1996 (10) TMI 446 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Commercial Taxes Officer, Bureau of Investigation, under sections 18 and 19 of the Ordinance preceding the Bihar Finance Act, 1981.
2. Validity of penalty imposition for the periods January 1, 1980 to March 31, 1980, April 1, 1980 to March 31, 1981, and April 1, 1981 to June 28, 1981.

Detailed Analysis:

1. Jurisdiction of the Commercial Taxes Officer, Bureau of Investigation:

The primary issue was whether the Commercial Taxes Officer, Bureau of Investigation (respondent No. 6), had the authority to impose penalties under sections 18 and 19 of the Ordinance preceding the Bihar Finance Act, 1981, for the periods January 1, 1980 to March 31, 1980, and April 1, 1980 to March 31, 1981. The dealer contended that the officer lacked jurisdiction, as there was no notification vesting such power in him.

The Tribunal initially accepted the dealer's submission for the period after the Act came into force (April 1, 1981 to June 28, 1981), holding that the officer was not legally empowered to make assessments and impose penalties for this period. However, it upheld the penalties for the periods governed by the Ordinance, stating that there was no negative covenant or injunction in section 51(2) of the Bihar Finance Act, 1981, preventing the officer from exercising such powers.

Upon further examination, the Court clarified that section 51 of the Act (and section 46 of the Ordinance) were enabling provisions intended to confer powers on members of the Bureau who might not belong to the Commercial Taxes Department. These sections did not disqualify members who were already taxing authorities under section 9 of the Act.

2. Validity of Penalty Imposition:

The dealer's business premises were inspected on June 30, 1981, leading to the seizure of documents and books of accounts. Following this, a penalty proceeding was initiated, and an aggregate penalty of Rs. 6,20,016.44 was imposed for the periods in question. The dealer's appeal was dismissed, but the Tribunal provided partial relief by setting aside the penalty for the period April 1, 1981 to June 28, 1981.

The Court found that the Commercial Taxes Officer, Intelligence Branch, Ranchi Division, was fully competent to pass the penalty order by virtue of section 9(1) and (2) read with Notification No. 5162, dated May 9, 1977, and sections 19 and 20 read with rule 15 of the Bihar Sales Tax Rules, 1976. His powers did not cease simply because he was a member of the Intelligence Branch.

The Court concluded that the Tribunal erred in accepting the dealer's submission for the period April 1, 1981 to June 28, 1981. However, since this period was not under dispute in the reference, no order was passed regarding it.

Conclusion:

The reference was answered in the affirmative, in favor of the revenue and against the dealer. The Commercial Taxes Officer, Intelligence Branch, Ranchi Division, was deemed competent to impose penalties for the periods January 1, 1980 to March 31, 1980, and April 1, 1980 to March 31, 1981. The judgment emphasized that section 51 of the Act was enabling and did not disqualify officers who were already taxing authorities.