AUTOMOTIVE REFRIGERATION CO Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) This is a reference on a case stated by the Sales Tax Tribunal under section 61(1) of the Bombay Sales Tax Act, 1959 (referred to hereinafter as "the said Act"). The question submitted to us for determination in this reference is as follows : "Whether on the facts and in the circumstances of the case the Tribunal was correct in holding that the expression 'the total amount of tax paid by the dealer for any year' used in the explanation to section 36(2)(c) of the Bombay Sales Tax Act, 1959 did not include any amount paid by an assessee after filing of the returns but before passing of the assessment order ?"

(2.) The facts giving rise to the said question are as follows : The applicant-firm, a registered dealer under the said Act, while filing its returns for the period 1st April, 1970 to 31st March, 1971 had claimed resales to the extent of Rs. 3,99,227. No tax was paid along with the returns. In the registers kept by the dealer, the resale quantum was shown at Rs. 2,93,268. After the commencement of the assessment proceedings, but before the passing of the order of assessment by the Sales Tax Officer, the applicant-assessee paid an amount of Rs. 5,934.25 towards sales tax for the aforesaid period. The payment of this amount was made on 4th July, 1973. As per the order of assessment which was passed on 17th July, 1973 taxes due were determined at Rs. 6,034 and after giving credit for the aforesaid amount of Rs. 5,934.25 paid on 4th July, 1973 the balance tax due was determined at Rs. 99.77 (this is admitted by both counsel as the correct figure, although there is a slight error in this connection in the statement of facts). The Sales Tax Officer issued a notice dated 10th August, 1973 under section 36(2)(c) of the Act calling upon the dealer to show cause why a penalty under the explanation to the said section should not be imposed and after hearing the dealer, the Sales Tax Officer imposed a penalty of Rs. 2,604 under the explanation to section 36(2)(c) of the Act by his order dated 16th September, 1974. The appeal preferred by the dealer to the Assistant Commissioner against the order imposing penalty was dismissed. The dealer then preferred a second appeal to the Sales Tax Tribunal. The contention of the dealer before the Tribunal was that the amount of Rs. 5,934.25 paid on 4th July, 1973 formed part of the total amount of tax paid by the dealer for the period in question, and if that amount was taken into consideration, the difference between the tax assessed and the tax paid would be less than 20 per cent. and the first explanation to section 36(2)(c) of the said Act was not attracted. It may be mentioned here that the penalty was imposed on the basis of the presumption provided for under the said explanation which we propose to discuss a little later. This contention was rejected by the Tribunal. The question set out above arises from this decision of the Tribunal.

(3.) Before going into the contention of the respective counsel, it would not be out of place to refer to the relevant provisions of the said Act as they stood at the material time. Section 32 of the said Act deals with the filing of returns and provides that every registered dealer shall furnish returns for such period by such date and to such authority as may be prescribed. Section 33 deals with assessment. Section 38 of the said Act provides for payment to tax, deferred payment of tax and so on. Sub-section (2) of section 38 provides inter alia that a registered dealer furnishing returns as required by sub-section (1) of section 32, shall first pay into a Government treasury, in the manner prescribed, the whole of the amount of tax due from him according to such return. Rule 22 of the Bombay Sales Tax Rules, 1959 provides for the submission of returns and the form in which the returns have to be furnished. The form in which the returns had to be submitted in Form N-18, and it is common ground that a chalan showing the payment of the tax as per the return had to be submitted along with the return. Rule 29 provides for the time for payment of taxes and the manner in which the payment has to be made. Section 36 of the said Act deals with the imposition of penalty in certain cases and bar to prosecution. The relevant portion of sub-section (2) of section 36, as it stood at the material time provided as follows :