9911796707
TMI Blog2000 (8) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of inter-State trade and commerce and to the Regional Food Controller under the Rice Levy Scheme. Apart from it the applicant had effected sale of rice amounting to Rs. 13,80,942.65, during the assessment year 1986-87; Rs. 9,12,002.76 during the assessment year 1987-88 and Rs. 5,52,931 during the assessment year 1992-93 through commission agents outside the State of U.P. The applicant claimed that it is not liable to pay any tax on such sales of rice which it had effected outside the U.P. through commission agents. The Sales Tax Officer (A), Mawana, initiated proceedings under section 4-B(6) of the Act on the ground that the applicant being a recognition certificate holder and having purchased paddy from the farmers and also from the registered dealers had claimed exemption from payment of tax on such purchases on the strength of the recognition certificate was not entitled to effect sale of rice manufactured out of such paddy through commission agents outside the State of U.P. The assessing officer vide separate orders for all the three years imposed penalty under section 4-B(6) of the Act. The applicant filed three first appeals under section 9 of the Act before the Deputy C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty proceedings. He further relied upon a decision of the honourable Supreme Court in the case of Brij Mohan v. Commissioner of Income-tax reported in [1979] 120 ITR 1; AIR 1979 SC 1897 and submitted that even the Supreme Court had upheld the levy of penalty where the provisions for levy of penalty has been amended and different quantum of penalty were provided in the old section and the amended section. 5.. For considering the merit of the submissions made by the learned counsel for the parties, the various provisions are reproduced below: Section 4-B(6) of the Act as it stood during the assessment year 1986-87 reads as follows: "(6). Where a dealer, in contravention of the terms and conditions laid down in sub-section (2) for the grant of a recognition certificate, sells or otherwise disposes of the notified goods, for the raw material of which he has been granted such certificate, he shall be liable to pay as penalty such amount, as the assessing authority may fix, which shall be not less than the amount of tax that would have been payable under the provisions of this Act on the sale of such notified goods in the State and not more than three times the amount of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1995 provided for repeal and saving, it did not provide for any saving so far as the omission of section 4-B(6) of the Act is concerned, section 41 of the U.P. Act No. 31 of 1995 is reproduced below: "41. Repeal and saving.-(1) The Uttar Pradesh Sales Tax (Amendment) Ordinance, 1995 (U.P. Ordinance No. 16 of 1995), is hereby repealed. (2) Notwithstanding such repeal anything done or any action taken under the provisions of the principal Act as amended by the Ordinance referred to in sub-section (1) or by the Uttar Pradesh Sales Tax (Amendment) Ordinance, 1994 (U.P. Ordinance No. 7 of 1994) or by the Uttar Pradesh Sales Tax (Amendment) (Second) Ordinance, 1994 (U.P. Ordinance No. 21 of 1994) shall be deemed to have been done or taken under the corresponding provisions of the principal Act as amended by this Act as if the provisions of this Act were in force at all material times." 7.. According to the learned counsel for the applicant since U.P. Act No. 31 of 1995 did not provide for any saving in respect of section 4-B(6), the entire proceedings under section 4-B(6) of the Act taken by the assessing authority was wholly without jurisdiction. He referred to the observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ably inferred that the intention of the Legislature is that the pending proceeding shall not continue but a fresh proceeding for the same purpose may be initiated under the new provision. 39.. In the present case, as noted earlier, section 6 of the General Clauses Act has no application. There is no saving provision in favour of pending proceedings. Therefore, action for realisation of the amount refunded can only be taken under the new provision in accordance with the terms thereof." 8.. It may be mentioned here that present case is not of omission of any rule but omission of a sub-section, namely 4-B(6) of the Act. Section 6(c) and (d) of the U.P. General Clauses Act saves any liability incurred or any penalty incurred in respect of any offence committed against any enactment so repealed. Section 6(c) and (d) of the U.P. General Clauses Act is reproduced below: "6. Effect of repeal.-Where any Uttar Pradesh Act repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not- (a).......................... (b)........................... (c) affect any right, privilege, obligation or liability acquired, accru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sugar Works Ltd. (2000) 1 JT 453 (SC), is not applicable to the facts of the present case inasmuch as in the said case, the honourable Supreme Court was considering a case where a rule has been omitted and not where an Act has been repealed. When we look to section 41 of U.P. Act No. 31 of 1995 which deals with the saving clause, it does not deal with any rights or liabilities incurred under the omitted section 4-B(6) of the Act. Applying the principles laid down by the honourable Supreme Court in the case of Commissioner of Income-tax v. Shah Sadiq and Sons [1987] 166 ITR 102; AIR 1987 SC 1217, the liabilities and penalties incurred under the omitted section 4-B(6) are not destroyed by section 41 of U.P. Act No. 31 of 1995 and, therefore, the penalty proceedings under the omitted section 4-B(6) is saved and the penalty proceedings initiated by the assessing officer cannot be said to be without jurisdiction. 10. Further by the same Amending Act, viz., U.P. Act No. 31 of 1995, section 4-B(5) was substituted and clause (b) of the substituted section 4-B(5) contained similar provisions which was there in the earlier section 4-B(6) of the Act. Thus, the submission made by the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding Act with effect from the same date and it contained the similar provision as was contained in the omitted section 4-B(6). Thus, it is a case of quoting a wrong provision in the notice and the principles laid down by the honourable Supreme Court in the case of L. Hazari Mal Kuthiala [1961] 41 ITR 12 would be applicable. Thus, there is no infirmity in the notices issued for imposing penalty under section 4-B(6) of the Act. It may also be mentioned here that the notice issued under section 4-B(6) recited and gave particulars of alleged offence committed by the applicant and, therefore, the applicant was very well aware and given an opportunity to meet the case. 12.. The learned counsel for the applicant then submitted that rice was not a notified commodity so as effecting sale on consignment basis outside the State of U.P. may make it an offence liable to penalty under section 4-B(6) of the Act. He submitted that there was no notification issued under section 4-B(2) of the Act prior to August 29, 1987 notifying rice as notified commodity under section 4-B(2) of the Act. He referred to the notification dated August 31, 1977 which was modified on March 19, 1979 and submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paddy on consignment basis outside U.P. which was not permissible under section 4-B(2) of the Act the exemption could not have been allowed and there was no justification for initiating penalty proceedings. At the time of making the purchase, the liability for payment of purchase tax is attracted, though it is imposed at the time of making assessment. The rice manufactured out of paddy purchased in a particular assessment year may or may not have been sold in terms of section 4-B(2) of the Act. It is only when the assessing officer comes to the conclusion that the recognition certificate holders have contravened or violated the terms and conditions of the recognition certificate that proceedings for levy of penalty under section 4-B(6) are initiated. Thus, it is not correct to say that in the present circumstances, penalty under section 4-B(6) of the Act should not have been leviable. 14.. Learned counsel for the applicant next submitted that the applicant had made an application for granting exemption under section 4-A of the Act and was granted exemption for the period October 18, 1984 to March 31, 1986. It had made an application for review claiming exemption up to October 18, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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