1996 (9) TMI 580 - HC - VAT and Sales Tax

Summary

Issues:
1. Refusal to refer questions of law to the High Court under section 42(2) of the Haryana General Sales Tax Act, 1973.
2. Imposition of penalty under section 37(6) of the Act.
3. Compliance with rule 27 regarding notice in penalty proceedings.
4. Justifiability of the imposition of the maximum penalty rate of 25%.

Analysis:

The petitioner, a registered dealer, filed a petition under section 42(2) of the Haryana General Sales Tax Act, 1973, seeking a direction to the Sales Tax Tribunal to refer questions of law arising from an order imposing penalties. The Excise and Taxation Officer intercepted a tanker carrying mustard oil and imposed a penalty for an attempt to evade tax. The Tribunal upheld the penalty, reducing it slightly. The petitioner contended that the penalty was unjustifiable and raised multiple legal questions for referral to the High Court.

1. The Court held that the imposition of penalty under section 37(6) was based on a reasoned order after an inquiry, concluding that there was an attempt to evade tax. As the conclusions were factual, question (i) did not necessitate a reference to the High Court.

2. Question (ii) revolved around the jurisdiction of the Excise and Taxation Officer to impose a penalty. The Court clarified that the officer had the authority to check goods in transit and levy penalties under section 37(6), irrespective of assessment procedures. The argument against the officer's jurisdiction was deemed misconceived.

3. In relation to question (iii) concerning compliance with rule 27 for notice in penalty proceedings, the Court noted that the rule applied to different sections of the Act and was not relevant to section 37. Therefore, the question was not referable.

4. Regarding question (iv) on the justifiability of the maximum penalty rate, the Court emphasized that the officer had the discretion to levy penalties within a specified range based on the circumstances. The Tribunal had considered the facts and reduced the penalty slightly, indicating a proper application of discretion. Thus, the question did not warrant a reference.

Ultimately, the Court concluded that no referable question of law arose, dismissing the petition seeking a direction to refer the legal questions to the High Court. The petition was consequently dismissed, upholding the Tribunal's decision on the penalty imposition.