P.N.BHAGWATI - (1.) The short question that arises in this petition is whether the State is entitled to proceed against a surety for payment of tax liability of an assessee under the procedure provided in the Bombay Land Revenue Code 1879 as if the amount payable by the surety were an arrear of land revenue. The facts giving rise to the petition are undisputed and may be briefly stated as follows.
(2.) One Hasmukhlal was carrying on business in the name of Messrs Hasmukhlal & Company at Ahmedabad and on 24th September 1952 a sum of Rs. 6 945 nP. was payable by him to the State in respect of arrears of tax and penalty under the provisions of the Bombay Sales Tax Act 1953 On the request of Hasmukhlal the Sales Tax Recovery Mamlatdar who was taking steps to recover the said amount from Hasmukhlal granted instalments of Rs. 100/per month to Hasmukhlal and in consideration of this facility for payment by instalments being given to Hasmukhlal the petitioner executed a surety bond stipulating that if Hasmukhlal committed default in payment of any three monthly instalments the petitioner would pay to the State the full amount due and payable by Hasmukhlal and if the petitioner failed to do so the State would be entitled to auction the house of the petitioner described in the surety bond and to appropriate the sale proceeds in or towards payment of the said amount. It appears that Hasmukhlal committed default in payment of more than three instalments and the entire amount accordingly became due and payable by Hasmukhlal to the State. The Sales Tax Recovery Mamlatdar thereupon issued a notice dated 4th March 1963 to Hasmukhlal calling upon him to show cause why legal steps should not be taken against him for recovering the amount due and payable by him to the State. Since there was no response to this notice the Sales Tax Recovery Mamlatdar addressed another notice to Hasmukhlal on 20th June 1963 intimating to him that it was decided to recover the amount due and payable by him summarily and to take coercive action for recovery of the said amount against Hasmukhlal and the petitioner. A copy of this notice was sent by the Sales Tax Recovery Mamlatdar to the petitioner. Since the Sales Tax Recovery Mamlatdar threatened to recover the amount under the surety bond from the petitioner as an arrear of land revenue by employing the coercive machinery of the Bombay Land Revenue Code 1879 the petitioner filed the present petition against the Sales Tax Officer and the Sales Tax Recovery Mamlatdar as respondents challenging the right of the State to recover the amount due under the surety bond as an arrear of land revenue. On the petition being admitted a rule was issued and in opposition to the rule an affidavit sworn by the second respondent was filed on behalf of the respondents. In the affidavit the respondents asserted their right to proceed to recover the amount due from the petitioner as if it were an arrear of land revenue and made it clear that they proposed to recover the said amount by adopting the coercive machinery provided in the Bombay Land Revenue Code 1879.
(3.) Before we proceed to deal with the question of law arising on the petition we may point out that the petitioner also alleged in the petition that the surety bond was not binding on him by reason of nonfulfilment of certain conditions which according to him were agreed upon between the parties as conditions precedent to the attachment of liability under the surety bond but these allegations were disputed on behalf of the respondents and since they raised disputed questions of fact Mr. G. M. Vidyarthi learned advocate appearing on behalf of the petitioner frankly stated before us that it would not be possible for him to press the contention based on these allegations in a petition invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution. The only question which was therefore debated before us by Mr. G. M. Vidyarthi on behalf of the petitioner was whether the State was entitled to adopt the coercive machinery of the Bombay Land Revenue Code 1879 for the purpose of recovering the amount due under the surety bond from the petitioner. Mr. G. M. Vidyarthi contended that there was no provision of law under which the amount due from the petitioner under the surety bond was recoverable as an arrear of land revenue and unless there was some such provision the State was not entitled to proceed to recover the said amount from the petitioner by taking resort to the provisions of the Bombay Land Revenue Code 1879 This contention was combated by Mr. B. R. Sompura learned Assistant Government Pleader appearing on behalf of the revenue. He of course agreed and indeed he could not do otherwise that unless there is some provision of law which authorizes the State to recover an amount due from a debtor as an arrear of land revenue the State cannot resort to the coercive machinery provided in the Bombay Land Revenue Code 1879 for recovering such amount from the debtor. But he said such provision was to be found in section 38(5) of the Bombay Sales Tax Act 1959 or at any rate in the third clause of section 187 of the Bombay Land Revenue Code 1879 Let us examine these provisions.;