TaxTMI 
TaxTMI 
1957 (11) TMI 11
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....ame up for hearing, the Court directed the Sales Tax Appellate Tribunal to submit its findings on two points. The order of the Court was made by SUBBA RAO, C.J.-These two revisions arise out of the order of the Andhra Sales Tax Appellate Tribunal in respect of assessments made by the Deputy Commercial Tax Officer, Tadapatri, on the petitioner for the two years 1952-53 and 1953-54. The Sales Tax Authorities having held that the return of the turnover was not true, estimated the turn- over and assessed him on a total turnover of Rs. 12,452-6-1 for 1952-53 and Rs. 10,353-9-6 for 1953-54. The orders of the Commercial Tax Officers were confirmed by the Tribunal. The order of the Tribunal discloses that the assessee only argued before them two questions, viz., that they were petty dealers and that the writing found in the books and letters found in their business place were those of an insane son of the dealer and that they should not be relied upon. The arguments were rejected, and the appeals were dismissed. Hence the revisions. Learned counsel for the assessee argued that before the Tribunal, on behalf of the assessee, it was contended that the District Magistrate, Gooty, in C.C. No. ....
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.... The appellant has not served a copy of this judgment of the State Representative nor filed a petition to admit the judgment in evidence at the time of hearing of the appeal. In the circumstances it cannot be said that he has formerly brought the judgment to the notice of the Tribunal and addressed arguments regarding its effect on the assessment proceedings. Point No.(2): The Deputy Commercial Tax Officer, Tadpatri, having found two bill books, 2 bound-note books, one pocket size note book, 4 purchase bills and a letter-head pad containing some entries (in pencil) of sales on a surprise inspection of the appellant's business premises, assessed the appellant on best judgment basis for the years 1952-53 and 1953-54. The appellant preferred appeals to the Commercial Tax Officer urging that writings in the books and letters found in the business premises were those of the appellant's insane son and cannot therefore be relied upon. But the Commercial Tax Officer rejected the said contention and dismissed the appeal. The Tribunal also dismissed the appeals rejecting that contention "rightly" as observed by the High Court. It was, however, urged before the High Court, that in C.C. No.....
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....ed as a bar on the principle of res judicata against the Tribunal coming to its own conclusions on evidence before it regarding the connection of the accused with these books. The learned Advocate for the appellant has cited the decision of the Madras High Court reported in Jerome D'Silva v. Regional Transport Authority(1952) 1 M.L.J. 35. The judgment is not relevant to the point at issue, but we still refer to it as the learned Advocate has advanced serious argument on the analogy of that decision. The facts in that case are as follows: The petitioner before the High Court in that case was the owner of a lorry No. MDX 1251 having a public carrier permit granted by the Regional Transport Authority, South Kanara. On 14th April, 1950, his lorry was detained on suspicion that it contained smuggled rice and the owner was prosecuted by the policy for offences under section 186 of the Indian Penal Code and section 7 of the Essential Supplies Act in C.C. No. 602 of 1950 on the file of A.F.C.M's Court, Mangalore. But he was acquitted on 6th January, 1951. The Regional Transport Officer meanwhile issued a notice calling upon him to show cause why his permit should not be cancelled or suspen....
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.... could be invoked. The fact that the appellant was acquitted of an offence for non-submission of return in time, cannot be used by him as a bar against the appropriate authority or the Tribunal levying proper tax on him on the basis of proper evidence later on. Still less can the appellant rely upon the observation of the Criminal Court that sufficient evidence was not placed before it to connect the accused with the account books, as conclusive finding that they did not relate to the accused at all so as to prevent any other Court from coming to a different conclusion on further material that might be placed before it, for proving the connection. Our finding therefore on point No.(2) is that the District Magistrate did not give any definite finding that the account books (Exs. P.3 to P-8 before him) did not relate to the accused at all but merely observed that the connection could not be deemed to be established in the absence of more satisfactory evidence and such a conclusion is no bar to the Tribunal arriving at its own conclusions on the material before it regarding the connection between the accused and the accounts in question. The acquittal of the accused by the Criminal Co....
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.... Criminal Court binding on the Tribunal? (b) If so, what is its effect on the assessment proceedings? Point (a): The facts may be recounted briefly. The assessees are dealers in bamboos and timber at Tadpatri. They were carrying on business for a number of years without submitting returns under the Sales Tax Act in view of their turnover not reaching the limit of Rs. 10,000 at any time. On 11th December, 1954, the Deputy Commercial Tax Officer paid a surprise visit to the business premises and found large stocks of bamboos and timber. He seized two bill books, two bound note books, one pocket size note book, four purchase bills and a letter-head paper containing some entries in pencil under date 14th March, 1952. He worked out the figures of turnover and proposed assessing the dealers on a total of Rs. 12,452-6-1 for 1952-53 and Rs. 10,353-9-6 for 1953-54. The dealers objected saying that the entries were mere scribblings of an insane member of the family and did not represent the transactions of the business. The plea was rejected and the assessment made on the figures proposed by the officer on 30th January, 1955. The assessees appealed to the Commercial Tax Officer, who confirme....
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....as amounting merely to holding that the prosecution failed to prove beyond reasonable doubt the connection of the accused with the documents and not as positively and unequivocally laying down that the documents did not belong to the accused. In this case arises quite an important question of law whether in matters of taxation, as under the Madras General Sales Tax Act, an acquittal by a Criminal Court in a prosecution involving substantially the same questions as form the basis of the assessment, bars the department and the Tribunal making or confirming an assessment. In other words, the problem is how far the judgment and findings of a Criminal Court are binding on administrative and quasi Judicial Tribunals. The learned Advocate for the petitioners maintains that the department, having voluntarily invited a decision by the Criminal Court on a stated issue, cannot be allowed to reject the finding if it is adverse to them. Prima facie the argument sounds plausible but on an analysis of the legal position, leaves us in no doubt that it is wholly untenable. For the assessees reliance is placed on the principle of the decision in Jerome D'Silva v. Regional Transport Authority(1952) 1....
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..... In Ballantyne v. Mackinhon [1896] 2 Q.B. 455, 462. a reference was made to a significant observation in an earlier case in these words: "A judgment in an English Court is not conclusive as to anything but the point decided, and therefore a judgment of conviction on an indictment for forging a bill of exchange, though conclusive, as to the prisoner being a convicted felon is not only not conclusive, but is not even admissible evidence of the forgery in an action on the bill, though the conviction must have proceeded on the ground that the bill was forged." As early as in 1868 in Keramutoolah Chowdhary v. Gholam Hossein(1868) 9 Suth. W.R. (Civil) 77. it was held that a proceeding of a Criminal Court is not admissible as evidence and would not relieve a Civil Court from the duty to find facts for itself. In Kashyap v. EmperorA.I.R. 1945 Lah. 23. the Full Bench wished very much that a conflict of findings between two Courts on the same subject were avoided but could find no provision in the Evidence Act which could obviate it. Their Lordships observe: "I must admit that it would have been a good thing to avoid conflict of opinions between the two Courts if it were legally possible....
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....erent in the division of causes into criminal and civil. The judgment of neither court is binding on the other and each must decide the cause on the evidence before it. If they arrive at different conclusions, it is regrettable, but unavoidable." We need hardly emphasise the fundamental differences in the very object, approach and procedure relating to civil and criminal actions. The standard of proof for imposing a liability, it is well known, varies within wide limits as the action is criminal, civil or fiscal. While in a civil suit a defendant can be made liable on probabilities or the action decided on a mere consideration of the burden of proof in the absence of other evidence, no accused can be convicted on such uncertain grounds. The principle governing criminal justice that the State would rather allow a score of real offenders to escape than see a single innocent man convicted, can hardly find an echo in civil litigation. If the same principle should be extended to the realm of taxation, the consequences on the economy of the State may well be imagined. It is undeniable that so far as the Civil Courts and Tribunals, to which the provisions of the Evidence Act apply, are....
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....quit. That principle can apply only to a second prosecution for the same offence. The English decision cited for the assessees, King v. Captain Rosh168 Eng. Reports 169., was a clear case of an offender, who had been acquitted in the earlier prosecution, being subjected to the order of a second criminal trial. The proceedings by the department to make an assessment in the case on hand can never be equated to a prosecution for an offence. The principle of res judicata embodied in section 11 of the Civil Procedure Code can have no application as the field of its operation is limited to civil actions; nor can the department be precluded from proceeding with the assessment on the ground of acquiescence in the Magistrate's finding and decision. There is no other principle of law or equity which the assessees can urge as a bar to an independent investigation by the department or the Tribunal. In Jerome D'Silva v. Regional Transport Authority[1952] 1 M.L.J. 35. cited for the assessees, the Madras High Court definitely limited the scope and ambit of the exception which they were making to the general rule of inadmissibility. In stating that if there is a conviction by a competent Crimin....