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TMI Blog2015 (9) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in imposing penalty on him for the subject month. The previous conduct of the dealer is not an irrelevant factor in deciding whether or not penalty should be imposed on a dealer. We may not be understood to have held that in all cases where penalty is imposed, the previous conduct of the dealer should be taken into consideration. All that we have held is that the authority cannot be said to have acted illegally if, while exercising his discretion to impose penalty, he has taken the previous defaults of the dealer, in making belated payment of tax to the State, into consideration. Section 16(3) of the APGST Act requires the dealer to pay interest, at the stipulated rate, for belated payment of tax, penalty or any other amount due under the Act. Interest is levied for the period of the delay. The very fact that interest is also levied for belated payment of the penalty amount, goes to show that levy of "interest" is not in substitution of the penalty which can be imposed under section 15(4) of the Act. The petitioner's contention that, as interest is leviable under section 16(3) of the Act, penalty should not be imposed under section 15(4)(a) of the Act is, therefore, not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax; and, hence, it was just and proper to take action under section 15(4)(a) of the Act, and levy penalty equal to the tax amount of ₹ 9,10,260.80. Aggrieved thereby, the petitioner preferred an appeal to the Appellate Deputy Commissioner. In his order dated October 23, 1996, the Appellate Deputy Commissioner noted the admission of the authorized representative, appearing on behalf of the petitioner, that they had charged sales tax separately in their sales invoices issued to their purchasers. The Appellate Deputy Commissioner held that that they did not argue against the levy of penalty prescribed under section 15(4)(a) of the Act; they were habitual infiling returns belatedly; and they were not prompt in the submission of their returns. Having regard to the fact that (1) sales tax was charged in the sales invoices issued by the petitioner, and (2) belated filing of the returns earlier were also noticed in respect of the petitioner, the Appellate Deputy Commissioner saw no scope to interfere with the impugned penalty proceedings as no evidence was placed before him to show that the petitioner had sought time for payment of the taxes due for the month of February, 1996. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, that the dealer had collected tax from the purchasers, and levy of penalty by the Commercial Tax Officer was only under section 15(4) (a) of the Act; both the assessing authority and the Appellate Deputy Commissioner had considered the conduct of the dealer, and had come to the conclusion that they were accustomed to filing returns belatedly; and they were not paying taxes in time, without any justifiable reason. In view of this finding, and as imposition of penalty was under section 15(4)(a) of the Act, the Tribunal saw no ground to interfere with imposition of penalty for a sum equal to the tax due under the Act. After referring to the judgment of the Supreme Court, in Hindustan Steel Ltd. [1970] 25 STC 211 (SC), the Tribunal held that imposing penalty was a quasi-criminal proceeding; and it would not, ordinarily, be imposed unless the dealer acted deliberately, and dishonestly. After noting the contention, urged on behalf of the petitioner, that non-payment of tax for the month of February, 1996 was not a deliberate act but was due to financial stringency, the Tribunal held that the vague plea of financial stringency was no justification for non-payment of tax in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e due date, and has not paid the collected tax to the State, which would fall within the ambit of section 15(4)(a) of the Act; the word charged in section 15(4)(a) of the Act mustbe read as charged and collected ; it is only if a dealer has collected the tax charged would clause (a) of section 15(4) of the Act be attracted; in cases where the assessee has either not charged his customers to tax, or has not collected tax from his customers even though he had charged them to tax, clause (b) alone is attracted and not clause (a); it is only if a dealer has collected tax, and has not paid it to the State, is he liable to pay penalty under section 15(4)(a); the finding of the Tribunal, that the petitioner had collected tax from their customers, is perverse and is based on no evidence; while there is no discretion conferred on the authority to reduce the penalty in cases where clause (a) of section 15(4) of the Act is attracted, such a discretion is available to the assessing authority under clause (b) of section 15(4) of the Act; the past conduct of the petitioner cannot form the basis for levying penalty; for belated payment of tax in any of the earlier months, the assessing authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed by the petitioner before the Tribunal, to show that they had not collected tax before the due date of payment, the finding recorded by the Tribunal to the contrary cannot be said to be perverse or based on no evidence; a finding of fact does not, save perversity or no evidence, give rise to a question of law; even other wise the words used in section 15(4)(a) of the Act is charged ; reading the words collected into the said provision would amount to judicial legislation, and is impermissible; the word charged cannot be read as charged and collected ; the mere fact that interest can be charged, under section 16(3) of the Act, does not disable the Revenue from imposing penalty under section 15(4) of the Act; and the order of the Tribunal does not necessitate interference in these revision proceedings. The question whether the assessee has collected tax or not is a question of fact. Even before the Appellate Deputy Commissioner, the petitioner did not contend that they had not collected tax from their customers before the due date of payment. Even in the grounds of appeal, before the Sales Tax Appellate Tribunal, no such contention was raised. As the question, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 497 (SC). Section 37(1), which related to imposition of penalty for contravention of section 46, read as under: (a) If any person, not being a dealer liable to pay tax under this Act, collects any sum by way of tax, or being a registered dealer collects any amount by way of tax in excess of the tax payable by him, or otherwise collects tax in contravention of the provisions of section 46, he shall be liable to pay, in addition to any tax for which he may be liable, a penalty as follows: (i) where there has been a contravention referred to in clause (a), a penalty of an amount not exceeding two thousand rupees; . . . and, in addition, . . . any sum collected by the person by way of tax in contravention of section 46 shall be forfeited to the State Government. While elucidating the meaning of the words any sum collected the Supreme Court held (page 514 in 40 STC): Section 37(1) does say that 'any sum collected by the person by way of tax . . . shall be forfeited. . .' Literally read, the, whole sum goes to the State. Let us suppose the dealer has returned the whole or part of the collections to the customers. Should the whole amount, regard less of such repa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch collections as are in excess of the tax paid by him for the period during which the collections were made or, in case he has not paid any amount for the period in question, he shall pay over to Government all the amounts so collected by him; and in default of such payment, the amounts may be recovered as if they were arrears of land revenue. The Supreme Court held (pages 742 and 743 in 11 STC): After arguments as regards the proper interpretation of the words 'by way of tax under this Act' occurring in sub-sections (1) and (2) of section 11 had been advanced by the learned counsel on either side on the lines above indicated, it was realised that on the facts of all these cases, there was no 'collection' at all, whether 'by way of tax' or otherwise, so as to bring the amounts received and held by the respondents within the scope of section 11. We have already set out the questions referred, which would clearly indicate that the amounts were received by the Cement Marketing Co., and by the Mysore Spinning and Manufacturing Co., and the Minerva Mills Ltd. only as 'a deposit' to cover a possible contingency of these companies being held liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the sum would be refunded in the contingency of the dealer being held not to be assessable in respect of the relevant turnover. On the facts of these appeals we are unable to hold that there has been any 'collection' by way of tax of any amount under section 11(2) of the Mysore Sales Tax Act, 1948. In Mysore Spinning and Manufacturing Co. Ltd. [1960] 11 STC 734 (SC), the Supreme Court, while considering the scope of section 11(2) of the Mysore Sales Tax Act held that the words collection by way of tax used in section 11(2) did not include amounts received merely by way of deposit; and, where the money was held by the dealer as a mere custodian, it did not render the receipt a collection merely on account of the fact that physical control of money had passed from the depositor to the dealer. While so holding, the Supreme Court made it clear that they should not be understood to have held that collection by a dealer from a purchaser, of amounts not lawfully demanded by him, were not collection within section 11, merely because the purchaser could in law make a claim for refund and enforce that right in appropriate proceedings. Unlike the words collection of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consciously used the word charged and not collected in section 15(4)(a) of the Act. The legislative intent is to impose penalty on a dealer who, having charged his customer to tax, does not pay the tax so charged to the State within the time stipulated. The penal provision under section 15(4)(a) of the Act has not been made contingent on the dealer collecting tax from his customers. As penalty, equal to the tax, is liable to be imposed where a dealer has charged his customer to tax, but has not paid it to the Revenue within the stipulated time, it matters little whether or not the petitioner had collected tax from his customer before the due date of payment of tax to the Government. Unlike clause (b) of section 15(4), which confers a discretion on the competent authority to levy a penalty not exceeding half the amount of tax in any case other than those falling under clause (a) meaning thereby that the penalty which can be levied is up to a maximum of 50 per cent. of the amount of tax and a discretion is conferred on the assessing authority to levy penalty lesser than maximum, clause (a) does not confer any discretion on the competent authority to impose penalty for a sum le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to add something more than what is there in the statute by way of a supposed intention of the Legislature. (Union of India v. Elphinstone Spinning and Weaving Co. Ltd. [2001] 4 SCC 139). The legislative casus omissus cannot be supplied by a judicial interpretative process. (Maruti Wire Industries Pvt. Ltd. v. Sales Tax Officer, First Circle, Mattancherry [2001] 122 STC 410 (SC); [2001] 3 SCC 735). It would be wholly inappropriate for us, therefore, to read the words charged tax in section 15(4)(a) as charged and collected tax . We have no quarrel with the submission of Sri S. Dwarakanath, learned counsel for the petitioner, that section 15(4) of the Act, being a penal provision, must be strictly construed. Strict construction of a penal provision in a taxing statute would require this court, if more than one construction is possible, to adopt the construction favourable to the assessee. Strict construction would not, however, justify reading non-existing words into a statutory provision or to resort to a construction which would cause violence to the language used therein. If, on a plain and grammatical reading of a provision, only one construction is possible, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay tax for the earlier months, while exercising discretion to impose penalty for belated payment of tax in a subsequent month. The previous conduct of the dealer is not an irrelevant factor in deciding whether or not penalty should be imposed on a dealer. We may not be understood to have held that in all cases where penalty is imposed, the previous conduct of the dealer should be taken into consideration. All that we have held is that the authority cannot be said to have acted illegally if, while exercising his discretion to impose penalty, he has taken the previous defaults of the dealer, in making belated payment of tax to the State, into consideration. Section 16(3) of the APGST Act requires the dealer to pay interest, at the stipulated rate, for belated payment of tax, penalty or any other amount due under the Act. Interest is levied for the period of the delay. The very fact that interest is also levied for belated payment of the penalty amount, goes to show that levy of interest is not in substitution of the penalty which can be imposed under section 15(4) of the Act. The petitioner's contention that, as interest is leviable under section 16(3) of the Act, penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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