1995 (2) TMI 394 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Assistant Commissioner under section 57 of the Bombay Sales Tax Act, 1959.
2. Imposition of penalty under section 36(2)(c) of the Act.
3. Confirmation of orders by the Tribunal.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Assistant Commissioner under section 57 of the Bombay Sales Tax Act, 1959:

The core issue in this case is whether the Assistant Commissioner had the jurisdiction to take action under section 57 of the Bombay Sales Tax Act, 1959, and levy a penalty under section 36(2)(c) of the Act. The judgment clarifies that section 57 confers revisional powers on the Commissioner, allowing him to call for and examine the record of any order passed under the Act by any officer subordinate to him and to pass such orders as he deems just and proper. However, this power is supervisory in nature and must be exercised bona fide and judiciously. The section does not confer unrestricted power to initiate proceedings arbitrarily.

2. Imposition of penalty under section 36(2)(c) of the Act:

The judgment emphasizes that the power to impose penalties under section 36(2)(c) can only be exercised by the assessing authority while making the assessment or by the revisional authority while passing an order in revision proceedings. The revisional authority cannot initiate proceedings solely for the purpose of imposing a penalty. In this case, the Assistant Commissioner issued notices for a penalty under section 36(2)(c) independent of any revisional proceedings, which was beyond his jurisdiction. The Commissioner's power under section 57 is limited to revising orders passed by subordinate authorities and does not extend to initiating penalty proceedings independently.

3. Confirmation of orders by the Tribunal:

The Tribunal upheld the penalty imposed by the revisional authority but reduced the amount from Rs. 7,500 to Rs. 1,000. However, the High Court found that the Tribunal was not justified in upholding the levy of penalty under section 36(2) by the revisional authority, as the Commissioner was not exercising any power of revision at the time of issuing the penalty notice. The High Court concluded that the Tribunal erred in its judgment by confirming the penalty imposed by the revisional authority.

Conclusion:

The High Court answered the question referred to it in the negative, ruling in favor of the assessee. The judgment clarifies that the revisional authority can only impose penalties under section 36(2) while passing an order in revision and not independently. The Tribunal's confirmation of the penalty was deemed unjustified, and the imposition of the penalty by the revisional authority was invalid. The High Court made no order as to costs, concluding the reference in favor of the assessee.