1970 (2) TMI 90 - HC - VAT and Sales Tax

Summary

Issues:
1. Imposition of penalty under the Central Sales Tax Act for late filing of return and non-payment of assessed tax.
2. Constitutionality of section 9 of the Central Sales Tax Act in relation to State subjects.
3. Interpretation of section 9 and incorporation of provisions of general sales tax laws of different States into the Central Act.

Analysis:
1. The petitioner, a registered dealer under the Central Sales Tax Act, was issued notices for penalties for late filing of return and non-payment of assessed tax. The petitioner argued that there is no provision in the Central Sales Tax Act for such penalties. However, the Court held that under section 9(3) of the Act, sales tax authorities could impose penalties on dealers for not filing returns or paying assessed tax. The Court found that the authorities could impose penalties as per section 11 of the Bengal Finance (Sales Tax) Act, which empowered them to penalize non-compliance. Therefore, the Court concluded that the imposition of penalties was valid under the law.

2. The petitioner contended that section 9 of the Central Sales Tax Act was ultra vires entry 92A and entry 93 of List I of the Constitution of India, as it encroached upon State subjects. However, the Court disagreed, stating that the Act aimed to regulate inter-State trade and commerce, falling under entry 92A and 93 of List I. The Court clarified that section 9 allowed for the levy and collection of taxes and penalties under the Central Sales Tax Act, without infringing on State subjects. It concluded that the Act did not constitute indirect legislation on State subjects, as alleged by the petitioner.

3. The Court addressed the incorporation of provisions of general sales tax laws of different States into the Central Sales Tax Act through section 9. It noted that the Central Government had adopted a recognized mode of interpretation by referencing the State laws, effectively integrating them into the Central Act. The Court compared this method to incorporating sections of an earlier Act into a later Act, treating them as if they were originally enacted in the later Act. The Court emphasized that this approach reduced redundancy and streamlined the legislation without overstepping into State subjects. Therefore, the Court dismissed the petitioner's arguments regarding the incorporation of State laws into the Central Act.

In conclusion, the Court discharged the Rule, allowing the authorities to proceed with the penalties and tax collection as per the notice issued under section 9 read with section 11(4B) of the Bengal Finance (Sales Tax) Act.