Distraint proceedings, a condition for criminal prosecution
MADURAI: Municipalities cannot institute criminal proceedings for non payment of property tax without taking any efforts to seize and sell movable properties of tax defaulters, the Madras High Court has ruled.
Dismissing three criminal appeals filed by the Commissioner of Rajapalayam Municipality in Virudhunagar district, Justice G.M. Akbar Ali said criminal prosecution could be launched only if the distraint of movable properties was unfeasible.
The judge pointed out that Rule 30(2) of the Tamil Nadu District Municipalities Rules states that the authorities concerned might prosecute tax defaulters if any distraint or sufficient distraint of the defaulters’ properties was impracticable.
A careful reading of the Section would make it clear that the officials cannot prosecute defaulters by merely recording their statement that distraint proceedings were not feasible without actually taking steps to bring the movable properties for sale, he added.
To commence distraint proceedings, it was necessary that a bill under Rule 29 should be served on persons from whom the amount was due.
Such a bill should contain statements of the period of tax arrears and description of the property taxed.
A notice of liability incurred in default of payment of such due should also be served on the defaulters.
If the amount was not paid within 15 days from the service of such notice, it could be recovered under a warrant of distraint, the judge said.
These procedures were a condition precedent for launching criminal prosecution.
The criminal law could be set in motion only after the efforts of a Muncipality to recover the tax arrears go in vain, Mr. Justice Ali clarified.
The present appeals were filed by the Municipality Commissioner against the refusal of a Judicial Magistrate at Rajapalayam to initiate criminal action against two individuals and a textile mill for not paying tax arrears of Rs.5,94,677.
The Magistrate had initially taken the three complaints filed by the Municipality on file and also summoned the defaulters.
The cases were dismissed only after examining the defaulters under Section 313 of the Code of Criminal Procedure.