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TMI Blog1970 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... gistrate at Raichur, for the recovery of the sum due as penalty, as if it where a fine imposed by the court. The case in question is Criminal Case No. 264/iv/1969. The court issued a distress warrant for the recovery of the said sum. Aggrieved by that the petitioner approached this court under section 13(4) of the State Act, in S.T.R.P. No. 22 of 1969, on 28th May, 1969. Subsequently on 23rd January, 1970, in respect of the same matter, he has preferred Writ Petition No. 345 of 1970, as it was felt that the question of constitutional validity of the recovery proceedings had arisen. After the writ petition was entertained, it was submitted on behalf of the petitioner that S.T.R.P. No. 22 of 1969 might be dismissed as not pressed. Before adverting to the contentions on merits advanced on behalf of the parties, it is convenient to dispose of a preliminary objection taken on behalf of the respondent. The argument is that the writ petition has been filed nearly It years after the impugned notice of demand dated 20th June, 1968, was served on the petitioner and as such the petition suffered from inordinate delay. Consequently it was not a fit case for interference under article 226 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, penalties, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly.............." The relevant portions of section 13 of the State Act read thus: "Payment and recovery of tax.-(1) The tax under this Act shall be paid in such manner and in such instalments; if any, and within such time, as may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kottayam[1956] 29 I.T.R. 456. He also invited reference to certain unreported decisions of the Supreme Court, which will be referred to later. On behalf of the State, strong reliance was placed on a decision of this court reported in K.V. Adinarayana Setty v. Commercial Tax Officer, Kolar Circle, Kolar[1963] 14 S.T.C. 587. In the case of M.M. Mathew v. Second Additional Income-tax Officer, Kottayam[1956] 29 I.T.R. 456., a Single Judge of the Kerala High Court, while dealing with the question of levy of penalty imposed under section 29(1)(c) of the Income-tax Act, 1922, and the recovery thereof under the TravancoreCochin Revenue Recovery Act (7 of 1951), observed thus: "It is impossible to consider that the imposition of penalty is also a mode of recovery of tax." In observing thus, no reasons have been assigned by the court for that proposition. In the case of D.H. Shah and Co. v. The State of Madras [1967] 20 S.T.C. 146., the question that arose for consideration was whether a penalty levied under section 9(3) of the Central Act unamended read with section 12(3) of the Madras General Sales Tax Act, was justified. The court observed thus in that connection: "........Sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. But, the contention advanced on behalf of the State in the present case is that the levy of penalty under section 13(2) of the State Act was a part of the procedure for the recovery of tax. For this proposition, this decision cannot be of any assistance to the respondent, as this question did not arise for consideration in that case. In this connection it is observed thus: "........The said observation is in no way useful in the present case, as it is not contended that the penalty under section 13(2) of the Mysore Act is a mode of recovery of tax." For these resons, this case is clearly of no assistance to the respondent. In our judgment, the provisions relating to penalty in a taxing statute are substantive in character. In this view such provisions cannot be reasonably accepted as forming part of the procedural law. Unless such penal provisions in the State law are expressly adopted by the provisions of section 9(2) of the Central Act, they cannot be relied upon for the purpose of recovery of tax due under the Central Act. Further, section 9(2) of the Central Act as amended by Act No. 28 of 1969, has effected changes so as to exclude any idea of adoption of substantive p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 and 1229 of 1969, the Supreme Court had occasion to examine the scope and nature of section 9(2) of the Central Act as amended by the Ordinance. Shah, Ag. C.J., speaking for the Bench states the position thus: "The effect of the Ordinance is to supersede the judgment of this court in Yaddalam Lakshminarasimhiah Setty's case[1965] 2 S.C.R. 129; 16 S.T.C. 231. It is now made clear that even if no tax was leviable under the general sales tax law of the State in respect of intrastate transactions of sale, tax will be leviable on sale of goods effected by a dealer in the course of inter-State trade according to the Sales tax law of the appropriate State. By section 9(2) of the Central Sales Tax Act as modified it is enacted that the authorities empowered to assess, reassess, collect and enforce payment of any tax under the general sales tax law of the State shall be entitled, on behalf of the Government of India, to assess, reassess, collect and enforce payment of tax by a dealer under the Act as if the tax payable by such a dealer under the Act was tax payable under the general sales tax law of the State, and for this purpose they may exercise all or any of the powers they have under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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