1990 (1) TMI 272 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of penalty under section 36(3) of the Bombay Sales Tax Act and Central Sales Tax Act for non-payment of tax.
2. Justification for levy of penalty without issue of notice from the department.
3. Reasonable cause for remission of penalty prior to the amendment of the Central Sales Tax Act in 1976.
4. Liability for penalty for delay in payment of tax for a specific month.
5. Application of section 36(3) when no return is filed as required by law.

Analysis:

1. The primary issue in this judgment was the interpretation of penalty under section 36(3) of the Bombay Sales Tax Act and the Central Sales Tax Act for non-payment of tax. The Court considered whether the Tribunal was justified in holding that no penalty was legally imposable on the respondent dealer for non-payment of tax for the first two months of relevant quarters under both Acts.

2. Another issue raised was the justification for the levy of penalty without the issuance of a notice from the department as required under section 38(4) of the Bombay Sales Tax Act. The Court examined whether the Tribunal was correct in upholding the penalty under section 36(3) for non-payment of tax without the issuance of the necessary notice in form No. 26.

3. The Court also deliberated on whether the absence of a provision for penalty under the Central Sales Tax Act before the 1976 amendment could constitute a reasonable cause for remission of penalty under section 36(3). This issue aimed to determine if the circumstances prior to the amendment could be considered a reasonable cause for not imposing the penalty.

4. Regarding the liability for penalty for delay in payment of tax for a specific month, the Court addressed a specific question related to the delay in payment of tax for April 1976. The applicant was penalized for the delay, and the Court had to assess the correctness of this penalty imposition.

5. Lastly, the application of section 36(3) when no return is filed as required by law was discussed. The Court referred to a previous judgment to establish that the provisions of section 36(3) are not applicable when the assessee fails to file a return as mandated by law. Therefore, in the case where no return was filed for April 1976, the penalty under section 36(3) was not applicable.

In conclusion, the Court answered the questions raised by the State and the assessee, ruling in favor of the assessee for the issues related to penalty imposition under section 36(3) and the absence of a filed return. The judgment provided clarity on the interpretation and application of relevant tax laws in the context of penalty imposition and justified remission.