V.P. Gopalan Nambiyar, C.J.
1. These writ appeals raise an interesting point regarding the validity of penalty proceedings taken by the Intelligence Officer against the assessee under Section 45A of the Kerala General Sales Tax Act, 1963. That section reads:
45A. Imposition of penalty by officers and authorities. -- (1) If the assessing authority or the Appellate Assistant Commissioner is satisfied that any person, --
(a) being a person required to register himself as a dealer under this Act, did not get himself registered; or
(b) has failed to keep true and complete accounts; or
(c) has failed to submit any return as required by the provisions of this Act or the Rules made thereunder; or
(d) has submitted an untrue or incorrect return; or
(e) has failed to comply with all or any of the terms of any notice or summons issued to him by or under the provisions of this Act or the Rules made thereunder; or
(f) after purchasing any goods in respect of which he has made a declaration under the proviso to Sub-section (3) of Section 5, has failed to make use of the goods for the declared purpose; or
(g) has acted in contravention of any of the provisions of this Act or any rule made thereunder, for the contravention of which no express provision for payment of penalty or for punishment is made by this Act,
such authority or officer may direct that such person shall pay, by way of penalty, an amount not exceeding twice the amount of sales tax or other amount evaded or sought to be evaded where it is practicable to quantify the evasion or an amount not exceeding five thousand rupees in any other case.
Explanation. -- The burden of proving that any person is not liable to the penalty under this section shall be on such person.
(2) No order under Sub-section (1) shall be passed unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter.
(3) The Deputy Commissioner may, on application by any person on whom a penalty is imposed under Sub-section (1) within thirty days from the date of receipt by him of the order imposing such penalty, for reasons to be recorded in writing, confirm, reduce or waive such penalty or remand the case to the assessing authority or Appellate Assistant Commissioner, as the case may be, for reconsideration:
Provided that the Deputy Commissioner may admit an application made after the expiry of the said period of thirty days if he is satisfied that the applicant had sufficient cause for not making the application within the said period.
(4) An order of the Deputy Commissioner under Sub-section (3) shall, subject to the provisions of Sub-section (5), be final.
(5) The Board of Revenue may, either suo motu or on application, call for and examine the record of any order passed under Sub-section (1) or Subsection (3) and make such order as it thinks fit:
Provided that the Board of Revenue shall not admit an application made after the expiry of thirty days from the date of receipt by the applicant of the order under Sub-section (1) or Sub-section (3), as the case may be, unless it is satisfied that the applicant had sufficient cause for not making the application within the said period:
Provided further that no order enhancing a penalty or cancelling the waiver of a penalty shall be passed unless the person affected thereby is given an opportunity of being heard in the matter.
(6) An order of the Board of Revenue under Sub-section (5) shall be final.
The above section was introduced by Ordinance No. 12 of 1975 Kerala General Sales Tax (Second Amendment) Ordinance, 1975 with effect from 27th October, 1975, and was replaced by Amendment Act No. 12 of 1976 Kerala General Sales Tax (Second Amendment) Act, 1976.
2. The nature of the controversy agitated in these appeals may be understood with respect to the facts in W.A. No. 252 of 1978, which may be taken as representative of the facts presented for consideration in the other appeals also.
W.A. No. 252 of 1978.
3. The assessee-respondent sought to quash exhibits P1 to P3 notices and exhibits P6 and P7 orders. The assessee is a partnership firm engaged in the business of running a hotel. There was a surprise inspection of his premises by the Intelligence Officer on 8th August, 1975. Certain incriminating records were seized and exhibits P2 and P3 notices dated 17th February, 1976, were issued to show cause why a penalty should not be imposed on the assessee. The grounds proposed for imposition of penalty were: (1) Failure to maintain true and complete accounts and (2) submission of untrue and incorrect return. These notices had been preceded by exhibit P1 notice dated 12th August, 1975, directing the assessee to produce certain accounts before the assessing authority. After considering the assessee's explanation (exhibits P4 and P5), by exhibits P6 and P7 orders dated 28th February, 1976, the proposal regarding the imposition of penalty was implemented for the years 1973-74 and 1974-75.
4. The contention of the assessee was that Section 45A of the General Sales Tax Act which authorises imposition of penalty was unavailable in respect of the assessment years in question, and the grounds proposed by the impugned notices would not justify the action and, therefore, the imposition of the penalty was unsustainable in law. The learned Judge allowed the writ petition and quashed the notices and orders on two grounds. In the first place, the learned Judge was of the view that the power of imposing penalty under Section 45A could be exercised only in the course of the assessment. For this, the learned Judge derived assistance from Section 19(2) of the Act. Next, the learned Judge was also of the view that Section 45A of the Act, which came into effect only on 27th October, 1975, cannot be projected back so as to cover contravention of the assessee which had taken place and been completed prior to the introduction of the section.
5. Regarding the first of the grounds stated by the learned Judge, we are unable to agree that the imposition of a penalty can be done only in the course of assessment proceedings, as stated by the learned Judge. The learned Judge seems to have overlooked Section 45A, which we have already quoted. Section 19 of the Act provides for assessment of the escaped turnover. Clause (1) of Section 19 is the section which provides for an escaped assessment; and Clause (2) of the section enacts:
19. (2) In making an assessment under Sub-section (1), the assessing authority may, if it is satisfied that the escape from assessment is due to wilful non-disclosure of assessable turnover by the dealer, direct the dealer to pay, in addition to the tax assessed under Sub-section (1), a penalty as provided in Section 45A:
Provided that no such penalty shall be imposed unless the dealer affected has had a reasonable opportunity of showing cause against such imposition.
Explanation. -- Notwithstanding anything contained in the Indian Evidence Act, 1872, the burden of proving that the escape from assessment was not due to wilful non-disclosure of assessable turnover by the dealer shall be on the dealer.
6. This is only an enabling power which allows the assessing authority even while making a reassessment of an escaped assessment to resort to the provisions of Section 45A and impose a penalty. That would afford no justification for linking Section 19(2) with Section 45A, and holding that the latter section has no independent existence and can be resorted to only in the course of the assessment proceedings. A reading of Section 45A is sufficient to show that it is a separate and independent Section and that irrespective of whether the assessment has been completed or not, it is open to the requisite authority to take action under the said section provided the conditions for action are satisfied. We, therefore, cannot support the first of the grounds given by the learned Judge.
7. However, the second ground stated by the learned Judge appears to be strong and sound and I we are in agreement with it. The section was introduced only with effect from 27th October, 1975. The two grounds of action in respect of which penalty was sought to be imposed against the assessee are contraventions which took place in the course of the assessment years themselves, namely, in the course of 1973-74 and 1974-75. We have already referred to the two contraventions, viz., failure to maintain true and complete accounts, and submission of untrue and incorrect return. These are regulated and governed by Rule 10(2), Rule 11, Rule 12(b) and Rule 12(2) of the General Sales Tax Rules. Both from the nature of the statutory provision and from the provisions of these rules, we are satisfied that the contraventions were complete in the course of the assessment years with which we are concerned, viz., 1973-74 and 1974-75, i. e., before Section 45A came into force. But the learned Advocate-General raised an interesting point. It was argued that for the purpose of Section 45A what was material was not the contravention by the assessee, but the satisfaction by the officer; and that there has been such a satisfaction only subsequent to the commencement of Section 45A. The argument was that although factually the contravention had taken place prior to the commencement of Section 45A, if the requisite satisfaction dawned on the officer only subsequent to the commencement of the section, that would suffice to attract penalty proceedings. Support was sought to be derived for the submission by the following passage from the decision of the Supreme Court in the Jain Brothers case  77 I.T.R. 107 (S.C.). Considering the provisions of Section 297(f) and (g) of the Income-tax Act, 1961, the Supreme Court observed:
It is well-settled that in fiscal enactments the legislature has a larger discretion in the matter of classification so long as there is no departure from the rule that persons included in a class are not singled out for special treatment, It is not possible to say that while applying the penalty provisions contained in the Act of 1961 to cases of persons whose assessments are completed after 1st April, 1962, any class has been singled out for special treatment. It is obvious that for the imposition of penalty it is not the assessment year or the date of the filing of the return which is important but it is the satisfaction of the income-tax authorities that a default has been committed by the assessee which would attract the provisions relating to penalty. Whatever the stage at which the satisfaction is reached, the scheme of Sections 274(1) and 275 of the Act of 1961 is that the order imposing penalty must be made after the completion of the assessment. The crucial date, therefore, for purposes of penalty, is the date of such completion.
8. The sections with which the Supreme Court was concerned in the above case are materially different in their wording and content from what we are concerned with in this case. Section 45A requires for the imposition of penalty, a contravention by the assessee on which is to be superimposed a satisfaction by the officer. One, without the other, cannot attract liability for a penalty. The satisfaction itself is regarding a contravention, which, in this case, had taken place before the commencement of the section. We are fortified in taking this view by the fact that the contravention in these cases are contraventions in regard to which a criminal liability is attracted under Section 46 of the Act. That should make it particularly necessary that the contraventions are not viewed in the light of a provision which was not in force at the time of their commission. For these reasons, we are of the opinion that the view taken by the learned Judge that Section 45A of the Act had no application to the case is correct and calls for no interference.
9. The learned Judge had expressed the view that the term 'assessing authority', in Section 45A of the Act would not include an Intelligence Officer but only the regular assessing authorities contemplated by the Sales Tax Act. The learned Advocate-General invited our attention to the definition of 'assessing authority' under Section 2(iv) of the Sales Tax Act, as meaning any person authorised by the Government or by any authority empowered to make an assessment. Our attention was invited to the notification printed at page 302 of Sugathan's book on the Law of Sales Tax, where S.R. 0. No. 335/63 issued by the Government is seen printed. The schedule to that S.R.O. has been omitted. It was pointed out by the learned Advocate-General that the notification empowers the Intelligence Officer to function as assessing authority within the meaning of the Sales Tax Act. In the view that we have taken that Section 45A has no application to the facts, we do not propose to express ourselves on this question.
10. For the reason stated, we dismiss the appeal with no order as to costs.
W.A. Nos. 253, 268 and 277 of 1978 and 106 of 1979.
11. We need not detail the facts of these writ appeals. They are practically identical 'and the question raised is also the same as what we have considered and dealt with in W.A. No. 252 of 1978. The only difference on facts is that in W.A. No. 253 of 1978 the ground for action against the assessee was failure to get itself registered as a dealer for the assessment year 1971-72. This would not make any difference to the principle of our reasoning in W.A. No. 252 of 1978. We may only mention that the provision to take out a registration is made in Rule 5(2) of the General Sales Tax Rules. No independent arguments were advanced in these appeals.
12. Following our ruling in W.A. No. 252 of 1978, we dismiss these appeals with no order as to costs.
Issue carbon copies of this judgment to the counsel.