1991 (4) TMI 399 - HC - VAT and Sales Tax

Summary

Issues:
1. Tribunal's refusal to refer a question of law to the High Court
2. Imposition and removal of penalty under section 36(3)(a) of the Bombay Sales Tax Act, 1959

Issue 1: Tribunal's refusal to refer a question of law to the High Court
The Gujarat Sales Tax Tribunal remanded a matter to the Deputy Commissioner based on its judgment, which led to the removal of a penalty imposed under section 36(3)(a) of the Bombay Sales Tax Act, 1959. The State of Gujarat filed an application under section 69 of the Gujarat Sales Tax Act for a reference to the High Court, but the Tribunal refused, citing reasonable cause for not paying the disputed amount in time. Subsequently, the State filed Sales Tax Application No. 2 of 1980 before the High Court, which directed the Tribunal to refer a question of law. The Tribunal raised the question of whether it was justified in setting aside the penalty without assigning a reason and instead of keeping the matter open for further consideration.

Issue 2: Imposition and removal of penalty under section 36(3)(a) of the Bombay Sales Tax Act, 1959
The opponent had made inter-State sales of optical goods with "C" forms obtained from buyers. The Sales Tax Officer disallowed the concessional tax rate, leading to an appeal and revision by the Assistant Commissioner and Deputy Commissioner, respectively. The Deputy Commissioner set aside the Assistant Commissioner's order, imposed a penalty, and revised the tax rate. The opponent then appealed to the Tribunal, arguing that the "C" forms were obtained from genuine dealers, and the cancellation of registration certificates was not properly considered. The Tribunal found the "C" forms genuine but remanded the matter to ascertain further facts, leading to the removal of the penalty. The High Court upheld the Tribunal's decision, stating that there was a reasonable cause for non-payment of tax, justifying the removal of the penalty.

In conclusion, the High Court upheld the Tribunal's decision to remove the penalty, finding that there was a reasonable cause for non-payment of tax. The judgment highlights the Tribunal's revisional jurisdiction and its authority to set aside penalties based on reasonable causes, ultimately ruling in favor of the opponent-assessee against the department.