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TMI Blog1982 (10) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... each return. The assessee was thereupon served with a notice for the imposition of penalty under section 45(5) of the Act. In response to the notice, the assessee pleaded that the default on its part to pay the whole amount of tax due was not without reasonable cause within the meaning of section 45(5) of the Act. The Sales Tax Officer rejected the explanation furnished by the assessee and imposed penalty as follows for the default in respect of the different quarters: Rs. 1,365 first quarter. Rs. 26,040 second quarter. Rs. 23,357 third quarter. Rs. 11,633 fourth quarter. ---------- Rs. 62,395 ---------- The assessee carried the matter in appeal and the Assistant Commissioner of Sales Tax who heard the appeal dismissed it. The assessee carried the matter in further appeal before the Tribunal. In addition to urging that the failure to pay the whole amount of tax was not without reasonable cause, and that therefore, the provisions of section 45(5) were not attracted, the assessee urged that the penalty, if any, was leviable not under section 45(5) but under section 45(6) of the Act. The assessee, therefore, pleaded that the imposition of penalty under section 45(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the amount of any penalty payable by him under section 45. Sub-section (3), inter alia, provides that a registered dealer furnishing a revised return in accordance with sub-section (3) of section 40, which revised return shows that a larger amount of tax than already paid is payable, shall first pay into a Government treasury the extra amount of tax. Rule 31, which is required to be read along with the relevant provisions of section 47, inter alia, provides that every dealer required to furnish a monthly, quarterly or annual return shall, within a period of one month and seven days immediately succeeding the month, quarter or as the case may be, the year for which any such return is required to be furnished, pay into the Government treasury the tax due and payable for such month, quarter or as the case may be, year, along with the amount of any penalty payable by him under sub-section (5) of section 45 and shall within three days of such payment submit to the Sales Tax Officer one copy of the receipted chalan in form 33. Similarly, every dealer furnishing a revised return, which shows that a larger amount of tax than already paid is payable is required to pay into a Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period the time taken for making an order of assessment exceeds eighteen months from the date of expiry of the time prescribed for the payment of tax under section 47, the Commissioner shall remit the amount of penalty payable by the dealer for the period between the date of expiry of the said period of eighteen months and the date of payment of tax specified in the notice under sub-section (4) of section 47: Provided further that where the Commissioner is satisfied that the difference between the amount payable as assessed or reassessed and the amount paid, has taken place not without a reasonable cause, the Commissioner may remit the whole or the part of the penalty, payable in respect of any period by any dealer." Under sub-section (5) a dealer, who does not, without reasonable cause, pay tax within the time he is required by or under the provisions of the Act to pay it, is made liable to pay by way of penalty, in addition to the amount of tax, a sum at the rate specified in the said sub-section. The liability, however, is subject to the provisions of sub-section (4) of section 65 and the Commissioner, subject to such conditions as may be prescribed, and an appellate authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (3A) of section 36 of the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the Bombay Act"). The Division Bench, upon a consideration of the scheme of the Bombay Act, took the view that in a case where the amount of tax is partly paid, that is to say, when the dealer makes default in paying the whole of the tax due at the time of furnishing the return and makes only a part-payment of the tax, the case would fall within the provisions of sub-section (3) of section 36. Sub-section (3A) of section 36 would be attracted only when the dealer fails to pay the whole amount of tax or the whole of the extra amount of tax which he is required to pay at the time of furnishing the return or revised return, as the case may be. In terms, it was held that subsection (3A) would not cover the case where the amount of tax is paid in part at the time of furnishing the return. It is not in dispute that the provisions of sub-sections (3) and (3A) of section 36 of the Bombay Act are in Pari materia with sub-sections (5) and (6) of section 45 of the Act and that the scheme of the other relevant provisions of both the Acts is similar. Under the circumstances, there is no escape from the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration and review of the decision in Hiranand Shyamdas's case (printed at page 426 infra). We are reinforced in our view by the circumstance that it is not shown that in this very Court or in any other High Court a contrary view has been taken as regards the same or similar provisions. Besides, it is not shown that the decision in Hiranand Shyamdas's case (printed at page 426 infra) is given per incuriam. Even assuming that certain aspects of the question were not brought to the notice of the court which decided the said case, it would still be proper to decline to enter upon a reconsideration of the question since the decision has unquestionably been followed by the Tribunal and the lower authorities in other cases. In this connection, it will be pertinent to refer to the decision in Commissioner of Income-tax v. Balkrishna Malhotra [1971] 81 ITR 759 (SC) where the question was as to what was the true meaning of the word "assessment" in section 34(3) of the Indian Income-tax Act, 1922. In that context, the Supreme Court observed as follows at page 762: "As long back as September 24, 1953, the High Court of Madras in Viswanathan Chettiar's case [1954] 25 ITR 79 came to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a Full Bench of this Court, Bhagwati, C.J. (as he then was), speaking for the court, rejected the contention of the petitioners in that case to review a decision rendered by the Bombay High Court about 15 years earlier although it was felt that if the point had arisen for decision before this Court for the first time, it would have been most certainly inclined to accept the view canvassed by the petitioners. In Anandji Haridas Co. Ltd. v. State (1977) 18 GLR 271 (FB), speaking for another Full Bench, one of us (myself) expressed the view that a practice which had been prevalent in this Court in the matter of taxing of costs for nearly a decade should be adhered to. It would thus appear that even a period of a decade or a decade and half has been considered sufficient to invoke the principle of stare decisis particularly when it appears that numerous cases have been decided following the earlier decision. Having regard to these various factors, in our opinion, it would not be proper to accede to the request made on behalf of the assessee for a reconsideration of the decision in Hiranand Shyamdas's case (printed at page 426 infra). We have, under the circumstances, declined t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner filed an appeal before the Deputy Sales Tax Commissioner, Ahmedabad, Range 1, respondent No. 2 herein, who allowed the appeal of the petitioner and set aside the order dated 5th January, 1972, passed by respondent No. 1. Subsequent to the said order, respondent No. 1 again issued a show cause notice dated 17th July, 1972, upon the petitioner to show cause as to why penalty under section 36(3A) should not be levied against the petitioner for the less payment of tax than the tax shown as payable by the petitioner in the return for the period ending with 30th June, 1968. The petitioner filed his reply contending that the provisions of section 36(3A) were not applicable to the facts of the case and also that the said provisions were ultra vires the provisions to determine the question of the liability to pay penalty and to determine whether the dealer is prevented from making part-payment of the tax due to the existence of reasonable cause. Respondent No. 1 by his order No. SAHA-1/KAYADA/72-73/JA-9734-38 dated 21st September, 1972, rejected the contention of the petitioner and decided that penalty under section 36(3A) was attracted. He further held that the period for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner alleges that the order had been passed mala fide. Whether the order is passed mala fide or not is a question of fact and it is incumbent upon the petitioner alleges that the order is mala fide. As the details of mala fide are not given the said contention of the petitioner cannot be sustained. It is not necessary for us to consider the question of the constitutionality of sub-section (3) of section 36 or whether sub-section (3A) of section 36 is unworkable because the petition can be disposed of on the fourth point, viz., sub-section (3A) of section 36 does not apply to the facts of the present case. We will, therefore, now construe the provisions of section 36 of the Act. Section 36 runs as under: "36. (1) Where any dealer or commission agent purchases any taxable goods under a certificate given by him under section 11, 11A or 12, and contrary to such certificate the goods are used for another purpose, or are not resold or despatched in the manner and within the period certified, then the Commissioner may, after giving such dealer or commission agent a reasonable opportunity of being heard, by order in writing impose on him, in addition to any tax payable,- (a) if he has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount payable as aforesaid and the amount paid and the dealer shall pay by way of penalty on the amount of difference a sum calculated in accordance with the provisions of sub-section (3) and the provisions of sub-section (3) shall so far as may be applied thereto. (4) If any dealer contravenes the provisions of section 47, the Commissioner may, after giving such dealer an opportunity of being heard, direct him to pay by way of penalty a sum not exceeding double the amount of such bill or cash memorandum in respect of which such contravention has occurred, or one hundred rupees, whichever is more. (5) No prosecution for an offence under this Act, shall be instituted in respect of the same facts on which a penalty has been imposed under this section. " It is apparent that the provisions of sub-section (3) and sub-section (3A) provide for penalty. The provisions of sub-section (3A) are more onerous than the provisions of sub-section (3) of section 36. The question then arises in what cases the provisions of sub-section (3) of section 36 will apply and in what cases the provisions of sub-section (3A) of section 36 will apply? Before we go to the construction of this sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrears of land revenue. Bearing in mind this scheme, we will now come to the provisions of sub-section (3) of section 36. The sub-section provides the rate of penalty and the date from which penalty is to be calculated. The rate is a fixed one. There is no minimum or maximum. A dealer who commits default in making payment of tax with the return as required by subsection (2) of section 38 has to pay a penalty according to the rate fixed in sub-section (3) of section 36. But this obligation to pay the amount is not absolute. The dealer can show reasonable cause which prevented him from paying the tax. The words "reasonable cause" implies an inquiry. This inquiry is to be held after issuing a notice to the parties concerned. The parties are entitled to place materials before the officer. The approach of the officer must be a judicial one and the function which he discharges under this subsection is a judicial function. If this is not the interpretation of sub-section (3) of section 36 the same would be rendered invalid and it is the duty of the court to interpret a provision in such a way as to avoid illegality, if such a construction is reasonably possible. Sub-section (3A) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at when the tax is not wholly paid for a quarter as required by the provisions of section 38 of the Act. To put it in other words, it would not cover the case where the amount of tax is paid in part as required under the provisions of section 38 of the Act. In a case where the amount of tax is paid partly per quarter as required by section 38 of the Act the case must fall within the provisions of sub-section (3) of section 36 of the Act. To interpret in any other way would lead to this that the cases of a dealer who fails to pay whole or part of the amount of the tax for a quarter would be covered by both the subsections. Such an interpretation cannot be accepted for obvious reasons. Having construed the provisions of sub-section (3) and sub-section (3A), we will refer to the facts of the present case. It is admitted that the total amount due towards the tax in the quarter ending with 30th June, 1968, which was payable by the petitioner was Rs. 45,657. Towards this amount which was due from the petitioner, he had paid Rs. 20,655.93. Therefore, in the present case only a part-payment of the tax had been made and obviously the provisions of section 36(3A) cannot be attracted. Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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