1982 (12) TMI 161 - HC - VAT and Sales Tax

Summary

Issues:
Assessment of penalty for short deposit of purchase tax under Punjab General Sales Tax Act, 1948.

Detailed Analysis:
The case involved the assessment of a penalty on M/S Vardhman Spinning and General Mills Limited for the short deposit of purchase tax for the quarters ending 30th June, 1969, 30th September, 1969, 31st December, 1969, and 31st March, 1970. The petitioner contended that there was no mala fide intention in the short remittance and thus, no penalty should be imposed. However, the Assessing Authority imposed a penalty of Rs. 6,000 on the petitioner. The petitioner's appeal was rejected by the Deputy Excise and Taxation Commissioner and the Sales Tax Tribunal, leading to the reference of the question of law to the High Court.

The High Court considered the petitioner's argument that the penalty was imposed on irrelevant considerations and that sufficient cause was shown for the short deposit of purchase tax for the 3rd quarter of 1969. However, the Court disagreed with the submissions, citing the case of Hindustan Steel Ltd. v. State of Orissa, where it was held that the imposition of a penalty for failure to perform a statutory obligation is at the discretion of the authority. The Court noted the categorical admission of the assessee regarding the failure to deposit purchase tax for the 3rd quarter and deemed it as wilful default, justifying the penalty imposed. The Court also highlighted the error in filing quarterly returns corresponding to the calendar year instead of the financial year as unworthy of credit.

The Court further emphasized that the failure to submit revised returns as permissible under section 10(5) could not be ignored. It noted that the petitioner, a significant entity with an annual gross turnover running into several lakhs, failed to pay a substantial amount of tax, which was understandable given the seasonal nature of their business. The Court found that the Tribunal had considered all material facts and observations before imposing the penalty, thereby rejecting the appeal.

In conclusion, the High Court upheld the decision to impose the penalty, stating that no irrelevant consideration had influenced the Tribunal's decision. The Court rejected the petitioner's plea regarding the filing of quarterly returns and affirmed that the Tribunal was justified in negating the petitioner's claim of sufficient cause for the short deposit of purchase tax. The question posed for the Court's decision was answered against the assessee, with no order as to costs.

TEWATIA, J. concurred with the decision of the Court.