1980 (9) TMI 265 - HC - VAT and Sales Tax

Summary

Issues:
1. Imposition of penalty under section 17(3) of the M.P. General Sales Tax Act, 1958.
2. Jurisdiction of the Tribunal to consider the constitutional validity of penalty imposition under the amended provision.

Analysis:
1. The case involved a reference under section 44 of the M.P. General Sales Tax Act, 1958, regarding the imposition of penalty under section 17(3) of the Act. The questions raised were whether the penalty imposition was legal despite the retrospective amendment and whether the Tribunal could assess the constitutional validity of the penalty. The assessee, a dealer in automobiles, was penalized for non-compliance with tax requirements for the assessment year 1966-67. The Board confirmed the penalty, leading to the reference to the High Court.

2. The counsel for the assessee argued that the penalty imposed under the amended section 17(3) was unconstitutional as it exceeded the penalty permissible under the law at the time of the offense. The amended provision was challenged as ultra vires the Constitution. The retrospective amendment made the penalty applicable even though it was not in force during the offense period. The Court examined the relevant provisions of the Act, including the retrospective effect of the amendment and the limitations on penalty imposition under the original Act.

3. The Court held that the Board was correct in its decision as it lacked jurisdiction to question the constitutionality of the Act's provisions. The retrospective operation of section 17(3) validated the penalty imposition, making it legal and proper. The Court cited a previous Division Bench decision supporting this interpretation. Therefore, the Court answered the questions in the affirmative, favoring the department. Each party was directed to bear its own costs related to the reference.

4. In conclusion, the High Court upheld the legality of the penalty imposed under section 17(3) of the M.P. General Sales Tax Act, 1958, despite the retrospective amendment. The Court emphasized the lack of jurisdiction to challenge the Act's provisions and affirmed the Board's decision regarding the penalty imposition. The reference was answered affirmatively in favor of the department, settling the dispute over the penalty imposition on the assessee.