1987 (1) TMI 462 - HC - VAT and Sales Tax

Summary

Issues:
Imposition of penalty under section 43(1) of the M.P. General Sales Tax Act, 1958 when no returns were filed by the dealer.

Detailed Analysis:

1. Background:
The case involves a reference under section 44(1) of the M.P. General Sales Tax Act, 1958, where the Board of Revenue referred a question of law to the High Court regarding the imposition of a penalty under section 43(1) of the Act in a situation where no returns were filed by the dealer.

2. Facts of the Case:
The assessee, dealing in various goods, was assessed to tax for the year 1968-69. The assessment was based on best judgment as the assessee had only submitted returns for the first and second quarters, not for the third and fourth quarters. A penalty was imposed for delay in tax payment for the latter quarters. The assessee contended that failure to submit returns did not amount to concealment, thus challenging the penalty under section 43(1) of the Act.

3. Tribunal's Decision:
The Appellate Assistant Commissioner dismissed the appeal and imposed a penalty under section 43(1) after the assessee's objection was overruled. The Tribunal upheld the penalty, leading the assessee to seek reference to the High Court on various legal questions, but only the issue of penalty imposition without filed returns was referred.

4. Legal Analysis:
The key question before the High Court was whether it is legally permissible to impose a penalty under section 43(1) of the Act when no return for the relevant period has been filed by the dealer. The section allows for penalty if the dealer conceals turnover or furnishes inaccurate particulars. The term "conceal" was not defined in the Act, but previous case law established that the absence of filed returns does not preclude the imposition of a penalty under section 43(1).

5. Precedent and Decision:
In Babulal Agarwal v. Commissioner of Sales Tax, M.P., it was held that the failure to file a return does not bar the imposition of a penalty under section 43(1) of the Act. The High Court, in line with this precedent, concluded that the Tribunal did not err in holding that a penalty is imposable even in the absence of filed returns for the relevant period.

6. Conclusion:
The High Court answered the reference in the affirmative, affirming the imposition of the penalty under section 43(1) of the Act despite the non-filing of returns by the dealer. Each party was directed to bear their own costs in this reference.