1969 (6) TMI 40 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Competence of the Deputy Commercial Tax Officer to levy penalty.
2. Timing of the initiation of penalty proceedings.
3. Authority of the successor-assessing authority to initiate penalty proceedings.

Issue-wise Detailed Analysis:

1. Competence of the Deputy Commercial Tax Officer to levy penalty:
The primary issue was whether the Deputy Commercial Tax Officer was competent to levy a penalty when the original assessment was made by the Commercial Tax Officer. The court noted that the Deputy Commercial Tax Officer, as defined in the Act, was an "assessing authority" authorized and empowered to make assessments by the State Government. The court concluded that the Deputy Commercial Tax Officer was competent to levy the penalty since the matter was within his jurisdiction both on pecuniary and territorial bases. The court emphasized that the legality of the levy could not be assailed on the ground that the Deputy Commercial Tax Officer was not the same authority that made the original assessment.

2. Timing of the initiation of penalty proceedings:
The court addressed whether the penalty proceedings must be initiated simultaneously with or in continuation of the original assessment order. The court referred to Section 14(2) of the Act, which provides the assessing authority the power to levy a penalty in addition to the tax assessed. The court held that Section 14(2) is an enabling provision that does not specify a time limit for initiating penalty proceedings. It was observed that the initiation of penalty proceedings need not be simultaneous with the original assessment. The court cited previous judgments to support the view that the levy of penalty does not automatically follow upon assessment and that a reasonable opportunity must be given to the dealer to explain the omission. The court concluded that the initiation of penalty proceedings after the appellate order was valid.

3. Authority of the successor-assessing authority to initiate penalty proceedings:
The court examined whether the successor-assessing authority, in this case, the Deputy Commercial Tax Officer, was authorized to initiate penalty proceedings. It was noted that the term "assessing authority" in Section 14(2) does not imply the same person who made the original assessment. The court held that if the jurisdiction is conferred on another authority due to transfer or other reasons, such authority is competent to take up the case from that stage to its final stage. The court rejected the argument that the person who imposes the penalty should be the same as the person who made the assessment order. The court concluded that the Deputy Commercial Tax Officer, who revised the assessment order, was competent to initiate penalty proceedings.

Conclusion:
The court set aside the order of the Tribunal, holding that the Deputy Commercial Tax Officer was competent to initiate penalty proceedings even though he was not the original assessing authority. The petition was allowed with no order as to costs, and an advocate's fee of Rs. 100 was awarded.