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TMI Blog1976 (2) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Commissioner of Sales Tax served a notice of suo motu revision under section 31(1) of the 1953 Act calling upon the respondent-firm to show cause why the said order of assessment should not be revised as to impose penalty under section 16(4) of the 1953 Act for late payment of tax in respect of the last quarter of the year 1959. Before the Assistant Commissioner of Sales Tax a contention was raised on behalf of the respondent-firm that after the death of the said Parikh, penalty proceedings could not be continued or taken against his legal representative, namely, his widow, and no penalty could be imposed upon her. This contention was negatived by the Assistant Commissioner who, by his order dated 22nd September, 1964, imposed a penalty under the said section 16(4) in the sum of Rs. 8,690.31. The appeal filed by the respondent-firm to the Deputy Commissioner of Sales Tax proved unsuccessful, and the respondentfirm thereupon approached the Tribunal in revision. The Tribunal upheld the contention of the respondent-firm and held that the provisions of the 1959 Act could not be invoked to sustain the impugned order of penalty, and set aside the said order. It is out of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to assimilate these different Acts into one uniform code for the whole of the State, the 1959 Act was enacted. By section 76 of the 1959 Act all the Sales Tax Acts in force prior to the date of coming into force of the 1959 Act, namely, 1st January, 1960, which date is referred to in the 1959 Act as the "appointed day", were repealed. A consolidating Act is one which codifies and consolidates existing law, but a consolidating and amending Act does not merely codify or consolidate. It also amends and alters the law as then existing. It, however, does not follow that any amendment made by a consolidating and amending Act in the state of the law till then prevailing has been made with any retrospective effect. Whether any such alteration in the law has retrospective effect or not is to be judged in the same way as in the case of any other amending provision, namely, by ascertaining whether a retrospective effect was intended to be given to the amending provision by the amending statute. Before, therefore, examining the language of sections 19(1) and 34 of the 1959 Act, relied upon by Mr. Bhabha, it is necessary to consider the repeal and saving clauses of the 1959 Act. Section 76 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the law so repealed had been an enactment within the meaning of section 7 of that Act." Under clause (a) of section 77(1), the provisions of the earlier law continue to have effect for the purpose, inter alia, of the imposition of any penalty where such penalty relates to any period before the appointed day and for any other purpose whatsoever connected with or incidental to such purpose. Thus, it is clear that under section 77(1)(a) the statutory provisions that apply to the imposition of penalty in respect of the periods prior to 1st January, 1960, are not the provisions of the 1959 Act but of the 1953 Act and, therefore, if there was no provision in the 1953 Act for the imposition of a penalty in any particular case, the provisions of the 1959 Act cannot be invoked for the purpose of imposing penalty. This is further made clear by sub-section (3) of section 77 whereby without prejudice to the provisions, inter alia, of section 77(1)(a), section 7 of the Bombay General Clauses Act, 1904, is made applicable to the repeal of the earlier laws. Under section 7 of the Bombay General Clauses Act, 1904, where a Bombay Act is repealed, then unless a different intention appears, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liable to pay the tax due from such dealer under this Act or under any earlier law, and (b) if the business carried on by the dealer is discontinued after his death, his legal representative shall be liable to pay out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax (including any penalty) due from such dealer under this Act or under any earlier law, whether such tax (including any penalty) has been assessed before his death but has remained unpaid, or is assessed after his death." This sub-section contemplates two cases: one the case of a dealer dying and his business being carried on after his death by his legal representative or any other person and the other that of a dealer dying and his business being discontinued after his death. In the first case, the legal representative or other person continuing the business is made "liable to pay the tax due from such dealer under this Act or under any earlier law", while in the second case, the legal representative is "liable to pay out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax (including any penalty) due fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word "tax" should be construed so as to include penalty. We are unable to accept this submission also. It is true that in the context of the phrase "any earlier law" in section 19(1)(a) the word "tax" cannot mean tax under the 1959 Act and, therefore, in clauses (a) and (b) of section 19(1), where the word "tax" is used with reference to tax due under any earlier law, it must mean the tax due under the Sales Tax Acts repealed by the 1959 Act, but does not and cannot mean that the word "tax" in this context would also mean penalty. That the word "tax" does not ordinarily mean penalty has now been held by the Supreme Court in Khemka Co. (Agencies) Pvt. Ltd. v. State of Maharashtra[1975] 35 S.T.C. 571 at 581 (S.C.). In that case, Ray, C.J., who spoke for the majority, said: "Tax and penalty like tax and interest are distinct and different concepts under the Indian Income-tax Act. The word 'assessment' could cover penalty proceedings if it is used to denote the whole procedure for imposing liability on the taxpayer as happened in Abraham's case[1961] 41 I.T.R. 425 (S.C.); [1961] 2 S.C.R. 765.Penalty is within assessment proceedings just as tax is within assessment proceedings when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income-tax and super tax" in respect of certain periods. It was urged on behalf of the assessees that the provisions of the Hyderabad Act were kept alive only for the purposes of levy, assessment and collection of tax and not of penalty. This contention was repelled by the Supreme Court pointing out that depending upon the context in which it was used, the word "assessment" had different meanings, that it sometimes meant the computation of income, sometimes the determination of the amount of tax payable, and sometimes the whole procedure laid down in the Act for imposing a liability upon the taxpayer. On a construction of the relevant provisions of the Hyderabad Act and of the repealing and saving section of the Finance Act, 1950, the Supreme Court held that the word "assessment" included not merely the assessment to tax but also the imposition of penalty. The question thus before the Supreme Court was whether the phrase "levy, assessment and collection of income-tax and super tax" included any imposition of penalty as part of the whole process of assessment. The question before the Supreme Court was not the distinction between tax and penalty when a statute specifically has made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent one. In that case both the tax had been assessed and the penalty had been imposed. Before us the question is of the power to impose penalty. Further, the Punjab General Sales Tax Act, 1948, did not define the term "tax", while the 1959 Act defines that term. This case, therefore, throws no light on the matter. According to us, on a clear reading of the statutory provisions concerned, the argument that in a case such as the one before us the department was entitled to impose penalty on the legal representative of a deceased dealer whose business was continued after his death cannot be supported and is not borne out by the provisions of the 1959 Act. Though we have reached this conclusion independently of the legislative history of section 19(1), it would be none the less interesting to refer to this legislative history. In the Bill, as originally introduced, clause 19, which has ultimately emerged as section 19, provided for the legal representative's liability to pay the tax, including any penalty, due from the deceased dealer under the 1959 Act or under any earlier law even in a case where the business of the deceased dealer was continued after his death. The Bill was then ..... X X X X Extracts X X X X X X X X Extracts X X X X
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