1979 (10) TMI 197 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of penalty provision under section 27(2) of the M.P. General Sales Tax Act, 1958 regarding non-issuance of bills by a dealer.

Detailed Analysis:
The case involved a reference under section 44 of the M.P. General Sales Tax Act, 1958, regarding the interpretation of the penalty provision under section 27(2) of the Act. The question referred to the High Court was whether the maximum penalty of Rs. 50 prescribed in section 27(2) is applicable in relation to each bill or cash memorandum for which there was a contravention of section 27(1), or if it applies to all bills or cash memoranda with contraventions during one accounting period. The facts of the case revealed that the assessee, a dealer in cutlery, hosiery, and fancy goods, was penalized for non-issuance of bills during a specific period. The penalty imposed was reduced to Rs. 50 by the Board of Revenue based on their interpretation of the penalty provision.

The relevant provision, section 27 of the Act, mandates dealers with turnovers exceeding a specified amount to issue bills or cash memoranda for each sale exceeding a certain value and maintain records of such transactions. Sub-section (2) of section 27 provides for penalties in case of contravention of the issuance requirement. The Commissioner is authorized to impose a penalty not exceeding double the amount of the bill or cash memorandum or Rs. 50, whichever is less, for each contravention. The Court emphasized that each instance of non-issuance constitutes a distinct offense, and the penalty can be imposed for each default separately, up to the prescribed limit.

The Court held that the penalty prescribed in section 27(2) applies to each bill or cash memorandum for which there was a contravention of section 27(1). Therefore, the penalty can be imposed separately for each instance of non-compliance during an accounting period, subject to the maximum limit specified. The judgment clarified that the Board of Revenue erred in interpreting the penalty provision to limit the total penalty to Rs. 50 for all instances combined. Consequently, the Court answered the reference in the affirmative, affirming that the penalty limit applies to each contravention individually.

In conclusion, the High Court's judgment clarified the application of the penalty provision under section 27(2) of the M.P. General Sales Tax Act, emphasizing that the penalty for non-issuance of bills should be imposed separately for each instance of contravention, subject to the prescribed maximum limit. The decision provided clarity on the interpretation of the penalty provision and upheld the principle that each default constitutes a distinct offense warranting separate penalties.