1970 (12) TMI 85 - HC - VAT and Sales Tax

Summary

Issues:
- Imposition of penalty under section 10-A of the Central Sales Tax Act without prior permission of the Commissioner of Sales Tax, U.P.
- Interpretation of the newly enacted provision in place of the original section 9 of the Central Sales Tax Act.
- Applicability of the U.P. Sales Tax Act provisions to the Central Sales Tax Act.
- Jurisdiction of the assessing authority to impose penalties under the Central Sales Tax Act.

Analysis:
The judgment of the Allahabad High Court, delivered by Justice Pathak, pertains to a reference made by the Commissioner of Sales Tax regarding the imposition of a penalty on M/s. Janta Furniture Mart for failure to install a diesel engine and a saw machine within a year. The penalty was imposed under section 10-A(1) by reference to the offence in section 10(d) of the Central Sales Tax Act. The Assistant Commissioner (Judicial) allowed the appeal on grounds of lack of opportunity to show cause against the penalty and absence of prior sanction from the Commissioner of Sales Tax. The Additional Revising Authority affirmed the need for prior permission but disagreed on the lack of opportunity to show cause. The reference was made to resolve the issue.

The judgment delves into the applicability of the U.P. Sales Tax Act provisions to the Central Sales Tax Act. It highlights the amendment brought by the Central Sales Tax (Amendment) Act, 1969, which replaced the original section 9 of the Central Sales Tax Act. The newly enacted provision empowers authorities to assess, collect, and enforce payment of tax and penalties under the Central Sales Tax Act as if they were under the State Sales Tax Act. This provision outlines the authority's powers and limitations in imposing penalties, emphasizing alignment with the State Sales Tax Act provisions.

The judgment further analyzes the jurisdiction of the assessing authority to impose penalties under the Central Sales Tax Act. It references section 15-A(5) of the U.P. Sales Tax Act, which mandates obtaining prior approval from the Commissioner of Sales Tax before imposing a penalty. The court concludes that failure to fulfill this condition renders the penalty proceedings without jurisdiction. A case precedent is distinguished to support this interpretation, emphasizing the non-substantive nature of the provision in question.

In conclusion, the High Court answers the reference in favor of the assessee, holding that the penalty imposition without prior permission from the Commissioner of Sales Tax is invalid. The assessee is awarded costs, and the reference is answered accordingly.