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2016 (3) TMI 1478 - SC - Indian LawsLevy of penalty - no ex-post facto prior approval was taken - storage and removal of sugar by Sugar Mills - whether ex-post facto approval amount to sufficient compliance of the proviso to Sub-section (1) of Section 3A of the Act? - HELD THAT - The issue is no more res-integra and has been authoritatively determined by a series of judgment of this Court. It would be sufficient to refer to the judgment in the case of ASHOK KUMAR DAS VERSUS UNIVERSITY OF BURDWAN 2010 (3) TMI 1058 - SUPREME COURT where it was held that Similarly if the words used were with the prior approval of the State Government the Executive Council of the University could not determine the terms and conditions of service of the non-teaching staff without first obtaining the approval of the State Government. But since the words used are with the approval of the State Government the Executive Council of the University could determine the terms and conditions of service of the non-teaching staff and obtain the approval of the State Government subsequently and in case the State Government did not grant approval subsequently any action taken on the basis of the decision of the Executive Council of the University would be invalid and not otherwise. Thus the dictionary meaning of the word approval includes ratifying of the action ratification obviously can be given ex-post facto approval. Another aspect which is highlighted is a difference between approval and permission by Assessing Authority that in the case of approval the action holds until it is disapproved while in other case until permission is obtained. In the instant case the action was approved by the Assessing Authority. The Court also pointed out that if in those cases where prior approval is required expression prior has to be in the particular provision. In the proviso to Sub-section (1) of Section 3-A word prior is conspicuous. Thus it was not a case for levying any penalty upon the Appellant - the impugned judgment of the High Court set aside - appeal allowed.
Issues involved: Interpretation of provisions of U.P. Sugarcane Purchase Tax Act, 1961 regarding storage and removal of sugar by Sugar Mills, imposition of penalty for not taking prior approval for storage of sugar in rented Godown outside factory premises.
Issue 1: Storage and removal of sugar by Sugar Mills The Appellant, a Sugar Mill, faced challenges in storing sugar in factory premises in 1995-96 and 1996-97, leading to storage in a rented Godown outside the factory. The U.P. Sugarcane Purchase Tax Act, 1961 mandates that sugar produced in the factory cannot be removed for consumption or sale unless the tax u/s 3 is paid. However, a proviso allows storage in an approved space outside the factory with conditions. The Appellant sought ex-post facto approval for storing sugar in the Godown, ensuring tax payment before removal. The Assessing Authority granted ex-post facto approval, verifying tax payment, and warned for timely permissions. Subsequently, a show cause notice was issued for penalty for not taking prior approval, which the Appellant contested, citing ex-post facto approval as sufficient compliance. Issue 2: Imposition of penalty for not taking prior approval The Assessing Authority imposed a penalty equivalent to 100% of the tax payable, despite the Appellant's compliance with tax payment at the time of removal. The Appellant's appeal and Writ Petition were dismissed by the lower courts, emphasizing the requirement of prior approval. The Supreme Court analyzed the concept of approval, distinguishing it from permission, highlighting that approval can be subsequent to the action. Referring to relevant case laws, the Court concluded that ex-post facto approval sufficed as compliance with the Act's proviso, as the action was approved by the Assessing Authority. Therefore, the penalty imposition was deemed unjustified, and the appeal was allowed, setting aside the penalty and lower court judgments. Separate Judgement: Civil Appeal No. 1468/2006 was allowed in line with the decision in Civil Appeal No. 1467/2006, with no order as to costs.
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