1985 (12) TMI 352 - HC - VAT and Sales Tax

Summary

Issues:
- Competency of assessing authority to increase penalty amount
- Whether the applicant furnished false returns in respect of sales turnover to Railways
- Legality and justification of penalty imposed on the applicant

Competency of Assessing Authority to Increase Penalty Amount:
The applicant, a dealer under the M.P. General Sales Tax Act, was assessed for sales tax on turnover for a specific period. The assessing authority rejected the applicant's claim for a concessional tax rate on sales to Railways and P & T Department, levying tax at the full rate and imposing a penalty. The Deputy Commissioner affirmed the tax levy but remanded the penalty decision. Subsequently, the assessing authority increased the penalty amount, leading to further appeals and reductions in the penalty. The applicant sought clarification on the authority's competence to raise the penalty amount, but the Board dismissed the application, stating the issue was not raised during the appeal process.

Furnishing False Returns in Respect of Sales Turnover to Railways:
The applicant contended that the turnover of sales to Railways did not attract a concessional tax rate during the relevant period, questioning the imposition of a penalty for allegedly furnishing false returns. The appellate authorities had varying opinions on the matter, with the Tribunal reducing the penalty amount. The applicant sought a review of this decision, arguing that the issue of false returns was a question of law. The High Court partially allowed the application, directing the Board of Revenue to refer the question of whether the applicant furnished false returns and the legality of the penalty imposed to the Court for consideration.

Legality and Justification of Penalty Imposed:
The case involved disputes over the imposition of penalties on the applicant for sales to Railways and P & T Department. The assessing authority and subsequent appellate bodies differed in their assessments of whether the applicant knowingly furnished false returns, leading to penalties. The Tribunal reduced the penalty amount, prompting the applicant to seek clarity on the legality and justification of the penalties imposed. The High Court's decision to partially allow the application indicates a need for further examination of the penalty imposition and the alleged false returns concerning sales turnover to Railways.