1980 (12) TMI 179 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of limitation period under section 39(2) of the Madhya Pradesh General Sales Tax Act, 1958 for revising an order regarding the imposition of penalty under section 43(1) where assessing authority and appellate authority did not consider penalty imposition.

Analysis:
The case involved a reference under section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958, regarding the limitation period for revising an order related to the imposition of penalty under section 43(1) of the Act. The relevant assessment year was 1962-63, with the assessment order passed by the Sales Tax Officer on 7th June 1965. The Sales Tax Officer and the Additional Appellate Assistant Commissioner of Sales Tax did not initiate penalty proceedings under section 43. Subsequently, the Commissioner initiated suo motu revision under section 39(2) as no penalty action was taken, leading to the imposition of a penalty of Rs. 1,000 by the Additional Commissioner in 1969.

The Tribunal set aside the penalty imposition order on grounds of being barred by limitation. The crux of the issue revolved around whether the limitation period under section 39(2) should be counted from the assessment order or the appellate order. The Tribunal's view was that the limitation should be counted from the assessment order, considering the failure of the Sales Tax Officer to impose the penalty. However, the High Court highlighted that section 43 empowered the appellate authority to initiate penalty proceedings, and an appeal constituted "any proceedings" under section 43.

The High Court emphasized that the appellate authority's failure to impose a penalty while finding the dealer guilty of concealment of turnover was prejudicial to revenue interests, allowing for revision under section 39(2). Therefore, the Commissioner was deemed competent to revise the appellate authority's order, with a limitation period of three years from the date of the appellate order. By counting the limitation from the appellate order date, the revisional proceedings were held to be within the prescribed time limit. Consequently, the Court answered the reference question by stating that the limitation under section 39(2) had to be counted from the date of the appellate order. No costs were awarded in relation to the reference.