Skip to content


Commissioner of Sales Tax Vs. Laxmilal Jain - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 543 of 1971
Judge
Reported in1973MPLJ311; [1973]31STC494(MP)
AppellantCommissioner of Sales Tax
RespondentLaxmilal Jain
Appellant AdvocateJ.P. Bajpai, Deputy Adv.-General
Respondent AdvocateNone
Cases ReferredNathulal Chhotelal v. R. M. Pathak
Excerpt:
- - 500 and, upon his failure so to do, rejected the first appeal summarily on 29th april, 1963. 6. we are in agreement with the observations made by the learned judges constituting the said division bench presided over by dixit, c......sales tax act, 1958, as it stood prior to 15th april, 1968, the part payment demanded by the appellate authority is relatable to the gross tax and penalty or the net demand of tax and penalty after assessment.2. the said question of law arises on the following facts : the respondent was assessed to sales tax for the period from 2nd november, 1964, to 21st october, 1965. an amount of rs. 2,292.50 had been credited by the respondent as advance sales tax. as per the assessment order, dated 25th september, 1967, the respondent was assessed to a further sum of rs. 365.15. thus, the total assessment for the said period came to rs. 2,657.65 out of which an amount of rs. 2,292.50 had already been deposited as advance tax along with the quarterly return. the respondent, feeling aggrieved by.....
Judgment:

P.K. Tare, C.J.

1. This is a reference under Section 44 of the Madhya Pradesh General Sales Tax Act, 1958, for answering the following ques tion by this court:

Whether under the proviso to Section 38(3) of the M. P. General Sales Tax Act, 1958, as it stood prior to 15th April, 1968, the part payment demanded by the appellate authority is relatable to the gross tax and penalty or the net demand of tax and penalty after assessment.

2. The said question of law arises on the following facts : The respondent was assessed to sales tax for the period from 2nd November, 1964, to 21st October, 1965. An amount of Rs. 2,292.50 had been credited by the respondent as advance sales tax. As per the assessment order, dated 25th September, 1967, the respondent was assessed to a further sum of Rs. 365.15. Thus, the total assessment for the said period came to Rs. 2,657.65 out of which an amount of Rs. 2,292.50 had already been deposited as advance tax along with the quarterly return. The respondent, feeling aggrieved by this additional demand, preferred an appeal before the Appellate Assistant Commissioner of Sales Tax. He did not deposit the balance of Rs. 365.15, However, by a notice issued to the respondent it was called upon to deposit an amount of Rs. 250 by 31st January, 1968, as required by the proviso to Section 38(3) of the M. P. General Sales Tax Act, 1958. The respondent did not make that deposit and, therefore, under Rule 58(1) of the M. P. General Sales Tax Rules, 1959, the Appellate Assistant Commissioner of Sales Tax rejected the respondent's appeal summarily. On a further appeal filed by the respondent, the learned President of the Board of Revenue by the order in question (petitioner's annexure C) allowed the assessee's appeal holding that what the proviso to Section 38(3) of the M. P. General Sales Tax Act, 1958, contemplated was merely deposit of one-third of the amount of the total tax demanded and not the balance of the tax due. In that view, it was held that the deposit of advance tax made by the respondent with the return was sufficient compliance with the requirement of Section 38(3) of the M. P. General Sales Tax Act, 1958.

3. Section 38(3) of the M. P. General Sales Tax Act, 1958, was amended with effect from 15th April, 1968. Subsequent to the amendment, the Section specifically used the words 'balance due from the dealer under the order of assessment with penalty'. But these words were not there in the provision prior to the amendment dated 15th April, 1968. It may be relevant to reproduce the Section as it stands after the amendment and as it stood prior to the amendment.

Section 38(3) as it stands after the amendment: 'No first or second appeal against an order of assessment, with or without penalty or against an order imposing a penalty shall be admitted by the appellate authority unless the tax with penalty, if any, or the penalty, as the case may be, in respect of which the appeal has been preferred, has been paid :

Provided that the said authority may, if it deems fit, for reasons to be recorded in writing, entertain an appeal against an order of assessment with or without penalty or an order imposing penalty on payment of such smaller amount, as it may direct, which shall not be less than one-third of the total balance due from the dealer under the order of assessment with penalty, if any, or the order imposing the penalty, as the case may be. Section 38(3) as it stood before the amendment: 'No first or second appeal against an order of assessment, with or without penalty, or against an order imposing a penalty shall be admitted by the appellate authority unless the tax with penalty, if any, or the penalty, as the case may be, in respect of which the appeal has been preferred, has been paid:Provided that the said authority may, if it deems fit, for reasons to be recorded in writing, entertain an appeal against such order on payment of such smaller amount which shall not be less than one-third of the amount of the tax with penalty, if any, or of the penalty, as the case may be, as it may direct.

4. The clear implication of the Section is that the entire amount of tax assessed or the penalty imposed has to be deposited by the assessee if he wants his appeal to be entertained by an appellate authority. If he does not do that then he has to approach the appellate authority which has the discretion to relax the condition and require him to deposit not less than one-third of the assessed tax or penalty, which is the subject-matter of the appeal. The clear implication is that the entire amount of assessed tax and penalty has to be in the first instance deposited by the assessee in order to persuade the appellate authority to entertain his appeal and the appellate authority has been given the discretion to relax the condition to reduce the amount of the balance due up to two-third, thereby requiring the assessee to deposit at least one-third of the disputed amount which is the subject-matter of the appeal. In our opinion, the amendment of the section as per the amendment dated 15th April, 1968, is merely by way of a further clarification and essentially, there is no difference between the section as it stood prior to the amendment and as it now stands subsequent to the amendment.

5. In this connection, we might advert to the observations of a Division Bench of this Court in Nathulal Chhotelal v. R. M. Pathak, Appellate Assistant Commissioner of Sales Tax, Raipur Misc. Petition No. 435 of 1964 decided on 19th February, 1965, wherein the learned Judges constituting the Division Bench observed as follows:

It is plain from Sub-section (3) of Section 38 of the Act that the assessee has to pay the tax (or such smaller amount which shall not be less than one-third thereof as the appellate authority may in its discretion permit) in respect of which he prefers a first or second appeal before it can be admitted. If he fails to make such payment, the appeal is liable to be rejected summarily under Rule 58. It is also obvious that, unless the whole (of the) amount of tax is paid, such payment has to be made for each of the two successive appeals in independent proceedings and that any payment made for either cannot be treated as a payment made for the other appeal also. Further, the Deputy Commissioner, who had already admitted the second appeal upon payment of a part of the tax due, namely, Rs. 845, directed by his final order that the first appeal should be admitted upon payment of a reasonable amount out of the tax found due. It was implicit in this order that the first appellate authority had to additionally require the assessee to deposit a reasonable amount of tax before admitting the first appeal. It was for this reason that that authority directed the petitioner to deposit Rs. 500 and, upon his failure so to do, rejected the first appeal summarily on 29th April, 1963.

6. We are in agreement with the observations made by the learned Judges constituting the said Division Bench presided over by Dixit, C.J. and K.L. Pandey, J.

7. In this view of the matter, we answer the reference by stating that under the proviso to Section 38(3) of the M. P. General Sales Tax Act, 1958, as it stood prior to 15th April, 1968, the part payment demanded by the appellate authority was relatable, not to the gross tax and penalty, but the net demand of tax and penalty remaining due after assessment. Let the reference be returned to the Board of Revenue for further action as may be necessary in view of the answer to the said question. There shall be no order as to costs of this reference as the respondent did not even care to appear in this court.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //