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TMI Blog1981 (2) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed in the said entry 37 as it stood at the relevant time, form S in which the certificate was to be given by the Directorate-General requires a declaration by the purchaser, namely, the Ministry of Defence, Government of India, that the chassis purchased were delivered to a firm of body builders for construction of bodies thereon. The applicants filed their return for the said quarter on 7th August, 1964, which was the last date for filing returns for the quarter April-June, 1964. Prior thereto they paid into the Government treasury the amount of tax payable according to such return. In view of the certificates in form S given by the Ministry of Defence, the applicants showed the sales of chassis of motor vehicles made to the DirectorateGeneral of Supplies and Disposals as being chargeable to tax at 2 per cent, and it was on that basis that the amount of tax payable was worked out in the said return and paid into the Government treasury. It is an admitted fact that the Ministry of Defence, instead of giving the chassis to a firm of body builders, constructed the bodies themselves. Thereupon feeling some doubt as to the rate of tax applicable to these transactions, the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On 15th February, 1974, the Deputy Commissioner of Sales Tax issued to the applicants a notice under section 57 of the said Act calling upon them to show cause why the said order of the Assistant Commissioner of Sales Tax in so far as it related to the deletion of the penalty imposed by the Sales Tax Officer should not be suo motu revised by him. On 21st May, 1974, the Deputy Commissioner revised the said order and levied upon the applicants penalty under section 36(3) in the sum of Rs. 1,60,545. According to the Deputy Commissioner, the balance amount of the tax on the said transactions of sale to the Ministry of Defence should have been paid by the applicants on receipt by them of the order of the Commissioner of Sales Tax in the said determination proceedings. In appeal the Tribunal upheld the order of the Deputy Commissioner. At the instance of the applicants the following question has been referred to this High Court by the Tribunal: "Whether, on the facts and in the circumstances of the case, the provisions of section 36(3) of the Bombay Sales Tax Act, 1959, were attracted?" Sub-section (3) of section 36 of the said Act has been amended from time to time, the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicants in time. Section 38 of the said Act deals with payment of tax. Under sub-section (1) of section 38 tax is to be paid in the manner provided in the said section and at such intervals as may be prescribed. Under sub-section (2) a registered dealer (that is, a dealer registered under section 22 of the said Act) furnishing returns as required by sub-section (1) of section 82 is to first pay into a Government treasury in the prescribed manner "the whole of the amount of tax due from him according to such return" along with the amount of any penalty payable by him under section 36. Under subsection (4) the amount of tax "due where returns have been furnished without full payment therefor", or assessed or reassessed less any sum already paid by the dealer, and the amount of penalty is to be paid by the dealer or the person liable therefor into a Government treasury by such date as may be specified in a notice issued by the Commissioner of Sales Tax for this purpose, being a date not later than thirty days from the date of service of the notice. Under subsection (5) any tax, penalty or sum forfeited, which remains unpaid after the date specified in the notice for payment, or after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of this Act" occurring in section 36(3) of the said Act, which we are neither able to appreciate nor understand. The Tribunal seems to have been much impressed by the fact that if penalty in such cases was not leviable it would throw open the door to massscale evasion of tax. The Tribunal has observed (at pages 31-32): "And, if section 36(3). is interpreted to cover only the case of a registered dealer, who does not pay the tax due according to the returns within the prescribed time, a dealer who conveniently or advisedly pays less tax, by showing less than the tax legally payable by him, in the returns, will be given a carte blanche to perpetuate such a state of affairs, to the detriment of the Government revenue, with impunity, which is not the scheme of the Act." We are as much unable to understand this great concern for the revenue shown by the Tribunal as we were unable to understand the distinction drawn by it between the words "by" and "under". It is common experience that in enacting fiscal legislation the legislature seeks to take proper care to ensure that the revenue is not cheated or defrauded, and as and when ingenuity of taxpayers devise methods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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