1995 (2) TMI 365 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Whether the Tribunal erred in holding that the assessment of the respondent-dealer who filed returns late could only be made under section 33(5) of the Bombay Sales Tax Act, 1959.
2. Whether the Tribunal erred in holding that the case of the respondent-dealer is not covered by Explanation (1) to section 36(2)(c).
3. Whether the Tribunal erred in not considering the alternative prayer of the department for converting the penalty imposed under section 36(2)(c), Explanation (1) to a penalty under section 36(2)(c), Explanation (2).

Issue-Wise Detailed Analysis:

Issue 1: Assessment Under Section 33(5)
The primary issue was whether the assessment of a dealer who filed returns late should be made under section 33(5) of the Bombay Sales Tax Act, 1959. The court examined the relevant sections of the Act, particularly sections 32 and 33. It was noted that section 32 deals with the filing of returns, and section 33 outlines the assessment procedures. The court emphasized that returns filed after the prescribed date do not cease to be valid returns. Therefore, assessments must be made under subsections (2), (3), or (4) of section 33 if returns are filed, even belatedly. The court concluded that the assessment of the dealer in this case should be under section 33(3) and not section 33(5), contrary to the Tribunal's decision.

Issue 2: Applicability of Explanation (1) to Section 36(2)(c)
The second issue was whether the Tribunal erred in holding that the case of the respondent-dealer is not covered by Explanation (1) to section 36(2)(c). The court clarified that Explanation (1) applies to assessments made under subsections (3) and (4) of section 33, not under subsection (5). Since the assessment in this case was under section 33(3), Explanation (1) to section 36(2)(c) was applicable. The Tribunal's contrary view was incorrect. The court highlighted that the penalty provisions under section 36(2)(c) are stringent for dealers who fail to submit returns or pay taxes, shifting the burden of proof to them to refute the presumption of concealment.

Issue 3: Alternative Prayer for Penalty Conversion
The third issue concerned whether the Tribunal erred in not considering the department's alternative prayer for converting the penalty under Explanation (1) to Explanation (2) of section 36(2)(c). Given the court's findings on the first two issues, this question became academic. The court declined to answer it, as the primary issues had already been resolved in favor of the Revenue.

Conclusion:
The court concluded that the Tribunal erred in its interpretation and application of the relevant sections of the Bombay Sales Tax Act, 1959. The assessment should be under section 33(3), and Explanation (1) to section 36(2)(c) is applicable. Consequently, the penalty levied by the Sales Tax Officer was justified. The court answered the first two questions in the affirmative, in favor of the Revenue, and declined to address the third question. The reference was disposed of with no order as to costs.