BALAJI COTTON COMPANY Vs. SALES TAX OFFICER

JUDGEMENT

(1.) THE question that arises for consideration in this writ petition relates to the scope of the power of the Sales Tax Officer to impose penalty afresh once the same has been set aside on appeal by the appellate authority under section 55 of the Bombay Sales Tax Act, 1959 ("the Act" ).

(2.) THE facts of the case in brief are : the petitioner, a registered dealer under the Bombay Sales Tax Act, was assessed by the Sales tax Officer, Wardha, for the period from October 20, 1971 to November 5, 1972, by his order dated September 24, 1973. By the said order, in addition to the amount of tax due which was determined at Rs. 1,42,249. 02, penalty of Rs. 45,000 was also imposed on the petitioner under section 36 (2) (c) of the Act for non-payment of the tax with the return. On appeal, the order, so far as it related to imposition of penalty of Rs. 45,000, was set aside by the Assistant commissioner of Sales Tax (Appeals), Eastern Division, Nagpur, by his order dated September 26, 1975. The Assistant Commissioner held that the order had been passed in violation of principles of natural justice and there was total non-application of mind by the Sales Tax Officer and, as such, the same could not be sustained. The imposition of penalty was, held to be void and illegal and, therefore, set aside. The other part of order of the Sales Tax Officer, so far as it related to the assessment of the tax, was confirmed. It was observed that after adjusting payments made by the petitioner, the balance amount of tax determined by the Sales Tax Officer should be recovered in accordance with law. On receipt of the aforesaid order of the Assistant commissioner, setting aside the penalty, the Sales Tax Officer issued a fresh notice to the petitioner, being notice dated February 11, 1976, directing it to show cause as to why for non-payment of tax along with the return for the same period for which penalty had been imposed earlier, penalty of Rs. 45,000 should not be imposed under section 36 (2) (c), explanation 1. The explanation of the petitioner was sought for within three days. As the petitioner could not submit the explanation within that period, by an order dated April 7, 1976, penalty of Rs. 45,000 was again imposed on the petitioner under section 36 (2) (c) of the Act. The petitioner preferred appeal before the Assistant Commissioner of Sales Tax (Appeals) II, Nagpur division, Amravati. The said appeal being dismissed, the petitioner preferred second appeal before the Maharashtra Sales Tax Tribunal. The Tribunal, after hearing the parties, set aside the order of penalty on the ground of violation of principles of natural justice. Undeterred by the order of the Tribunal setting aside the order of penalty, the Sales Tax Officer issued a fresh show cause notice. The petitioner showed cause and objected to the proposed action of the Sales Tax officer. The Sales Tax Officer, however, by his order dated July 30, 1982, for the third time levied the penalty of Rs. 45,000 on the petitioner under section 36 (2) (c), Explanation 1 for the very same period and the very same alleged default for which penalty had been levied on earlier two occasions and set aside by the appellate authorities. This time, the petitioner did not go in appeal but challenged the order directly before this Court by filing the present writ petition under article 226 of the Constitution.

(3.) WE have carefully considered the facts of the case. It is not necessary for the present purpose to go into the merits of the alleged default or the quantum of penalty. What is required to be determined is the power of the Sales Tax Officer to impose a penalty afresh once its order imposing penalty has been set aside by the appellate authority under section 55 of the Act. For that purpose, we may refer to the provisions of sub-section (6) of section 55 of the Act which deals with the powers of the appellate authority. It provides :