Vazhakkala Estate Pvt. Ltd. v. State of Kerala — 1997 DIGILAW 395 (KER)

Judgment :- G. Sivarajan, J. The matter arises under the Kerala Plantations Tax Act, 1960 (Act 17/60). The petitioner is an assessee under the said Act in respect of plantation held by it in four Taluks spread in three districts. The Assistant Collector, Ottapalam initiated proceedings under S.19(b) of the Act against the petitioner alleging that it had not filed proper return under S.4 of the Act. According to the third respondent, the petitioner had not filed return under S.4 of the Act until 29.5.1989 though there was yield from the properties from 1969 onwards which is a violation of the provisions of sub-ss.(1) and (2) of S.4 of the Act. The petitioner filed returns only on 29.5.1989 and plantation tax was assessed on the petitioner from 1969-70 to 1989-90 for a total sure of Rs. 1,01,025/-. It is also stated that the non-filing of returns under S.4 of the Act in time and non furnishing the information regarding plantations in four Taluks in three revenue districts in the return filed before the third respondent was with the sole motive of escaping the assessment of plantation tax. On these grounds the third respondent imposed on the petitioner a fine of Rs. 5/- per day for 7365 days from 1.4.1969 to 28.5.1989 totalling to Rs. 36,825/- and the petitioner was directed to renu' t the said amount on or before 25.3.1991, evidenced by Ext. P-1. Aggrieved by the said order, petitioner filed appeal before the second respondent. During the pendency of the appeal when proceedings were initiated for recovery of the demand, petitioner filed O.P. No. 3632 of 1991 and this court by judgment dated 24th June, 1996 disposed of the same by directing the second respondent to consider and pass orders on the appeal, evidenced by Ext. P-2. Thereafter, the second respondent disposed of the appeal by order dated 28.5.1997, evidenced by Ext. P-3. It is stated in the said order that the fact that the petitioner is having estates in more than one district came into light only when the appeal petition against the assessment order of the Tahsildar, Mannarkkad was disposed of by the Sub Collector, Ottapalam on 25.7.1989 and on that basis the Sub Collector revised the assessment from 1969 onwards after getting verification report from the concerned officers as per assessment orders dated 6.3.1991. It was also noticed that assessments were not being made in each Taluk separately from 1969. It is also stated that the fact that the appellant (petitioner herein) is being assessed separately by the Tahsildar, Mannarkkad and Tahsildar, Punalur is also accepted by the assessing authority and therefore, it is not a case of not filing a return, but not filing a proper return before the proper assessing authority. The second respondent had remitted the matter to the third respondent with the direction to give an opportunity to the petitioner to put forward its case and also to verify the returns filed by the appellant from 1969-70 before the Tahsildar, Mannarkkad and to verify whether the details of all lands in the State were declared in those returns. While doing so, the second respondent rejected the plea of the petitioner that the authority to impose penalty under S.19(b) is not clearly mentioned and that the assessing authority is not competent to impose penalty stating that the authority to impose fine for not filing returns is the authority before whom the return ought to have been filed and in this case the Sub Collector, Ottapalam is the authority. 2. In this Original Petition the petitioner has challenged the very jurisdiction of the third and second respondents in imposing the fine under S.19(b) of the Act. The learned counsel appearing for the petitioner submitted that the second and third respondents have no authority to pass an order imposing fine under S.19(b) of the Act. The learned counsel further submitted that the fine under S.19(b) can be imposed only by a Magistrate and therefore, Ext. P-1 order imposing fine and Ext. P-2 order holding that the third respondent has power to impose the fine under S.19(b) are unauthorised and non est. in law. The learned counsel also submitted that though a remedy by way of reference to the District Court is provided under S.9A and since Exts. P-1 and P-2 orders are wholly without jurisdiction, the petitioner has not resorted to the said remedy and has challenged the same in this proceedings. It is also stated that though the petitioner had initially challenged Ext. P-1 and P-2 orders are wholly without jurisdiction, the petitioner has not resorted to the said remedy and has challenged the same in this proceedings. It is also stated that though the petitioner had initially challenged Ext. P-3 order passed by the second respondent and also sought for a declaration that the third respondent has no jurisdiction to proceed against the petitioner under S.19 of the Act for imposition of fine, the petitioner filed CMP No. 29892 of 1997 for amendment of the O.P. by challenging Ext, P1 order passed by the third respondent also. The learned counsel took me to the provisions of Ss.19, 22 and 23 of the Act and also the Notification No. 37225/B3/60/RD dated 6th October, 1960 published in the Gazette dated 25th October, 1960 and submitted that toe third respondent has no authority to pass orders under S.19 and that even the second respondent, who is the authority notified as provided under S.20(1) of the Act, has jurisdiction only to sanction prosecutions for offences under Ss.18,19,20 and 21 of the Act. 3. I have heard the learned Government Pleader also. He submitted that it is the assessing authority who has got the power to impose fine as contemplated under S.19 of the Act if it is found that there is violation of the provisions of S.4 of the Act. He also submitted that Ext. P1 proceedings has been initiated by the third respondent assessing authority in the course of the assessment proceedings. He further submitted that if the petitioner is aggrieved by Exts. P-1 and P-3 orders passed by the third and second respondents respectively its remedy is only by way of a reference to the District Court as provided under S.9A of the Act and that the petitioner has not availed the said remedy. 3 A. I have considered the matter. The only contention taken by the petitioner is that the third and the second respondents have no authority to impose fine under S.19 of the Act. In order to appreciate the said contention, it is necessary to refer to the relevant provisions of the Act. 3 A. I have considered the matter. The only contention taken by the petitioner is that the third and the second respondents have no authority to impose fine under S.19 of the Act. In order to appreciate the said contention, it is necessary to refer to the relevant provisions of the Act. S.3 which is the charging section provides that for every financial year commencing on and from the first day of April, 1960, there shall be charged in respect of the lands comprised in plantations held by a person on the corresponding valuation date a tax (hereinafter referred to as 'plantation tax') at the rates specified in Schedule I and the person holding such plantations shall be liable to pay the plantation tax. S.4 provides for filing of returns which provides that every person who on the first day of September, 1960, holds five acres or more in extent of plantations in the aggregate shall furnish to the assessing authority so as fo reach him before the thirty first day of December a return in the prescribed form and verified in the prescribed manner and containing such particulars as may be prescribed. S.5 provides for determination of extent of plantation and the assessment of plantation tax. It provides that if the assessing authority is satisfied that a return made under S.4 is correct and complete, he shall, by order in writing, determine the extent of plantations held by the assessee and assess amount of plantation tax payable by him on the basis of such return. If the assessing authority is not satisfied that the return is correct and complete, he has got the power to complete the assessment after conducting enquiry and after affording opportunity to the assessee also. Sub-s.(4) of S.5 provides for best judgment assessment in case where the assessee fails to file a return or fails to comply with the terms of the notice. S.6A provides for escapement of assessment. S.9 provides for an appeal against an order passed by the assessing authority and S.9A provides for a reference to the District Court requiring the appellate authority to refer to the District Court any question of law arising out of an order passed under S.9. S.6A provides for escapement of assessment. S.9 provides for an appeal against an order passed by the assessing authority and S.9A provides for a reference to the District Court requiring the appellate authority to refer to the District Court any question of law arising out of an order passed under S.9. S.10 confers power on the Board of Revenue to call for and examine the record of any proceedings pending before or disposed of by the appellate authority and to pass such order in reference thereto as the Board of Revenue thinks fit. S.11 provides for rectification of mistakes. S.12 provides that if any person makes a statement in a verification mentioned in S.4 or sub-s.(2) of S.9 which is false and which he either knows or believes to be false or does not believe to be true, he shall be deemed to have committed the offence described in S.177 of the IPC S.20 gives power to the assessing authority to call for information from the assessee. Sub-s.(2) thereof provides that if any person fails without reasonable cause or excuse to furnish in due time any information called for under sub-s.(1), he shall be punishable with fine which may extend to Rs. 50/-. S.21 gives power of inspection to the assessing authority or any other officer authorised by the Government. Sub-s.(2) thereof provides that any person who obstructs the assessing authority or other officer authorised under sub-s.(1) or fails to produce any book, register or record when required to be produced or furnish the available information, shall be punishable with imprisonment of either description for a term which may extend to three months or with fine which may extend to five hundred rupees or with both. S.19 of the Act with which we are concerned reads as follows: "19. Fa ilure to furnish return or document.- If any person fails without reasonable cause or excuse - (a) to furnish in due time any return specified in sub-s.(1) or sub-s.(2) or sub-s.(3) of S.4; or (b) to produce or cause to be produced on or before the date mentioned in any notice under sub-s.(5) of S.4 such documents as are referred to in the notice, he shall be punishable with fine which may extend to five rupees for every day during which the default continues." S.22 dealing with prosecutions reads as follows: "22. Prosecutions: - (1) A person shall not be proceeded against for an offence under S.18, S.19, S.20 or S.21 except at the instance of such officer as may be authorised by the Government in this behalf. (2) Before instituting proceedings against any person under sub-s.(1) the officer so authorised shall call upon such person to show cause why proceedings should not be instituted against him. (3) The officer so authorised may either before or after the institution of proceedings compound any such offence other than an offence under S . 21 ." S.'23 regarding cognizance of offences reads as follows: "23. Cognizance of offences:- No Magistrate other than al magistrate of the first class shall try any offence under this Act". The relevant portion of the Notification dated 6th October 1960 in relation to sub-s . (1) of S.21 follows: "Under sub-s.(1) of S.22 of the Kerala Plantations (Additional Tax) Act, 1960, the Government of Kerala hereby authorises the District Collector of the District in which the assessing authority holds his jurisdiction to sanction prosecutions for offences under S. 18, S.19, S.20 or 21 of the Act. Unlike in many other taxing statutes, there is no provision for imposition of penalty for Violation of that provisions of toe Act. Ss.18, 19, 20 & 21 of the Act provide for punishment either by way of fine or by way of sentence and/or fine. The authority, who has to impose the fine under Ss.18, 19 & 20 or under S.21, is not specified in clear terms. Ss.22 and 23 give some indication. S.22 provides that a person shall not be proceeded against for an offence under S.18, S.19, S.20 or S.21 except at the instance of such officer as may be authorised by the Government in this behalf and sub-s.(2) provides that before instituting proceedings against any person under sub-s, (1) the officer so authorised shall call upon such person to show cause why proceedings should not be instituted against him and sub-s.(3) provides that the officer so authorised may either before or after the institution of proceedings compound any such offence other than an offence under S.21 (underlining supplied). S.23 provides that no Magistrate other than a Magistrate of the first class shall try any offence under this Act. S.23 provides that no Magistrate other than a Magistrate of the first class shall try any offence under this Act. By the notification referred to above, the Government have authorised the District Collector of the District in which the assessing authority holds the jurisdiction for the purpose of S.22. The notification says that the District Collector of the District in which the assessing authority holds -his jurisdiction is the officer authorised to sanction procecutions .for offences under Ss.18, 19, 20 & 21 of the Act. Apart from the provisions of Ss.1.8,19, 20 &. 2.1 there is no other provision in the Act making a particular act or omission an offence for invocation of the provisions of Ss.22 and 23 of the Act. Further S.22 provides for prosecution only in respect of offences provided under Ss.18, 19, 20 & 21. A reading of Ss.22 and 23 read with the notification makes the position clear that the officer authorised by the Government is not the authority for imposition of fine under S .19 or S . 20 or for imposition of sentence and fine; but he is only an authority to institute proceedings for offences under the said sections and that he is given the power only to compound the offences either before the institution of the prosecution or during the pendency of the prosecution proceedings. This is evident from the expressions used in S.22 such as "at the instance of and "before instituting proceedings". The use of the aforesaid two expressions, according to me, is indicative of an action to be taken by a person before a forum or court and not to himself. This is made very clear by the notification which says that the authorised officer is the authority to sanction prosecutions for offences under Ss.18, 19, 20 & 21 of the Act. In the light of the above, I am of the view that neither the second respondent nor the third respondent has any authority to impose fine under S.19 of the Act and that the only authority who can impose fine as contemplated under S.19 is a Magistrate of the first class. 5. In the light of the above, I am of the view that neither the second respondent nor the third respondent has any authority to impose fine under S.19 of the Act and that the only authority who can impose fine as contemplated under S.19 is a Magistrate of the first class. 5. It is possible to contend that the assessing authority can impose fine contemplated under S.19 of the Act since the alleged offences are in relation to the assessment proceedings, for, under S.4(1) of the Act the return has to be filed before the assessing authority within the time fixed therein. Likewise, the non-production of the documents required by the assessing authority under sub-s.(5) of S.4 is made the offence. Thus, it would appear that it is the satisfaction of the assessing authority that the assessee has failed to comply with the said requirements that constitutes the offence warranting imposition of fine and that the said authority can impose the fine; but as already stated, the provisions of Ss.22 and 23 of the Act read with the notification clearly oust the jurisdiction of the assessing authority in the matter of imposition of fine under S.19 of the Act and therefore, there is no merit in the submission of the learned Government Pleader that the assessing authority is the competent authority to impose fine under S.19 of the Act. 6. Now, coming to the question as to whether the petitioner can be found fault with for not availing the remedy provided under S.9A of the Act, it would appear that the non-availing of the said remedy would not oust the jurisdiction of this Court under Art.226 of the Constitution of India. This is particularly for the reason that notwithstanding the provisions of S.9A of the Act, the statute gives power on the Board of Revenue to revise an order passed by the appellate authority under S.9 of the Act subject, of course, to the matters not covered by a judgment in reference under S.9A. This shows that even if the petitioner has not sought for a reference under S.9A, if the petitioner makes an application under S.10, the Board is given the power to interfere with such an order. This shows that even if the petitioner has not sought for a reference under S.9A, if the petitioner makes an application under S.10, the Board is given the power to interfere with such an order. That apart, since the question raised in this Original Petition is one in relation to the very jurisdiction of the assessing authority to impose fine under S.19 of the Act, according to me, the remedy provided under S.9A or S.10 of the Act is no bar for invoking the jurisdiction of this Court under Art.226 of the Constitution of India. I accordingly quash Exts. P1 and P3 orders passed by the third and second respondents respectively. The Original Petition is allowed.