1999 (9) TMI 921 - HC - VAT and Sales Tax

Court rules prosecution under Central Sales Tax Act without written sanction illegal, emphasizing need for authorization

Jakkampudi Madhusudhana Rao and Another Versus Assistant Commercial Tax Officer and Another

The court ruled that taking cognizance of an offence under the Central Sales Tax Act without prior written sanction from the State Government or an ... - Issues:1. Whether the court can take cognizance of an offence under the Central Sales Tax Act without previous sanction from the State Government or an authorized officer.2. Whether oral sanction is acceptable for taking cognizance of an offence under the Act.Analysis:1. The petitioners, managing director and director of a private limited company, challenged a criminal complaint filed against them for non-payment of Central sales tax arrears. The petitioners argued that under Section 11 of the Central Sales Tax Act, 1956, no court can take cognizance of an offence without the previous sanction of the State Government or an authorized officer. The absence of such sanction renders the court's action illegal. The court examined the provision of Section 11 and emphasized the necessity of written sanction from the concerned authority before initiating any prosecution under the Act.2. The Assistant Government Pleader contended that oral sanction was sufficient in this case, as evidenced by the direction given by the Commercial Tax Officer to launch the prosecution. However, the court rejected this argument, stating that in a legal system based on the rule of law, oral orders are unacceptable. The court highlighted that every administrative order must be in writing, especially in a jurisdiction with judicial review. It further emphasized that the requirement of 'previous sanction' in Section 11 implies written authorization to ensure a thorough evaluation by the authorities before prosecution. The court concluded that the absence of written sanction from the State Government or the authorized officer invalidated the court's cognizance of the complaint.3. The court held that the lack of previous written sanction by the State Government or the concerned Commercial Tax Officer made the court's action in taking cognizance of the complaint illegal. Consequently, the court allowed the writ petition, issuing a writ of mandamus to declare the complaint as illegal and void. The judgment emphasized the importance of adhering to legal procedures and the rule of law, highlighting that oral sanction cannot replace the requirement of written authorization for initiating legal proceedings under the Central Sales Tax Act.In conclusion, the judgment clarified the necessity of written sanction from the appropriate authority before a court can take cognizance of an offence under the Central Sales Tax Act. The ruling underscored the significance of following legal procedures and upholding the rule of law in administrative and judicial actions.