1970 (4) TMI 143 - HC - VAT and Sales Tax

Summary

Issues:
1. Violation of principles of natural justice in imposing penalty without specifying the period.
2. Lack of finding on false representation by the petitioner.
3. Legality of penalty exceeding 11 times the tax payable.
4. Interpretation of penalty under section 10A(1) in case of false representation.
5. Examination of goods covered by the certificate of registration.
6. Exemption of gasoline from Central sales tax.
7. Constitutionality of section 10A(1) under article 14 of the Constitution.

Detailed Analysis:
1. The petitioner challenged the penalty imposed without specifying the relevant period, contending a violation of natural justice. The Court agreed, noting the discrepancy between the period in the notice and the penalty period. The order was quashed, directing re-examination by the Sales Tax Officer after providing the petitioner an opportunity to be heard.

2. The petitioner argued that there was no finding of false representation by the dealer. The Court highlighted the necessity of establishing mens rea for the offense under section 10(b) and emphasized the lack of a finding on false representation in the Sales Tax Officer's order. The Court directed a re-examination by the assessing officer to address this issue.

3. The legality of the penalty exceeding 11 times the tax payable was raised. The Court examined the provisions of section 10A(1) and emphasized the requirement of establishing an offense under section 10(b) before imposing a penalty. The Court directed a thorough examination by the Sales Tax Officer to determine the applicability of the penalty.

4. The interpretation of the penalty under section 10A(1) concerning false representation was discussed. The Court clarified that the penalty would apply when goods not covered by the registration certificate were purchased based on false representation. The Court rejected the contention that the penalty should be limited to the concessional rate, emphasizing the need for establishing the offense under section 10(b).

5. The Court directed a detailed examination by the Sales Tax Officer to determine if the purchased goods were covered by the certificate of registration. The petitioner's argument regarding the exemption of gasoline from Central sales tax during the relevant period was also noted for further examination.

6. The constitutionality of section 10A(1) under article 14 of the Constitution was briefly mentioned, with the petitioner's argument left open for future consideration. The Court did not express a view on this matter.

In conclusion, the Court allowed the application, quashed the impugned order, and directed the Sales Tax Officer to re-examine the matter in accordance with the law and the Court's observations. No costs were awarded in the circumstances.