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Banwari Lal Om Prakash Vs. Commissioner of Sales Tax - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberS.T.R. No. 924 of 1978
Judge
Reported in[1980]45STC284(All)
AppellantBanwari Lal Om Prakash
RespondentCommissioner of Sales Tax
Appellant AdvocateBharatji Agarwal, Adv.
Respondent AdvocateStanding Counsel
DispositionPetition allowed
Excerpt:
- - if the assessing authority is satisfied that any dealer, (b) has concealed the particulars of his turnover or deliberately furnished inaccurate particulars of such turnover; it may fail to prove or may not be able to furnish the certificates either because they could not be received or were lost or received beyond time. but all these do not render the disclosure of return 'deliberately furnishing inaccurate particulars'.it is, therefore, unsafe to penalise the assessee for inaccuracies in net turnover. ). it was held that penalty for incomplete or incorrect return can be imposed only in case of best judgment assessment......11 of the u.p. sales tax act against the imposition of penalty under section 15-a(1)(b) for furnishing inaccurate particulars in the fourth quarterly return. it is not disputed that gross turnover disclosed was correct. but from the account books it appeared that the amount of sales tax was rs. 1,47,773.98, but the assessee deposited, along with the return, only rs. 91,224.00. in appeal, the explanation of the assessee that no tax was realised on purchases on own account was accepted. such purchases were to the tune of rs. 8,35,900 and tax on it came to rs. 41,395. even after granting allowance for this amount, the assessee was found not to have deposited rs. 15,154.95. for this, it was explained that they were also purchases on own account and the assessee was not liable to pay.....
Judgment:

R.M. Sahai, J.

1. This revision has been filed under Section 11 of the U.P. Sales Tax Act against the imposition of penalty under Section 15-A(1)(b) for furnishing inaccurate particulars in the fourth quarterly return. It is not disputed that gross turnover disclosed was correct. But from the account books it appeared that the amount of sales tax was Rs. 1,47,773.98, but the assessee deposited, along with the return, only Rs. 91,224.00. In appeal, the explanation of the assessee that no tax was realised on purchases on own account was accepted. Such purchases were to the tune of Rs. 8,35,900 and tax on it came to Rs. 41,395. Even after granting allowance for this amount, the assessee was found not to have deposited Rs. 15,154.95. For this, it was explained that they were also purchases on own account and the assessee was not liable to pay tax on it. It was stated that as the assessee was awaiting certificates from purchasers it did not deposit the tax. The appellate authority accepted the explanation yet only sliced the penalty to half. In revision, the imposition of penalty was upheld as the assessee having realised tax it had no justification to retain it.

2. The revising authority completely misdirected itself as it did not appreciate the scope of penal provision contained in Section 15-A. The retention of tax, even if realised illegally, is not penal. The circumstance that the assessee had realised tax and not deposited it shoud not have weighed in deciding the offence of deliberately furnishing inaccurate particulars. Section 15-A(1)(b), during the relevant period 1971-72, read as under:

If the assessing authority is satisfied that any dealer,

(b) has concealed the particulars of his turnover or deliberately furnished inaccurate particulars of such turnover; or

(c) ... he may direct that such dealer shall pay, by way of penalty...in the cases referred to in Clause (b)....

3. The primary question is whether 'deliberate furnishing of inaccurate particulars of such turnover' extends both to gross and net turnover or it is confined to gross turnover only. According to the learned standing counsel, turnover means turnover as defined in Sub-section (i) of Section 2 and also the turnover determined under Rule 44. He relied on form IV and Rule 41 in support of his submission. He maintained that a dealer furnishing inaccurate particulars of net turnover was as much liable to be penalised as a dealer furnishing inaccurate particulars of his gross turnover. The learned counsel submitted that by a deliberate act the dealer evaded tax in one and postponed payment of tax in the other. Both actions were penal and there was no reason to distinguish between gross and net turnover for purposes of this Sub-section. The argument is no doubt attractive but does not appear to be sound. The word 'turnover' has been defined in the Act. It has to be understood in the same sense. It determines the liability under the Act. The net turnover is calculated for purposes of payability only. The assessee may claim exemption or applicability of lower rate of tax or may claim concession on furnishing certain certificates. It may fail to prove or may not be able to furnish the certificates either because they could not be received or were lost or received beyond time. But all these do not render the disclosure of return 'deliberately furnishing inaccurate particulars'. It is, therefore, unsafe to penalise the assessee for inaccuracies in net turnover.

4. It is further doubtful if mistaken claim of deduction can be equated with deliberate furnishing of inaccurate particulars. On the finding that the assessee was expecting certificates from dealers and therefore did not deposit the tax the disclosure of particulars in the return could not be said to be deliberate so as to attract penalty.

5. The learned counsel for the assessee has placed reliance on State of Madras v. S.G. Jayaraj Nadar & Sons [1971] 28 S.T.C. 700 (S.C.). It was held that penalty for incomplete or incorrect return can be imposed only in case of best judgment assessment. It is true that the provisions of the Madras Sales Tax Act were not analogous to Section 15-A of the U.P. Act but the principle is none the less salutary that if the account books have been accepted it obviously means that the return which is filed on the basis of the account books contains correct particulars. In any case, it would be difficult in such cases to hold that particulars of turnover were concealed or deliberately inaccurate return was filed. The words 'concealment' and 'deliberate' used in the sub-section restrict imposition of penalty to limited cases only.

6. In the result, this revision succeeds and is allowed. The question of law raised by the assessee is decided by saying that no penalty can be levied for inaccuracy only. The assessee shall be entitled to its costs which is assessed at Rs. 300. The fee of the standing counsel is assessed at Rs. 100.


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