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TMI Blog1997 (8) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act by rejecting the plea that it can only be legally made under section 33(5) of the Bombay Sales Tax Act, 1959 and consequently holding that the provisions of section 36(2)(c), Explanation (1) are attracted?" 2.. The assessee, M/s. Metcon Engineering Works, is a manufacturer of fibre sheets, rubber hose pipes, etc. It is a dealer registered both under the Bombay Sales Tax Act, 2959 ("the Bombay Act") and the Central Sales Tax Act, 1956 ("the Central act"). The assessee filed returns of its turnover for the financial year 1978-79 with the Sales Tax Officer concerned. In its returns under the Bombay Act, the amount of tax shown due was Rs. 21,067 and after adjusting the set-off, the net amount of tax payable by the assessee was shown as Rs. 12,520. The assessee however deposited only a part of the amount due and payable by it as per its return. The amount so deposited was only Rs. 6,520. The balance tax amounting to Rs. 6,000, though admitted, was not paid by the assessee till the assessment was made by the Sales Tax Officer. Similarly, in its return for the same period under the Central Act, though the tax due as per the return was Rs. 10,103, the assessee deposited Rs. 6, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee reiterated its contention that section 36(2)(c) or explanation (1) thereto were not attracted to the case of the assessee inasmuch as there was neither any concealment of turnover or the particulars thereof nor furnishing of inaccurate particulars of any transaction. The case of the assessee was that it had maintained regular books of account which were duly accepted by the Sales Tax Officer. According to the assessee, the only default on its part was its failure to pay the full amount of tax due as per the returns within time which did not fall within the purview of section 36(2)(c) of the Bombay Act. The alternate contention of the assessee was that though, there being no concealment of the particulars of any transaction or failure to furnish accurate particulars, section 36(2)(c) was not attracted, even assuming that it was attracted by virtue of explanation (1) thereto, the assessee should be deemed to have rebutted the presumption of concealment because admittedly there was no concealment. The Tribunal did not accept any of these contentions of the assessee and held that the provisions of section 36(2)(c) were applicable as the amount of tax paid by the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars thereof. He, however, submitted that despite that, penalty could be levied under section 36(2)(c) of the Act by taking resort to Explanation (1) appended to the said clause which provides that if the total amount of tax paid by the dealer is found to be less than 80 per cent of the amount of tax assessed, then for the purpose of clause (c), the assessee shall be deemed to have concealed the turnover or knowingly furnished inaccurate particulars of turnover. 6.. We have carefully considered the rival submissions. The real controversy is whether section 36(2)(c) of the Act, which provides for imposition of penalty in cases of concealment of any transaction or furnishing of inaccurate particulars of any transaction, can be applied to a case of failure to pay the amount due as per return within the time required by the law by taking resort to Explanation (1) thereto. In other words, whether failure to pay tax as per return or any part thereof can be regarded as a case of concealment of turnover within the meaning of section 36(2)(c) of the Act in view of the well-settled legal position that an order imposing penalty being the result of quasi-criminal proceedings, the provisions d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove provision that the gist of offence is that (i) the assessee has, concealed the particulars of any transaction or (ii) knowingly furnished inaccurate particulars of any transaction liable to tax. On commission of such an offence being established, the assessee would be liable to a penalty to the extent of one and one-half times the amount of the tax. The two explanations appended thereto in no way affect the above ingredients of the offence under section 36(2)(c) of the Act. They merely create legal fiction if the conditions of their applicability are satisfied and enact a rule of evidence. Explanation (1) creates a legal fiction and brings an assessee straightaway within the ambit of section 36(2)(c) on the existence of stipulated difference between the tax paid and the tax assessed. It is then not necessary for the Revenue to prove the positive element required for concealment. The onus will be shifted to the Revenue even where Explanation (1) applies, if the assessee can satisfy the authority concerned by producing necessary evidence that he was not guilty of gross or wilful neglect. In such case, if the revenue does not adduce any further evidence, penalty under section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax: Provided that, the Commissioner, or any appellate or revisional authority, may remit the whole or any part of the penalty payable in respect of any period. On a conjoint reading of the two provisions contained in section 36 itself, viz., clause (c) of sub-section (2) and sub-section (3), it is clear that the Legislature has made two different provisions for imposition of penalty in case of two different defaults-one in clause (c) of sub-section (2) of section 36 for imposition of penalty for concealment of turnover or furnishing of inaccurate particulars of turnover and other for failure to pay the tax within the time stipulated under the law. 8.. Obviously, the instant case is not a case of concealment of turnover, etc., but a case of failure to pay the tax within the time required under the provisions of the Act. Admittedly, the assessee submitted the returns, showed the tax due from him on the basis thereof but failed to pay the full amount due from him within the time he was required by the law to pay the same. 9.. The law regarding payment of tax is contained in section 38 of the Act which provides that: (1) Tax shall be paid in the manner herein provided and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the penalty payable in respect of any period under sub-section (3) of section 36 of the Act. 10.. The uncontroverted factual position in this case is that the assessee failed to pay the full amount of tax before the submission of return which he was required to pay under the provisions of section 38 of the Act read with rule 29 of the Rules. Only a part of the tax payable was paid within the stipulated time. There was delay in paying the balance. For such delay, in the event of his failure to show reasonable cause for the delay, he might have been liable to penalty under sub-section (3) of section 36 at the rates set out in clauses (a) and (b) thereof. Admittedly, that was not done in this case. On the other hand, penalty has been imposed under section 36(2)(c) of the Act at the rates specified therein on an erroneous assumption that it was applicable even to cases of non-payment of tax due as per return. That being so, the order of penalty imposed under section 36(2)(c) of the Bombay Act is not tenable in law. Similarly, penalty imposed under the Central Act under the said section read with section 9(2A) of the Central Act is equally untenable. In the facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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