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TMI Blog1992 (4) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the penalty imposed under section 16(1)(j) of the Act from Rs. 8,000 to Rs. 2,000? Brief facts of the case are that the assessee is a dealer in electric goods and steel pipes. During the period April 12, 1981 to April 1, 1982, i.e., 1981-82 the assessee has effected the sale of Rs. 1,05,030 to the Executive Engineer, P.H.E.D. of steel pipes on which 4 per cent tax was shown payable in the return. At the time of assessment, it was found by the assessing authority that the assessee has collected 10 per cent tax and the tax at 4 per cent only was deposited. It was stated before the assessing authority that there is a dispute with regard to the rate of tax with the buyer. The assessing authority levied penalty for evasion of tax by submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at 10 per cent. The levy of interest was set aside on the ground that the tax has been held payable at 4 per cent, which has already been deposited and as such interest is not leviable. The appellate authority also observed that in respect of the amount retained by him, the provisions of section 23-B could be invoked. Against the above order, the appeals were preferred before the Rajasthan Sales Tax Tribunal by the assessee as well as by the assessing authority. The Sales Tax Tribunal came to the conclusion that the maximum penalty leviable under section 16(1)(j) is Rs. 2,000 and therefore, the penalty of Rs. 8,000 cannot be upheld. The reasoning for upholding penalty to the extent of Rs. 2,000 was that though the assessee has collected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exceeding Rs. 2,000 could be levied by way of penalty. The authority relied upon by Mr. Bafna refers that the forfeiture is a kind of penalty and the word "forfeited" may bear meaning "liable to forfeiture" at the will of the person to whom the right of forfeiture is given and does not, in every case, imply automatic forfeiture. It has further been observed that the Commissioner will issue a notice to the assessee to show cause why a penalty, with or without forfeiture, should not be imposed on him. Such a notice with specific reference to forfeiture, points to an option in the Commissioner to forfeit or not to forfeit or partly to forfeit. From the above observations of the Supreme Court, it is evident that though the action of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (Words and Phrases, page 274). On the basis of this decision, the Supreme Court has held that "collected" will not cover the amounts gathered tentatively to be given back if found non-exigible from the dealer. From the above judgment of the honourable Supreme Court, it is evident that the proceedings for forfeiture and penalty are separate and show cause notice is required to be issued to the assessee as to why penalty with or without forfeiture should not be imposed. There may be circumstances, where it could be considered that the amount had not been collected by the assessee, since it had already been refunded or that he is ready to return, in that case no action for forfeiture shall be taken. There may be cases where there can be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is any wrong submission of particulars in the return. The Deputy Commissioner (Appeals) and the Sales Tax Tribunal have held that there was no mens rea and no offence under section 16(1)(e) has been committed by the assessee. If the amount has been collected on a particular transaction at a rate higher than payable, then it is not an offence under section 16(1)(e) and as discussed above, it will depend on the facts and circumstances of the case as to whether the offence under section 16(1)(j) has been committed or not. In the present case, penalty under section 16(1)(j) was upheld and as such it could not be said that any offence under section 16(1)(e) has been committed. The particulars given in the return were correct and there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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