1989 (8) TMI 334 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of penalty under section 43(1) of the M.P. General Sales Tax Act, 1958 for an assessment period in 1961.

Detailed Analysis:

1. Background:
The case involves an application under section 44(1) of the M.P. General Sales Tax Act, 1958, where the Tribunal referred a question regarding the imposition of a penalty of Rs. 4,000 under section 43(1) of the Act for the assessment period of 1961.

2. Facts Leading to Penalty:
The applicant, a dealer in vegetable ghee, edible oil, soap, and oil cakes, was penalized for not including sales tax collected separately in the returns for the calendar year 1961.

3. Appellate Proceedings:
The penalty was upheld in the first appeal by the appellate authority, and subsequently, in the second appeal before the Tribunal, the penalty was maintained despite the assessee's argument that the legal position on including separately collected tax in returns was unclear in 1961.

4. Tribunal's Decision:
The Tribunal rejected the assessee's submission, upholding the penalty, citing an order dated 30th March, 1982, in Appeal No. 196-PBR-79.

5. Legal Position and Intent:
The High Court analyzed the legal provisions of section 43(1) as it existed in 1961, emphasizing the requirement of mens rea for penalty imposition. The Court noted that deliberate concealment or furnishing of false returns necessitated a guilty intention to deceive the department.

6. Court's Finding:
The Court opined that the assessee's failure to include sales tax in the returns was not indicative of a guilty intention to attract penalty under section 43(1) for the assessment year 1961.

7. Precedent and Conclusion:
Citing a similar case precedent, the Court concluded that the assessee did not have the intention to deceive the department and, therefore, was not liable for the penalty under section 43(1) for the year 1961. The Court ruled in favor of the assessee, answering the Tribunal's question in the negative.

8. Final Verdict:
The High Court held that the assessee was not liable for the penalty under section 43(1) of the Act for the assessment year 1961. The Tribunal's decision to impose the penalty was deemed unjustified, and the Court ruled in favor of the assessee, with no costs awarded.

9. Conclusion:
The reference was answered in the negative, absolving the assessee of the penalty under section 43(1) for the assessment period in 1961.