1964 (4) TMI 106 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of levy of penalty under section 13(5) of the Orissa Sales Tax Act.
2. Jurisdiction of the Certificate Officer in certificate proceedings.
3. Impact of setting aside the original assessment order on the levy of penalty.
4. Comparison with a similar provision in the Indian Income-tax Act.

Analysis:
1. The petitioner challenged the order of the Member, Board of Revenue, which upheld the levy of penalty by the Sales Tax Authorities under section 13(5) of the Orissa Sales Tax Act. The penalty was imposed for failure to pay the assessed amount within the prescribed time. The petitioner argued that since the original assessment order was set aside on appeal, the levy of penalty should also be deemed void. However, the court noted that at the time of the penalty levy, there was a valid assessment order against the petitioner. The court highlighted that the law did not provide for automatic cancellation of penalty if the original assessment order was annulled at a later stage.

2. The Certificate Officer rejected the petitioner's objection to the continuation of the certificate proceeding, stating that the issue should have been raised before the Sales Tax Authorities in appeal or revision. Both the Collector and the Member, Board of Revenue upheld this view. The court emphasized that the petitioner had opportunities to challenge the penalty levy through provisions like seeking a stay on penalty or filing a revision petition, which were not utilized.

3. The court referred to a decision of the Kerala High Court regarding a similar provision in the Indian Income-tax Act, where it was held that the validity of penalty should be assessed based on the circumstances at the time of the penalty levy, not on subsequent events like setting aside the original assessment order. The court found this decision contrary to the petitioner's argument and concluded that the levy of penalty was not void in this case.

4. Ultimately, the court held that the Certificate Authority was correct in determining that the penalty levy was valid. The application was dismissed with costs, and a hearing fee was assessed. The judgment was agreed upon by both judges. The petition was dismissed based on the analysis and conclusions drawn from the legal provisions and precedents cited during the proceedings.