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TMI Blog2015 (3) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the second Appellate Authority. - What emerges is that the books of accounts had been submitted had not been objected to and were accepted. It further comes on record that there was debit balance in the Companies account as on 31.12.1990 to the tune of ₹ 427.22 Lakhs showing that the company had been not faring well financially and had been incurring heavy losses resulting in erosion of capital. Thus it appears that the lesser payment of taxes is not attributable to a neglect by the company or for that matter a willful one at that. Thus, the observations appearing in the judgment of the Tribunal can hardly be said to hold that the onus lies on the Revenue to establish in the facts and circumstances of the present case wherein the books of accounts which have been submitted have been accepted and not objected to and further that the assessee had been facing the financial difficulties and was considered to be a sick industry. In such an indisputable position the question No.1 as has been framed as a matter of fact appears to have been erroneously framed as it does not appear to be the purport of the Tribunal's judgment to hold that the onus in the circumstances of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent Company had been referred to Board for Industrial and Financial Reconstruction (BIFR, for short) and came to be declared sick w.e.f. 28.6.1991 and various financial concessions were given to the respondent by the Board. It also appears that the Company had been granted installments. 3. The assessee filed returns for financial years 1982-83 and 1989-90 under Bombay Act as well as Central Act. The Assessing Authority has assessed the respondent Company, the assessee, for tax under Section 33(3) of the Bombay Act as well as under Section 9(2) of the Central Act read with Section 33(3) of the Bombay Act for both the financial years. For the year 1982-83 the assessing authority levied penalty under section 36(3) of the Bombay Act at ₹ 1,16,715/and penalty under section 36(2)(c) Explanation of the Bombay Act at ₹ 5,00,000/under the Bombay Act. Under the Central Act by a separate order passed under section 9(2) of the Central Act read with section 36(2)(c) Explanation I of the Bombay Act, the penalty was levied at ₹ 4,00,000/and penalty under Section 36(3) of the Bombay Act was levied at ₹ 1,61,162/. For 1989-90 the Assessing Officer levied a penalty und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting, impose on him, in addition to any tax payable a sum by way of penalty not exceeding twice the amount of tax : Provided that, no penalty under this subsection shall be levied, if the person, dealer or the Commission agent has included the purchase price of such goods in the turnover of purchases as required by subsection (1) or (2) of section 14 or by subsection (2) of section 41 and has paid the tax thereon. (2) If while assessing or reassessing the amount of tax due from a dealer under any provisions of this Act or while passing any order in any appeal, revision or rectification proceedings it appears to the Commissioner or the Tribunal that such dealer has, - (a) failed to apply for registration as required by section 22 or has carried on business as a dealer without being registered in contravention of section 22; or (b) failed without reasonable cause to comply with any notice in respect of the proceedings under section 33, 35, 49 or 57; or (c) concealed the particulars of any transactions or knowingly furnished, inaccurate particulars of any transactions liable to tax, then, the Commissioner or, as the case may be, the Tribunal, may, after giving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of assessment or, as the case may be, reassessment and ending on the date specified in the notice served under the said subsection (4). Explanation - .......... (b) ................ 6. Looking at the circumstances, while taking the decision in the matter the Tribunal appears to have relied on the judgment rendered in Indoswe Engineers Pvt. Ltd. [1996 (Vol.101) STC 177]. The Tribunal appears to have considered that presumptions as occurring under the explanation I are rebuttable ones and further that onus of rebuttal appears to have been discharged by the record. The Tribunal has also taken stock of the amendment to Section 36(2)(c) and explanations under it. 7. It would be appropriate to consider the case referred to by the Tribunal viz. Indoswe Engineers (P) Ltd. Vs. State of Maharashtra reported in 1996 (Vol.101) 177. The questions that had fallen for consideration in the case of Indoswe (supra) were as under : (i) Whether, on the facts and under the circumstances of the case and upon true and correct interpretation of section 55(6)(b) and section 36(2)(c) of the Bombay Sales Tax Act, 1959, the Tribunal was justified in holding that the first appellate authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered that if the amount of set off was considered as tax paid with the returns, the total payment made by the assessee would be more than 80% and with reference to the decision in the case of Commissioner of Sales Tax v. Empico Traders [1981] 47 STC 426 wherein expression tax paid appearing under explanation I was held to be not restricted only to the amount of tax paid by the dealer but would also include set off of amount granted to the dealer. As such the Assistant Commissioner held that explanation I of Section 36(2)(c) is not attracted and penalty could not be levied with the aid of said explanation. The Assistant Commissioner, however, considered that assessee having filed return beyond the prescribed date, the case would be governed by rule of evidence contained in explanation II and penalty can be imposed with reference to the same. He accordingly issued a show cause notice to the assessee. The assessee explained that since tax paid by him is not less than 80% of the tax assessed no penalty is leviable under Section 36(2)(c) and explanationII cannot be looked into for imposition of penalty and he had no jurisdiction for the same. It was further explained that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute........ The Division Bench further quoted the observations of the Supreme Court in the case of Commissioner of Income Tax V. Anwar Ali reported in [1970] 76 ITR 696 It appears to have been taken as settled by now in the sales tax law that an order imposing penalty is the result of quasicriminal proceeding. The Division Bench has observed at the end of the paragraph thus : It is also wellsettled that provisions dealing with penalty should be construed strictly within the term and language of the particular statute and in case of doubt, in a manner favourable to the assessee. If the court finds that the language of a taxing provision is ambiguous or capable of more meaning than one, then the court has to adopt the interpretation which fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumption against him. 9. Taking into account aforesaid background, the observations as were occurring in the judgment of the Tribunal in second appeal appearing in para9 which presumably give rise to question No.1 as has been posed will have to be looked into. As has been considered by the Division Bench while deciding the Indoswe case (supra) the basic burden about concealment of the transactions or inaccurate furnishing of particulars of the transaction is on the Revenue and in case in the assessment it is found that the tax paid by the assessee is less than 80% of the tax assessed, the presumption with regard to failure to disclose such transaction of sale or purchase would arise. In the present case indisputably the books of accounts had been submitted have been accepted and not objected to at all. There is no evidence on record to show that the assessee in fact had failed to disclose any transaction of sale and purchase neither it was pointed out before the first Appellate Authority or for that matter before the second Appellate Authority. 10. The questions have to be answered taking into account effect of the provision on the facts of the matter. The Tribunal has asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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