M.R. Sharma, J.
1. The petitioner is registered as a dealer under the Punjab General Sales Tax Act, 1948 (hereinafter referred to as 'the Act'), and is engaged in the business of running an oil mill. For this purpose the petitioner purchases groundnut which it uses in its mill for the production of oil.
2. For the assessment year 1967-68, the petitioner filed returns for the first two quarters but did not deposit the advance tax as laid down in Section 10(4) of the Act. For the third quarter, the petitioner also filed the return and deposited advance tax in the sum of Rs. 48,000 on the assumption that the purchase tax leviable was to the extent of 2 per cent of the price of the groundnuts purchased. However, on 26th October, 1967, the purchase tax had been enhanced from 2 per cent to 3 per cent. In this manner there was a short fall in the deposit of advance tax made by the petitioner. The Assessing Authority served a notice on the petitioner, calling upon him to show cause why penalty be not imposed on it for not making the advance deposit of tax in accordance with law and the rate of tax prescribed from time to time. After hearing the petitioner, the Assessing Authority imposed a penalty of Rs. 25,000 on the petitioner. The petitioner went up in appeal before the Deputy Excise and Taxation Commissioner, Patiala Division, Patiala. It was urged on behalf of the petitioner that as laid down in Hansraj Choudhri v. J. S. Rajyana, Excise and Taxation Officer (Enforcement) [1967J 19 STC 489, groundnut was not an oil-seed and in any event since the stage of levy had not been prescribed in the Act, no purchase tax was payable by it. The last argument was raised on the basis of a decision of the Supreme Court reported as Bhavani Cotton Mills Ltd. v. State of Punjab  20 STC 290 (SC). This argument did not prevail with the appellate authority, inter alia, on the ground that the law had been amended with retrospective effect. The order passed by the Assessing Authority, whereby a penalty of Rs. 25,000 had been imposed on the petitioner, was affirmed in appeal. The petitioner went up in further appeal before the Sales Tax Tribunal, Punjab, who after hearing the parties reduced the penalty imposed to a sum of Rs. 15,000 only. On an application made by the petitioner, the learned Tribunal has referred the following three questions of law for our opinion :
(1) Whether on the facts and circumstances of the case penalty can be imposed for the first and second quarters ?
(2) Whether a consolidated penalty can be imposed for all the four quarters in the manner done by the Assessing Authority ?
(3) Whether penalty can be imposed under law prior to the assessment and without service of notice under Section 11(7)(a)
3. After hearing the learned counsel for the parties, we are of the view that question No. (1) deserves to be answered in favour of the petitioner. It is settled law that a penalty can be imposed on a dealer or a party only if it is guilty of some contumacious disregard of law. Where at the relevant time the item purchased by the petitioner was not exigible to purchase tax and the liability to pay this tax arose only after the law had been amended with retrospective effect, it cannot be said that the petitioner had contumaciously disregarded the provision of law and had become liable to pay penalty under the Act. We need not dilate any further on this point because the matter stands concluded against the revenue by a Division Bench judgment of this Court reported as Goyal Oil Mills v. State of Punjab 1971 RLR 613. Therein it was observed as under:
9. In my opinion this contention is also without any force. If the assessee was as a matter of fact not liable to this tax at the relevant time, it would, according to me, be a sufficient cause for him not to deposit that tax. It would be immaterial if instead of saying that he was not liable to pay the said tax, he merely stated that the levy of that tax was in dispute and this Court had stayed the assessment and recovery of that tax in a number of cases.
10. It may be mentioned that this very view was taken in three Bench decisions of this Court in Punjab Oil Mills v. State of Punjab decided by Mahajan, J., and myself on 16th April, 1967; Guru Nanak Oil Mills v, Punjab State decided by Mahajan and Tuli, JJ., on 1st December, 1970, and Bharat General Mills, Ludhiana v. State of Punjab decided by Mahajan and Tuli, JJ., on 3rd December, 1970. It may be stated that the learned counsel for the department submitted that the effect of Section 20 of Punjab Act 7 of 1967 had not been noticed in any of these rulings. It is, therefore, that this contention had to be considered in the present case.
4. For the reasons aforementioned, we answer the first question in favour of the petitioner and against the revenue. In view of the opinion expressed on question No. (1) it is not necessary for us to express any opinion on questions Nos. (2) and (3). The parties are left to bear their own costs.