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TMI Blog1970 (2) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... so, as averred in the petition, is that the sales were made on approval basis to the Government departments and as the payments of the amounts were not made by the Government, therefore, the tax could not be deposited. On behalf of the respondent-State it has been averred that as soon as the goods were taken delivery from the bailee by the purchasing parties, the sale is complete and the tax on the inter-State sale is attracted forthwith under section 6 of the Act and it has been further denied for want of knowledge that the Government department did not make payment for the same during the relevant period. A show cause notice was issued to the assessee by the authority for the non-payment of the tax due, in response to which the petitioners appeared before the assessing authority on the 18th of March, 1968, and were directed to make payment in the Treasury and produce the receipt by the 21st of March, 1968, at 10 A.M., but it is averred that none appeared on behalf of the petitioners on the said date and time. Another show cause notice was issued before the final hearing on the 30th of March, 1968, but the petitioners did not deposit the amount in cash, though it has been averred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Madras[1967] 20 S.T.C. 146., The State of Madras v. M. Angappa Chettiar[1968] 22 S.T.C. 226., and K.A. Ramudu Chettiar v. State of Madras[1968] 22 S.T.C. 283. These authorities undoubtedly lend support to the contention raised on behalf of the petitioner. It becomes necessary to reproduce the relevant provisions of the statute around which the rival contentions revolve. Section 9(3) and section 9(4) of the Central Sales Tax Act are in the following terms: "9. (3) The authorities for the time being empowered to assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India and subject to any rules made under this Act, assess, collect and enforce payment of any tax, including any penalty, payable by a dealer under this Act in the same manner as the tax on the sale or purchase of goods under the general sales tax law of the State is assessed, paid and collected; 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, appeals, reviews, revisions, referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the statutes in the said case first adverted to the compulsions and complexity of the present day administration which necessitates a resort to delegated legislation and his Lordship has observed as follows: "I have referred to these instances to show that the complexity of modern administration and the expansion of the functions of the State to the economic and social sphere have rendered it necessary to resort to new forms of legislation and to give wide powers to various authorities on suitable occasions." And again referring to delegated legislation "This form of legislation has become a present day necessity, and it has come to stay-it is both inevitable and indispensable. The Legislature has now to make so many laws that it has no time to devote to all the legislative details, and sometimes the subject on which it has to legislate is of such a technical nature that all it can do is to state the broad principles and leave the details to be worked out by those who are more familiar with the subject." The learned Judge posed the following question which went to the root of the principle of delegated legislation and formulated it as follows: "Can a Legislature w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l sales tax and consequently it could reasonably delegate this power to the relevant State Legislatures. Obviously it would have been impractical, if not impossible, to make different sets of legislation for the said purpose for each State of the Union. It could, therefore, ultilise the agency of the State Legislature to the extent it found it necessary for doing so as it would have been patently inconvenient for it to legislate regarding the territory of each State. In doing so, Parliament does not in any way abdicate any of its functions nor does this act amount to any self-effacement or setting up of a parallel Legislature thereby. The power to control, recall or modify any such delegated legislation (for a limited ancillary purpose) for the collection of the tax which may have been made by the appropriate States continued to vest in Parliament and it could choose to do so at any time. Indeed in the complex situation arising in regard to the collection of the Central sales tax in the various States and Union Territories which comprise the Union of India any mode other than provided for in section 9(3) of the Central Act might well have led to serious anomalies. A brief referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny bar in principle to Parliament adopting the existing State legislations for the purpose of collection of the Central sales tax along with any prospective modifications which may be made by the respective States therein. The three Madras decisions relied upon by Mr. Thapar may now be noticed. The first of these is D.H. Shah Co. v. The State of Madras[1967] 20 S.T.C. 146. The Division Bench in this case adopted the view enunciated earlier in Haji J.A. Kareem Sait v. Deputy Commercial Tax Officer, Mettupalayam[1966] 18 S.T.C. 370. Similarly in The State of Madras v. M. Angappa Chettiar and Sons[1968] 22 S.T.C. 226., the earlier view in the abovesaid two cases was accepted as the correctness thereof was never challenged before the learned Judges. Lastly in K.A. Ramudu Chettiar and Company v. The State of Madras[1968] 22 S.T.C. 283., the Bench followed the earlier decisions which were in fact binding on it by expressly saying that it was not necessary to elaborate the question in view of the earlier authorities. In these three judgments we find no elaborate elucidation of the principle on which their Lordships based themselves and the earlier Supreme Court authority referred to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions which may be made therein by the appropriate States. This patently appears to be so by the use of the following words at the very opening of sub-section (3): "The authorities for the time being empowered to assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, * * * *" The use of the words "for the time being" is obviously significant. It clearly means that the Parliament was visualising that in the future that relevant machinery for the collection of sales tax may be varied by the States by amendment and hence empower the authorities existing at the said time for the purpose of the collection etc. of the Central sales tax. Again, the words used at the close of the sub-section deserve notice. Thereby it is expressly provided that the authority under the general sales tax law of the State may exercise all or any of the powers they have under those provisions and these shall apply accordingly for the purposes of the assessment, collection and enforcement of the payment of the Central sales tax. The use of the words "shall apply accordingly" is of particular significance and read in the context of the words "the authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... month/quarter/year, together with a treasury/bank receipt in token of the tax due having been paid. Payment shall also be permissible by means of cross-cheques/drafts drawn in favour of the Assessing Authority concerned at places where the treasury business is conducted by the State Bank of India, due regard being had to the provisions of Note 4 under rule 2.5 of the Subsidiary Treasury Rules. (2), (3), (4), (5) * * * * 8.. * * * * * 9.. Whosoever commits a breach of any of the provisions of these rules, shall be punishable with fine which may extend to five hundred rupees and when the offence is a continuing one, with a daily fine which may extend to fifty rupees for every day during which the offence continues." On the basis of the abovesaid provisions it is argued that as rule 7-A(1) directs that a treasury or bank receipt in token of the tax due having been paid has to be attached to the return required to be furnished in Form I the contravention thereof can be made punishable only under rule 9. The burden of the argument is that this rule 9 overrides the penalty clauses of the Punjab Act, namely, sections 10(4) and 10(6) of the Punjab Act and action can be taken only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made thereto. Rule 7-A is on the face of it preceded by the following heading which makes the intents of the framers of the rules explicit. "Furnishing of information." (It deserves notice, however, in passing, that the authoritative publication of the Punjab Taxation Code, owing to a printer's error has inadvertently omitted this heading.) Viewed in the context above and on a closer analysis of the provisions of rule 7-A it is manifest that this rule is meant entirely for the furnishing of certain information which may be required by the authorities. These provisions are entirely procedural relating to the forms etc. and the manner of furnishing of information which may be required by the authorities. Sub-rule (2) provides that payments shall be made in the challan Form II and sub-rule (3) enjoins the maintenance of a register with the relevant declaration in Form 'C' and sub-rule (4) empowers the inspection of the relevant declarations. Lastly sub-rule (5) provides for the furnishing of a revised return in case of any error or omission in the earlier one. An overall analysis of these provisions makes it manifest that these are merely procedural, and laid down the form and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and collection of tax. Applying this principle it necessarily follows that the relevant provisions would be those of section 10(6) rather than the incidental and procedural provisions for the furnishing of information under rule 7-A of the Central Sales Tax (Punjab) Rules, the contravention whereof is made punishable under rule 9 thereof. The learned Advocate-General for the State of Haryana had also contended that even if it be assumed for the sake of argument that rule 9 of the Central Sales Tax (Punjab) Rules is also attracted to the non-payment of this tax yet the provisions of rule 9 make it clear that it creates a punishable criminal offence. It was pointed out that rule 9 provides for punishment with a fine and further that if the offence is a continuing one then a daily fine may be imposed under its provisions. It was consequently contended with plausibility that this rule, if at all, made the contravention of the duty to pay tax a criminal offence punishable thereunder. This, it was argued, would not in any way take away the power of the authority to impose a penalty as provided for under section 10(6) of the Act. We find considerable merit in this argument on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State shall, on behalf of the Government of India and subject to any rules made under this Act, assess, collect and enforce payment of any tax, including any penalty, payable by a dealer under this Act..................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, appeals, reviews, revisions, references, penalties and compounding of offences, shall apply accordingly." The analysis of the abovementioned provision goes to show that the authorities which have to collect the tax imposed by section 6 of the Central Act would be the same as the authorities to collect and enforce the general sales tax of the appropriate State. Secondly, such authorities are authorised to assess, collect and enforce payment of any tax including any penalty payable by a dealer under this Act in the same manner as they could assess, collect and enforce payment of a tax under the State law; thirdly, these authorities will be entitled to exercise all the powers that they have under the State law and lastly, the provisions of such a State law including the provisions r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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