Tax assessment challenge in criminal proceedings allowed where statutory bar on judicial inquiry was unconstitutional.

Section 16A of the Madras General Sales Tax Act barred a criminal court from examining the validity of the assessment or the assessee's tax liability, but this restriction was treated as unconstitutional where the accused challenged the levy itself on constitutional grounds and on the basis that the assessment was outside the Act. The provision was also found to curtail ordinary rights under the Criminal Procedure Code, including the right of defence and revisional scrutiny by superior criminal courts, and to be inconsistent with equal protection. The result was that Section 16A was held ultra vires and the assessment and liability could be contested in the criminal proceedings, so the convictions and sentences could not stand.

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Issues: Whether Section 16A of the Madras General Sales Tax Act, which barred a criminal court from questioning the validity of the assessment or the liability to pay tax, was ultra vires the Constitution and the Criminal Procedure Code, and whether convictions under Section 15(b) could therefore stand.

Analysis: The proceeding under Section 15(b) was treated as a criminal prosecution resulting in a conviction and fine, though launched to enforce payment of assessed tax. The statutory scheme provided machinery for assessment, appeal and revision, but Section 16A went further and excluded inquiry in a criminal court into the legality of the assessment and the assessee's liability. The Court held that such a bar could not operate where the assessee challenged the very basis of the levy on constitutional grounds under Article 286(1)(b) and on the footing that the assessment was outside the Act. It further held that Section 16A curtailed the ordinary rights of an accused under the Criminal Procedure Code, including the right to defend himself and the revisional jurisdiction of superior criminal courts, and that the provision was inconsistent with the equal protection guarantee.

Conclusion: Section 16A was held ultra vires, and the accused were entitled to challenge the assessment and liability in the criminal proceedings. The convictions and sentences could not be sustained.

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