Shri Kishan Mal Lodha, J.
1. By order dated December 22, 1976, this Court directed the Board of Revenue for Rajasthan, Ajmer ('the Board' here in) to draw a statement of the case and refer the following question for its opinion:
Whether, in the facts and circumstances of the case, the Board of Revenue was justified in holding that the words 'tax determined' as appearing in Section 16(1)(c) of the Rajasthan Sales Tax Act, 1954 as it then stood, meant 'the amount of tax that remained to be recovered ?
The dealer assessee, in respect of the assessment year 1961-62, was assessed to tax under the provisions of the Rajasthan Sales Tax Act, 1954 (No. XXIX of 1954) (for short 'the Act') by the Assistant Commercial Taxes Officer, 'A' Ward, Jodhpur (ACTO) on April 28, 1965. The total tax assessed was Rs. 12,343.72. The dealer-assessee had already deposited, prior to assessment order, an amount of Rs. 10,000/- as tax. The 'tax due' was Rs. 2343.72. The ACTO imposed penalty under Section 16(1)(c) of the Act amounting to Rs. 6171/-. The reasons for imposing penalty were that dealer-assessee did not file any return in the year 1960-61 and consequently best judgment assessment was made and that the dealer-assessee is in the habit of using the tax amount in business and he also constructed a residential house and instead of depositing the amount in the Government treasury, he used that in the construction of the house. The explanation of the dealer-assessee was not accepted. The returns were not filed within time limit, without showing any reasonable cause for not doing so. The returns were filed on March 27, 1965 and that too without depositing the full amount of tax according to the returns. An appeal was filed. The Deputy Commissioner (Appeals), Commercial Taxes, Udaipur, by his order dated December 30, 1966, discarded the explanation given by the dealer-assessee. He, however, reduced the penalty from Rs. 6171/- to Rs. 4100/-. The material observations made by the Deputy Commissioner (Appeals), are as follows:
Taking this fact into consideration and also that out of the tax assessed amounting to Rs. 12,328/- the assessee had deposited Rs. 10,000/- in advance though late and also other facts and circumstances of the case, I feel the ends of justice would amply be met if a penalty of Rs. 4,100/- were imposed for the above default.
The assessee went in revision. The single Member of the Board was of the opinion that the penalty was leviable under Section 16(1)(c) of the Act. He, maintained the order of the Deputy Commissioner (Appeals) but maintained the penalty of Rs. 4,100/- and declined to make further reduction in the penalty. A special appeal was filed under Section 14(4A) of the Act. The Division Bench of the Board reduced the penalty of Rs. 4,100/- to Rs. 1,170/-under Section 16(1)(c) of the Act. The reason given by the Division Bench may usefully be excerpted below:
According to the judgment of the assessee had collected sales tax amounting to Rs. 12,295.80 from his customers for the year 1961-62 against which he paid to Rs. 10,000/- in March, 1965. Thus, Rs. 2,295.80 recovered sales tax remained in possession of the assessee which ought to have been remitted to the Government Treasury. Moreover the assessing authority finally determined a tax of Rs. 2,343.72 for the assessment year in question. He could impose at least 50 per cent of this amount by way of penalty under Section 16(1)(c) of the R.S.T. Act.
An application under Section 15(1) of the Act was filed by the ACTO. That application was not disposed of within 120 days from the date of the filing of the application. As such application under Section 15(3A) was filed before this Court. This Court directed the Board to refer the aforesaid question.
2. This reference was pending when the Rajasthan Sales Tax (Amendment) Act, 1984 (No. XX of 1984) (for short 'the Amendment Act') came into force on May 1, 1985. According to Section 13(11) of the Amendment Act this reference has to be treated as revision under Section 15 of the Act as substituted by the Amendment Act. We accordingly dispose of this reference treating it as revision.
3. We have heard Mr. K.C. Bhandari for the ACTO. No body has appeared on behalf of the assessee.
4. The following facts may usefully be noticed regarding which, there cannot be any dispute. During the relevant assessment year, the ACTO by his order dated April 28, 1965, determined the tax at Rs. 12,343.72. The assessee had not filed the quarterly return along with the tax due as per return. Consolidated return was filed on March 2.8, 1965 for the relevant accounting year in question and deposited Rs. 10,000/- in the treasury.
5. After the rejection of the explanation, the ACTO imposed penalty of Rs. 6,171. The Deputy Commissioner (Appeals) reduced the penalty. The learned single Member of the Board maintained that reduction of penalty. The Division Bench reduced the penalty to Rs. 1,170/-. In view of the finding recorded by the Division Bench of the Board, which has already been extracted here in above, the question for our consideration is whether the Board was right in construing the words 'tax determined' as appearing in Section 16(1)(c) of the Act, as it than stood, to mean the amount of tax that remained to be recovered.
6. In the relevant accounting year 1961-62, Section 16(1)(c) of the Act, read as under:
16(1)(c). Has without reasonable cause failed to furnish within the time allowed the prescribed return or statistics or other information required to be furnished by or under the Act; or
Section 7 of the Act provides for submission of returns. Material part of Section 7, as it stood then, read as under:
7(1). Every dealer liable to pay tax shall furnish returns of his turnover for the prescribed period in the prescribed form, in the prescribed manner and within the prescribed time, to such authority as may be prescribed.
(2) Every such return shall be accompanied by a Treasury receipt or receipt of any bank authorised to receive money on behalf of the State Government, showing the deposit of the full amount of tax due on the basis of return in the State Government Treasury or bank concerned.
. . . .
According to it, a return of turnover is, to be filed by a dealer liable to pay tax and that return is to be accompanied by treasury receipt evidencing that the full amount of tax due, has been deposited on the basis of the retnrn in the State Government treasury or bank concerned, as the case may be. It may, however, be noted that the discretion has been given to the Assessing Authority to extend the time for the submission of such returns by the dealer-assessee after the prescribed time but not exceeding fifteen days in the aggregate. So Section 7 deals with the filing of the return within the prescribed time and depositing of the tax due on the basis of the return. Section 10 deals with assessment and it lays down the procedure for passing the assessment order.
7. The next important provision is Section 11, of the Act which provides for payment and recovery of tax. Material part of Section 11, for the present purpose, is as under:
11(1) The tax shall be payable by a dealer on the basis of the assessments.
(2) The tax paid by a dealer shall be adjusted against the tax determined as a result of the assessment under Section 10 and the balance of the amount shall be payable by such dealer in such manner and in such instalments as the assessing authority may direct,(3) ... ... ...
A perusal of Section 11 shows that a dealer renders himself liable to pay tax on the basis of its determination by the assessment order. The tax becomes payable by the dealer-assessee in accordance with Section 11(1) in pursuance of the amount determined in the assessment order. Sub-section (2) of Section 11 shows that the tax which has already been paid by the dealer-assessee shall be adjusted against the amount of tax determined and the balance of the amount that remains after adjustment, will be payable by the dealer-assessee and for that a notice of demand is to be issued against the dealer-assessee specifying the date on which he has to pay and if no date is specified then, within thirty days from the date of service of notice. The scheme of Sections 7, 10 and 11 clearly shows that the dealer-assessee is required to file the return within the time prescribed or extended time under Section 7 (1) and also to deposit the tax on the basis of the amount shown in the return, that the assessment order is required to be passed determining the tax and when tax has been determined on account of the assessment having been made under Section 10, adjustment of the amount, which is paid under Section 7 (2) of the Act is to be made and thereafter a notice is issued to the assessee for making payment. A perusal of Sub-section (2) of Section 11 clearly shows that the tax is determined as a result of the assessment made under Section 10.
8. Now, let us refer to Section 16 which deals with imposition of penalty. Section 16(1)(c) provides that if any person has without reasonable cause failed to furnish the return of his turnover, or failed to furnish it within the time allowed, then, the dealer-assessee renders himself liable to penalty and disregard of the provisions of Section 7(1), has been made punishable under Section 16 (1)(c). According to Section 16(1)(c), the dealer-assessee is required to pay penalty in addition to the tax payable by him, and that the amount of penalty is not to exceed half the amount of tax determined. The words 'tax determined' refer to the amount of tax which has been assessed by the Assesaing Authority while passing the assessment order under Section 10 of the Act, whereas the tax payable is the amount that is found payable after the adjustment of the amount that has already, been paid by the assessee and for which a notice Under Section 11(2) of the Act is issued. In view of the expressions 'tax determined' and 'payable' used in Section 11(2) of the Act, in the context of Section 10, which provides for passing of the assessment order, we are of considered opinion that the view taken by the Division Bench of the Board is against the express provisions of Section 16(1)(c) for the provision, 'tax determined' refers to the amount of tax as assessed by the Assessing Authority at the time of passing of the assessment order under Section 10 of the Act and not the amount that remains payable after adjustment of the amount deposited at the time of filing of the return tinder Section 7(2) of the Act or prior to the passing of the assessment order. In this case, the tax determined by the Assessing Authority was Rs. 12,343.72 whereas the tax payable on adjustment, was Rs. 2,343.70. So under Section 16(1)(c) the penalty imposable on the dealer-assessee, in addition to Rs. 2,343.72 is on the amount of tax determined, i.e., Rs. 12,343.72. According to Section 16(1)(c), the penalty is not to exceed 1/2 of the amount of the tax determined, i.e., Rs. 12,343.72. It is in the discretion of the Assessing Authority, or for that matter of the Appellate Authority or revi-sional authority, to impose a reasonable amount of penalty having regard to the facts and circumstances of each case subject to a maximum of half the amount of the tax determined which in this case is Rs. 12,343.72.
9. In the case on hand, the Division Bench of the Board, reduced the penalty of Rs. 1170/- on the ground that the Assessing Authority had finally determined the tax at Rs. 2343.72. We have already held that the tax determined in this case is Rs. 12, 343.72 under Section 10 of the Act and the tax payable after necessary adjustment was Rs. 2343.72. In these circumstances, the order passed by the Division Bench of the Board reducing the penalty to Rs. 1170/-under Section 16(1)(c) of the Act, cannot be sustained.
10. The further question that arises is as to what amount of penalty should be imposed on the assessee in view of the interpreeation that we have put on the words 'tax determined' as appearing in Section 16(1)(c) of the Act. We are seized of the case in revision. The single Member of the Board taking amount of Rs. 12,343.72 as the amount of tax determined, maintained the reduction of penalty to Rs.4100/-made by the Deputy Commissioner (Appeals), though the ACTO had imposed the penalty of Rs. 6171/-. We consider it proper that the case should go back to the Sales Tax Tribunal, Ajmer for passing fresh order in respect of the amount of penalty under Section 16(1)(c) of the Act, in the light of the interpretation put by us on Section 16(1)(c) of the Act regarding the expression 'tax determined' used therein. The Sales Tax Tribunal shall pass fresh order for imposing penalty on the assessee having regard to the facts and circumstances of the case.
11. The result is that this reference, which has been treated as revision is allowed to the extent indicated here in above. As no body has appeared on behalf of the dealer-assessee, there will be no order as to costs.