage of special leave.
Ratio Decidendi: Liability to pay assessed sales tax is not suspended by the mere filing of an appeal, and absent an express stay or direction by the appellate authority, deliberate non-payment within the prescribed time constitutes an offence under the recovery and penalty provisions of the taxing statute.
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