9911796707
TMI Blog1974 (8) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and required the company to pay a sum of Rs. 39,405.30 on that count. The petitioner has challenged the vires of section 9-B(3) of the Act as also the imposition of penalty in the facts of the case. 2.. In the counter-affidavit, the levy of penalty under section 9-B(3) of the Act has been contended to be just and proper and section 9-B(3) is claimed to be intra vires the Constitution. 3.. On the contentions raised and pressed before at the time of hearing, two questions arise for determination: "(i) Is the provision under section 9-13(3) of the Act ultra vires the Constitution being beyond the legislative competence of the State Legislature? and (ii) Is the levy of penalty justified in the facts of the case?" 4.. For convenienc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2(h) of the Act and where freight is separately charged, it does not merge into sale price for the purposes of imposition of sales tax. According to the learned standing counsel, in view of this definition as also the earlier decision of the Supreme Court in the case of Tungabhadra Industries Ltd. v. Commercial Tax Officer[1960] 11 S.T.C. 827 (S.C.)., there was no scope for any ambiguity regarding liability for payment of sales tax in respect of freight. 5.. Section 9-B was introduced into the Act under Orissa Act 24 of 1950 and sub-section (3) thereof prior to the amendment under Orissa Act 15 of 1968 provided: "The amount realised by any person by way of tax shall, notwithstanding anything contained in any other provision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt dealt with the admissibility of a claim of exemption of sales tax in regard to the freight. The claim was not accepted as it was found that freight had not been separately charged. In the case of Hyderabad Asbestos Cement Products Ltd.[1969] 24 S.T.C. 487 (S.C.)., the question for consideration was the admissibility of the claim for exemption from sales tax in regard to freight. The court found that the manner in which the bill was drawn was not determinative and the express term of the contract under which the sale was effected having provided that the freight was not to be merged into price, the claim of exemption was justified. According to the assessee, the provision of section 9-B(3) of the Act, as amended, had recently come into fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer. Granting that they erred, no case for imposing penalty was made out." The character of penalty under section 9-13(3) of the Act is not different from the penalty leviable under section 12(5) of the Act. The observations of the Supreme Court extracted above would, therefore, have application to levy of penalty under section 9-B(3) of the Act. As we have already indicated, the amendment of section 9-B(3) of the Act was recent. The Supreme Court delivered its judgment in Hyderabad Asbestos Cement Products Ltd.[1969] 24 S.T.C. 487 (S.C.)., in February, 1969, which clarified the position in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected by way of penalty and at a higher rate. It is contended that entry 64 of List II of Schedule VII of the Constitution also would not cover a provision like section 9-B(3) of the Act. In the absence of appropriate guideline in the matter of imposition of penalty, the provision is arbitrary, unreasonable, confiscatory and void as conferring unguided and unchannelled power on the assessing officer in the matter of levy of penalty. Long and interesting arguments have been advanced on both sides, but we do not think it appropriate to examine the vires of the statute in view of the fact that the petitioner has been able to avoid the levy of penalty on another count. The grievance was against the imposition of penalty and the cause of action ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
