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Commissioner of Sales Tax Vs. Bombay Commercial Traders - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberS.T.R. No. 144 of 1976
Judge
Reported in(1978)7CTR(Bom)363
ActsCentral Sales Tax Act, 1956 - Sections 9(2), 9(3), 9(2A), 10 and 10A; Bombay Sales Tax Act, 1959 - Sections 36(3) and 61(1); Central Sales Tax (Amendment) Act, 1976 - Sections 6
AppellantCommissioner of Sales Tax
RespondentBombay Commercial Traders
Excerpt:
- - (2a) is as follows :(2a) all the provisions relating to offence and penalties (including provision relating to penalties in like a prosecution for an offence or a addition to the penalties or ment for an offence but excluding the provisions relating to make provided for in ss......central act for imposition of penalty for deals default in payment of tax and the provisions in a state sales tax and the provisions in a state sales tax act is penalty for non-payment of tax within the prescribed time was not attracted a impose penalty on dealers under the central act in respect of tax payable under the central act. in view, if this judgment of the supreme court, the question referred to us would have to be answer by us in the affirmative. however, the position has completely changed by view of a recent legislative enactment, name the central sales tax (amendment) an 1976 (no. 103 of 1976), which received the assent of the president on september 7, 1976 by s. 6 of the amending act new sub-section, namely, sub-s. (2), inserted in s. 9 of the central act. the said sub-s......
Judgment:

Madon, J.

1. This is a Reference under S. 9(2) of the Central Sales Tax Act, 1956, read with S. 61(1) of the Bombay Sales Tax Act, 1959. The question submitted to us for our determination in this Reference is as follows :

'Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the provisions of s. 36(3) of the Bombay Sales Tax Act, 1959, could not be imported in the assessments under the Central Sales Tax Act, 1956, to levy penalty for late payment of central sales tax and that such penalty was without the authority of law ?'

2. The brief facts necessary to be related for the purpose of this Reference are that the respondents were registered as dealer under the Central Sales Tax Act, 1956 (hereinafter referred to and 'the Central Act'). In respect of the assessment period April 1, 1965 to March 31, 1966 the respondents were assessed to tax under the Central Act by the Sales Tax Officer, A Ward, Unit IV, Bombay, on February 18, 1969. The Sales Tax Officer also imposed upon the respondents a penalty in the sum of Rs. 1,190.60p. for delay in payment of tax under the Central Act for the quarter ended September 30, 1965 and for non-payment of tax for the quarter ended December 31, 1965, which amounts were shown as payable in the returns filed by the respondents. The Sales Tax officer imposed this penalty purporting to do so under S. 9(3) of the Central Act, as it then stood, read with S. 36(3) of the Bombay Sales Tax Act, 1959 (hereinafter referred to as 'the Bombay Act'). Against this order imposing penalty the respondents filed an appeal to the Assistant Commissioner of Sales Tax. One of the contentions of the respondents was that no such penalty could be imposed upon them under the Central Act and the provisions of the Bombay Act relating to imposition of penalty for late payment or non-payment of tax could not be invoked for the imposition of a penalty under the central Act. The Assistant Commissioner Sales Tax negatived this and other contentions and dismissal the respondent appeal. Against this order of dismissal the respondents filed a second appeal to the Tribunal. The Tribunal, following in earlier decision, allowed the appeal and in aside the penalty imposed upon the respondents.

3. From this judgment and order of the Tribunal this Reference has been made at the instance of the Commissioner of Sales Tax.

4. A similar question fell it consideration before the Supreme Court is Khemka & Co. (Agencies) Pvt. Ltd., vs. State of Maharashtra and State of Mysore vs. Guldas Narasappa Thimmaiah Oil Mills, By a majority judgment the Supreme Court that there was no provision in the central Act for imposition of penalty for deals default in payment of tax and the provisions in a State Sales Tax and the provisions in a State Sales Tax Act is penalty for non-payment of tax within the prescribed time was not attracted a impose penalty on dealers under the Central Act in respect of tax payable under the Central Act. In view, if this judgment of the Supreme Court, the question referred to us would have to be answer by us in the affirmative. However, the position has completely changed by view of a recent legislative enactment, name the Central Sales Tax (Amendment) An 1976 (No. 103 of 1976), which received the assent of the President on September 7, 1976 By S. 6 of the Amending Act new sub-section, namely, sub-S. (2), inserted in S. 9 of the Central Act. The said sub-S. (2A) is as follows :

'(2A) All the provisions relating to offence and penalties (including provision relating to penalties in like a prosecution for an offence or a addition to the penalties or ment for an offence but excluding the provisions relating to make provided for in Ss. 10 and 10A) of the general sales tax law of each Stats shall, with necessary modifications, apply in relation to the assessment, reassessment, collection and the enforcement of payment of and tax required to be collected under this Act in such State or in relation to any process connected with such assessment, reassessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law.'

S. 9 of the Amending Act is a validating section and makes the provisions of sub-S. (2A) of S. 9 inserted by the Amending Act to operate with retrospective effect. It also validates the imposition and collection of penalties levied before the commencement of the amending Act which were invalid by reason of the aforesaid decision of the Supreme Court. In view of the provisions of S. 9 of the Amending Act, it must be held that the imposition of penalty upon the Respondents by the Sales Tax Officer for late payment and non-payment of the tax under the Central Act was valid.

5. We accordingly answer the question submitted to us in negative.

6. There will be no order as to costs of this Reference.


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