1991 (7) TMI 352 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Penalty under Section 45(6) of the Gujarat Sales Tax Act, 1969.
2. Penalty under Section 45(1) of the Gujarat Sales Tax Act, 1969.

Issue-wise Detailed Analysis:

1. Penalty under Section 45(6) of the Gujarat Sales Tax Act, 1969:
The Sales Tax Officer found a breach of the declaration in form 19, leading to the imposition of a purchase tax and a penalty of Rs. 64,500 under section 45(5). The Assistant Commissioner of Sales Tax removed the penalty under section 45(5) but found that the tax paid was less than 80% of the assessed tax, invoking section 45(6) and proposing a penalty of Rs. 27,263.10. The dealer's representative consented to this penalty. The Tribunal later reduced the penalty to Rs. 9,100, reasoning that the consent was on the legal aspect only, not on facts. The Court disagreed, stating that the consent given by the representative was comprehensive, covering both legal and factual aspects. The Tribunal's reasoning was deemed "halting" and "based on facts non-existing." The Court concluded that the Tribunal could not exercise jurisdiction when the consent covered factual aspects as well. Therefore, the Tribunal's reduction of the penalty was overturned, and the original penalty was reinstated.

2. Penalty under Section 45(1) of the Gujarat Sales Tax Act, 1969:
The Tribunal reduced the penalty from Rs. 7,500 to Rs. 1,500, considering the increase in branch transfers. The dealer argued for complete waiver, citing the case of Hemchandbhai & Co. v. State of Gujarat. However, the Court noted that section 45(1) does not contain the phrase "reasonable cause" as section 36(3) of the Bombay Sales Tax Act, 1959 does. The Court emphasized that the authority must act judicially when imposing penalties. The Tribunal was not required to consider whether there was deliberate and contumacious evasion, as it was not argued. The Tribunal's decision to reduce the penalty was deemed just and not influenced by irrelevant circumstances. Thus, the Tribunal's reduction of the penalty to Rs. 1,500 was upheld.

Conclusion:
The Court answered both questions in favor of the Revenue and against the dealer. The Tribunal's reduction of the penalty under section 45(6) was overturned, reinstating the original penalty, while the reduction under section 45(1) was upheld. The reference was answered accordingly with no order as to costs.