1967 (10) TMI 54 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the authority to grant payment of tax in instalments by the Government.
2. Validity of penalty imposition by the Commercial Tax Officer.
3. Constitutionality of section 13 of the Sales Tax Act.
4. Validity of Form VI prescribing a fixed period for tax payment.

Analysis:

The judgment by the Mysore High Court involved a case where a registered dealer under the Mysore Sales Tax Act, 1957, challenged the imposition of penalties by the Commercial Tax Officer. The petitioner had requested to pay the assessed sales tax in instalments, which was approved by the Government. The main contention was whether the petitioner defaulted in payment and thus liable for penalties.

The Court analyzed the authority granted to the Government to allow payment in instalments under section 3A of the Sales Tax Act. It was held that once the Government allowed instalments, the time for payment was extended, and any default was linked to non-payment of the instalments when due. The Court emphasized that the petitioner only became a defaulter if any instalment was not paid on time, as per the Government's directive.

Regarding the imposition of penalties, the Court ruled that the Commercial Tax Officer could not demand penalties under section 13 of the Sales Tax Act once the Government had allowed instalments. The extension of time for payment negated the concept of default, and since the petitioner paid all instalments promptly, no default existed. Therefore, the Court set aside the penalty demands and ordered refunds if already paid.

Furthermore, the Court briefly addressed the constitutionality of section 13, which was challenged on grounds of treating dealers unevenly. However, this issue was not extensively discussed as the case was primarily resolved on the basis of the interpretation of the authority to grant instalments and the subsequent penalty imposition.

Additionally, the Court touched upon the validity of Form VI, which prescribed a fixed period for tax payment, potentially limiting the Commercial Tax Officer's discretion. This issue was not delved into deeply as the case was primarily decided on the installment payment aspect.

In conclusion, the Court allowed the writ petitions, set aside the penalty demands, and directed the refund of any penalties already paid. The petitioner was awarded costs, and the judgment favored the petitioner based on the interpretation of the installment payment authorization by the Government and the absence of any defaults in payment.