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TMI Blog2004 (2) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... r before a larger Bench to determine whether the Commissioner of Sales Tax has the jurisdiction or competence to impose, in course of proceeding under section 39(2) of the M.P. General Sales Tax Act, penalty under section 43 of the Act in view of the fact that the assessing officer has not passed any order in that behalf, in course of original assessment. 2.. As we intend to finally dispose of the matter and the learned counsel for the parties have no objection for the same and further there is no impediment in that regard it is requisite to state the facts in brief. The respondent-assessee was assessed to entry tax under the M.P. Entry Tax Act (Act No. 52 of 1976) and the said tax was levied and deducted in accordance with the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-assessee. 4.. It is contended by Mr. Jha, learned Deputy Advocate-General for the appellant, that the division Bench decision rendered in the case of Babulal Banwarilal (1984) 17 VKN 63 does not lay down the correct law inasmuch as the said Bench has not taken note of the provision contained in section 43(1) of the Act. Learned counsel for the State propounded that in the case of Uma Medical Stores (1993) 10 TLD 398; (1993) 26 VKN 9 (MP) the division Bench has taken note of section 43 of the Act and has correctly come to hold that the proceeding for penalty can be initiated in exercise of suo motu power of revision under section 39(2) of the Act though there had been no imposition of penalty in course of proceeding of assessment. Mr. Jh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d v. State of Maharashtra [1995] 98 STC 314 (Bom), Deputy Commissioner of Commercial Taxes, Madurai Division, Madurai v. K.M. Thomas Co. [1973] 31 STC 529 (Mad.), State of Tamil Nadu v. Sha Kundanmull Bhavarlal Co. [1993] 90 STC 574 (Mad.), State of Haryana v. Dasaunda Singh Waryam Singh [1996] 103 STC 128 (P H) and Bhavnagar Chemical Works (1946) Ltd. v. Commissioner of Sales Tax, Ahmedabad [1991] 83 STC 409 (Guj). 6.. The crux of the matter is whether initiation of proceeding by the revisional authority under section 39(2) is permissible or is to be annulled because of lack of jurisdiction. To appreciate the submission raised at the Bar it is appropriate to reproduce section 39(2) of the Act. It reads as under: "(2) The Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voided if the return furnished by the dealer had been accepted as correct." 7.. It is noticeable that in the case of Babulal Banwarilal (1984) 17 VKN 63 (MP), the division Bench after referring to section 39(2) held that reading of section 39(2) would go to show that the Commissioner's power of interference under that provision arises if he considers that any order passed therein by any person is erroneous insofar as it is prejudicial to the interest of revenue and, therefore, if there is no order passed in the proceeding the Commissioner has no power under section 39(2) to interfere in suo moto revision. The Bench further observed that the existence of power is a must for exercise of power. In the aforesaid case the division Bench did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of any goods or furnished a false return, he can, after giving the dealer a reasonable opportunity of being heard, impose penalty on him under section 43. It cannot, therefore, be said that the Commissioner acted in excess of jurisdiction because the assessing authority in the original assessment had not taken action under section 43." 8.. At this stage we may refer with profit to a decision rendered in the case of Food Corporation of India v. Commissioner of Sales Tax, M.P. [1998] 109 STC 131 (SC). In the said case a two-Judge Bench of the Supreme Court referred to section 43 and after reproduction of the same in paragraphs 4 and 5 stated thus: "4. It is clear that the power under section 38(5) is to confirm, reduce, enhance or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impose penalty for the first time. True it is, there are certain conditions precedent but presently we are not concerned with the condition precedents. Mr. Nema has also submitted that any proceeding would not mean a proceeding for the first time by the Commissioner. The submission cannot be accepted in view of the law laid down by the Supreme Court in the case of Food Corporation of India [1998] 109 STC 131 (SC). As has been indicated earlier, in the case of Babulal Banwarilal (1984) 17 VKN 63 (MP), the division Bench did not take note of section 43 of the Act; but in the case of Uma Medical Stores (1993) 10 TLD 398; (1993) 26 VKN 9 (MP), section 43(1) was considered and view was expressed. The Supreme Court has already expressed the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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