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TMI Blog1978 (8) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... r in Civil Writ No. 1471 was made under both the Acts on 29th December, 1969, by the Assessing Authority, Hissar. Thereafter, the Deputy Excise and Taxation Commissioner, Ambala, acting suo motu issued to the petitioner in Civil Writ No. 1177 a notice dated 19th January, 1976, and thereby required the petitioner to appear in the proceedings intended to be taken with a view to determine the question of its liability for penalty in terms of section 49(3) of the Haryana Act on account of collection by it of the amount of tax in excess of the amount permissible under the Central Act. A similar notice dated 23rd February, 1977 was issued by the Assessing Authority, Hissar, to the petitioner in Civil Writ No. 1471 under section 9(2) of the Central Act, read with section 49 of the Haryana Act. It appears that the petitioners chose not to appear in the proceedings so intended and instead approached this Court for quashing the notices in exercise of its extraordinary powers. The legality of the notice has been challenged in each case by the learned counsel and it is contended that: (i) Section 49 of the Haryana Act, under which it is proposed to levy penalty, is beyond the competence of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to be by way of tax under this Act, such dealer shall pay over to the State Government, within such time and in such manner as may be prescribed, the amount so collected. (3) If any dealer liable to pay tax under this Act, collects tax on any transaction not liable to tax under this Act or in excess of the tax leviable under this Act, such dealer shall pay over to the State Government, in addition to the tax payable, the amount so collected within such time and in such manner as may be prescribed. (4) If the amount of tax collected by any dealer under sub-section (2) or sub-section (3) is not paid to the State Government within the time, and in the manner prescribed, it shall be recoverable as arrears of land revenue: Provided that the payment of any claim to such amount made by the person who paid it to such dealer shall be the liability of the State Government." The learned Advocate-General for the State of Haryana drew our attention to the recent judgment of the Supreme Court in the case of R. S. Joshi, Sales Tax Officer, Gujarat v. Ajit Mills Ltd.[1977] 40 S.T.C. 497 (S.C.). and submitted that, in view of what had been held therein, the competency of the legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal punitive measures, including the dissuasive penalty of confiscating the excess collections, are valid, being within the range of ancillary powers of the legislature competent to exact a sales tax levy. The fact that there is arithmetical identity between the figures of the illegal collections made by the dealers and the amounts forfeited to the State cannot create a conceptual confusion that what is provided is not punishment but a transference of funds. The notion that a penalty or a punishment cannot be cast in the form of an absolute or no-fault liability but must be preceded by mens rea is not correct. Therefore, the contention that section 37(1) fastens a heavy liability regardless of fault has no force in depriving the forfeiture of the character of penalty. The fact that in section 37(1) mens rea is excluded and the penal forfeiture can be enormous are germane to legislative policy, not for judicial compassion. In a developing country, with the mass of the people illiterate and below the poverty line, and most of the commodities concerned constitute their daily requirements, there is sufficient nexus between the power to tax and the incidental power to protect purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition of law firmly settled by the Supreme Court. It has been laid down by the Supreme Court that the power of the legislature to enact a law with reference to the topic entrusted to it is unqualified subject to a limitation imposed by the Constitution and that, in exercise of such a power, it is competent for the legislature to enact a law which is either prospective or retrospective. This situation of law, when pointed out, the learned counsel were unable to advance any argument in support of the contention raised. Consequently, it is held that section 49 of the Haryana Act is not ultra vires the powers of the legislature on the ground that it operates retrospectively. Contention No. 3.-Section 65(1) of the Haryana Act and the proviso to it, on which the contention by the learned counsel is based, is in these terms: "65. (1) The Punjab General Sales Tax Act, 1948 (hereinafter referred to as the repealed Act), is hereby repealed: Provided that such repeal shall not affect the previous operation of the repealed Act or any right, title, obligation or liability already acquired, accrued or incurred thereunder, and subject thereto, anything done or any action taken, shall be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eopened by the appellate authority and, consequently, the assessing authority was not competent to reopen the assessment. In the other case of Sales Tax Officer v. Hanuman Prasad[1967] 19 S.T.C. 87 (S.C.)., the respondent was assessed to sales tax under the Central Provinces and Berar Sales Tax Act, 1947. The order in this behalf was made by the authority sometime after the enforcement of the Madhya Pradesh General Sales Tax Act, 1958, which by section 52 repealed the 1947 Act. The proviso to section 52 was practically in the same words as the proviso to section 65 of the Haryana Act and it saved the rights accruing under the 1947 Act. Sometime after the lapse of three years, the assessing authority commenced action so as to reassess the respondent on the ground that a part of his turnover had escaped assessment under the 1947 Act. The period within which the reassessment proceedings could be initiated was three years from the date of the assessment year. Consequently, the respondent questioned the legality of the proceedings on the ground that they were time-barred. It was contended on behalf of the assessing authority that the period for the assessment was 5 years under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dealer to pay sales tax payable under the Central Act within the prescribed time." It follows that, if section 9 of the Central Act stood as it was at the time the Supreme Court decided the aforesaid case, the contentions raised by the learned counsel would be unanswerable and have to be accepted. But the position has completely changed since then, in view of the legislative enactment, namely, the Central Sales Tax (Amendment) Act (No. 103 of 1976), which received the assent of the President on 7th September, 1976. By section 6 of the amending Act, a new sub-section, namely, sub-section (2A) was inserted in section 9 of the Central Act. The said sub-section is as follows: "All the provisions relating to offences and penalties (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in sections 10 and 10A) of the general sales tax law of each State shall, with necessary modifications, apply in relation to the assessment, reassessment, collection and the enforcement of payment of any tax required to be collected under this Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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