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TMI Blog2001 (10) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 10(a) and 10(d) of the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act") committed by the three U.K. companies between 1967 and 1973, arising out of different orders passed against the said companies on different dates. The three U.K. companies held registration under the Central Sales Tax Act, 1956 from July 1, 1967, which covered all goods necessary for the business of tea estates specified that the holders could deal, inter alia, in goods under the head "cultivation" and "crop cultivation", which attracted concessional rate of sales tax under section 8 of the Act. 4.. In proceedings numbered as K-1/C, the Sales Tax Officer, Devikulam, came to the conclusion that that one of the U.K. companies was not entitled to purchase goods under the head "cultivation" and "crop protection" as such goods were not necessary for the business of tea. This order was passed in respect of Kannan Devan Hill Produce Co. Ltd. (for short "KDHP"). By the impugned order made on August 25, 1966 the Sales Tax Officer disallowed those goods for the purpose of section 8 of the Act. The certificate of registration which allowed the purchase of these goods ought to have been taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .K. companies to show cause thereagainst. 7.. The violations of the provisions of the Act alleged against the three U.K. companies were in respect of goods purchased during the years 1967-68 to 1972-73. By separate orders made on August 15, 1975, the Sales Tax Officer overruled the objections of the three U.K. companies and imposed a penalty of 15 per cent on the value of each year's purchase of goods. The orders imposing penalty for the alleged violation of section 10(a) and 10(b) of the Act were challenged by writ petitions by the three U.K. companies before this Court. Those writ petitions were allowed and the orders imposing penalty were quashed by different orders of this Court which directed the Sales Tax Officer to reconsider the case and pass fresh orders after giving to the said companies an opportunity of being heard. Thereafter, the Sales Tax Officer issued notices on May 31, 1988 to the present petitioner, heard the matters and made orders in July and September, 1988, almost ten years after the first batch of petitions were disposed of, and fifteen years after the offences alleged to have been committed. The present petitioner opposed the notices as untenable on sev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition, no counter-affidavit was filed by the department. Thus, the learned single Judge had to proceed on the footing that the averments made in the original petition were uncontroverted. 10.. Turning the first question of delay, it is urged by the Senior Government Pleader, Mr. Roy Chacko, that there is no absolute proposition of law that a penalty cannot be levied after a considerable period of time, in the absence of any statutory prescription of limitation for such action. He contends that what is reasonable is always a question of fact, and, in the facts and in the circumstances of the case, merely because the notice was issued after about 10-12 years after the date of first remand, and about 16 years after the commission of the offence, it does not lead to a conclusion that the penalty orders were unreasonably delayed or should be interfered with on that count. He cited in support a judgment of a learned single Judge of this Court in Swamy Brothers v. Assistant Commissioner of Sales Tax (Assessment), Special Circle [1988] 71 STC 233. 11.. It is true that, there is no absolute proposition of law that delay would necessarily render a penalty proceedings bad, in the absenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e three U.K. companies were the ones who issued the C forms. A reading of section 10(a) and 10(b) of the Act suggests that any person who has committed the acts described thereunder is liable for a penalty. Another interesting feature is that penalty under section 10A of the Act is "in lieu of prosecution". Thus, it could be levied only in circumstances which could have warranted prosecution for the offences under sections 10(a) and 10(b) of the Act. If the respondent was not liable to be prosecuted for those offences, as it was not the offender, there was no question of imposing the penalty in lieu of prosecution under section 10A of the Act on the respondent. The fact that the present respondent took over the business of the tea estates by sale deeds of December 31, 1976 and April 19, 1977 is not in dispute. In these circumstances, we are of the view that the contention urged by the learned counsel for the department must fail. The respondent could not have been held guilty of offences under sections 10(a) and 10(b) and liable for prosecution for the offences committed by the transferor-U.K. companies and therefore, the respondent could not have been subjected to the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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