1982 (10) TMI 201 - HC - VAT and Sales Tax

Summary

Issues Involved
1. Applicability of Section 45(5) vs. Section 45(6) of the Gujarat Sales Tax Act, 1969 for imposing penalties.

Detailed Analysis

1. Applicability of Section 45(5) vs. Section 45(6) of the Gujarat Sales Tax Act, 1969 for Imposing Penalties

The core issue in the judgment was whether the penalty for the assessee's failure to pay the full amount of tax due should be imposed under Section 45(5) or Section 45(6) of the Gujarat Sales Tax Act, 1969. The assessee, a registered dealer, had filed four quarterly returns but failed to pay the full tax amount due, making only part-payments. The Sales Tax Officer imposed penalties under Section 45(5), which the assessee contested, arguing that any penalty should be under Section 45(6).

Section 45(5) and Section 45(6) Overview:

- Section 45(5): Imposes a penalty if a dealer, without reasonable cause, fails to pay tax within the required time. The penalty is calculated as:
- 1% of the tax amount per month for the first three months after the due date.
- 1.5% of the tax amount per month thereafter during the period of default.
- The Commissioner or an appellate authority may remit the whole or part of the penalty.

- Section 45(6): Applies when a dealer:
- Fails to pay the whole amount of tax as required by Section 47(2).
- Fails to pay the whole extra amount of tax as required by Section 47(3).
- When the tax assessed or reassessed exceeds the sum already paid by more than 20%.
- The penalty under this section is calculated similarly to Section 45(5).

Tribunal's Decision:

The Tribunal rejected the assessee's contention that the penalty should be under Section 45(6) and not Section 45(5). It relied on an unreported decision in Special Civil Application No. 1645 of 1972 (Hiranand Shyamdas v. Assistant Commissioner of Sales Tax), which concluded that Section 45(5) applies when part-payment of tax is made with the return, whereas Section 45(6) applies when there is a failure to pay the whole amount of tax.

Court's Analysis:

The Court affirmed the Tribunal's decision, stating that the issue was not res integra due to the binding precedent set by the Hiranand Shyamdas case. The Court noted that the provisions of Section 45(5) and Section 45(6) are in pari materia with Sections 36(3) and 36(3A) of the Bombay Sales Tax Act, 1959. The Hiranand Shyamdas case had clarified that Section 36(3) (analogous to Section 45(5)) applies to part-payment scenarios, while Section 36(3A) (analogous to Section 45(6)) applies to complete non-payment scenarios.

Stare Decisis Principle:

The Court emphasized the principle of stare decisis, indicating that the decision in Hiranand Shyamdas's case had been followed for nearly a decade. Changing this interpretation could invalidate numerous penalty assessments and cause undue hardship. The Court declined to refer the matter to a larger bench, reinforcing the need for legal consistency and stability.

Conclusion:

The Court concluded that the penalty in the present case was rightly imposed under Section 45(5) and not Section 45(6). The Tribunal's decision to remit the penalty from Rs. 62,395 to Rs. 40,000 was also upheld. The question referred to the Court was answered in the affirmative, favoring the revenue and against the assessee, with no order as to costs due to the special facts of the case.