1973 (6) TMI 53 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of Section 13(2) of the Mysore Sales Tax Act, 1957 regarding the imposition of penalty on defaulting assessee without a specific order being passed by the Commercial Tax Officer.

Analysis:
The judgment dealt with a batch of 14 writ petitions arising under the Mysore Sales Tax Act, 1957, focusing on the question of whether the imposition of a penalty on defaulting assessee under section 13(2) of the Act requires a specific order by the Commercial Tax Officer. The petitioners, who were dealers under the Act, had not paid the taxes demanded within the specified time, leading to them becoming defaulters. The Commercial Tax Officer sent letters to the petitioners demanding the penalty amounts under section 13(2) and warning of coercive recovery measures. The petitioners then filed writ petitions seeking relief under Article 226 of the Constitution. The main contention raised was that the Commercial Tax Officer did not pass any order imposing the penalty or grant an opportunity to the petitioners to be heard before demanding the penalty amounts.

The argument put forth by the petitioners' counsel was that although the Act does not expressly require the Commercial Tax Officer to pass an order imposing the penalty, it should be inferred that such an order is necessary, and the defaulting assessee should be heard as per the rules of natural justice. The counsel cited the decision of the Supreme Court in Hindustan Steel Limited v. The State of Orissa, emphasizing the discretionary nature of imposing penalties for statutory violations. The Supreme Court's decision highlighted the importance of judicial discretion in penalty imposition and the necessity for a quasi-criminal proceeding before imposing penalties.

The court analyzed the provisions of section 13(2) of the Act, which mandates the payment of penalties by defaulting assessees without granting any discretion to authorities to waive or reduce the penalty. The court emphasized that the obligation to pay the penalty is on the defaulting assessee as per the statutory provisions, and no purpose would be served by affording the opportunity to be heard. The judgment further referenced a previous decision of the court in Sha Jayantilal v. Additional Commercial Tax Officer, which clarified that the focus should be on the fact of default rather than the reason behind it.

Ultimately, the court dismissed the writ petitions, stating that when recovery proceedings are initiated against defaulting assessees, they can challenge the default or the amount of penalty claimed. The Recovery Officer has the authority to decide on the validity of the penalty and the claimed amount, thereby rejecting the contentions raised by the petitioners' counsel. The judgment concluded by dismissing the petitions with costs and permitting the High Court Government Advocate to file necessary documents within a specified timeframe.