SHANTILAL SHANKERLAL JAIN Vs. ASSISTANT SALES TAX OFFICER

JUDGEMENT

(1.) HEARD somewhat at length on admission. Rule by consent to be beard forthwith.

(2.) PETITIONER who is otherwise based at Bombay purchased a vessel "l. V. Priyadarshini" for the purpose of scrapping from M/s. V. S. Dempo & Co. Ltd. In the matter of this transaction a penalty of Rs. 12,45,436 had been imposed upon the petitioner under section 7 (3) (ii) of the Goa, Daman and Diu Sales Tax Act, 1964. In the present petition the legality and propriety of the penalty has been challenged. The first respondent, who is the Assistant Sales Tax Officer, by his two separate orders dated February 9, 1990, assessed the petitioner to pay sales tax in a very small amount for the period from January 4, 1989 to March 31, 1989. Thereafter a notice for reassessment under section 18 of the Act as also under Central Sales Tax Act was issued sometime in October 1990. In the reassessment proceedings no orders are passed for any levy of tax under the Sales Tax Act nor it is held out that any turnover has escaped assessment or the turnover assessed or reassessed is liable to tax but a penalty as mentioned above has been levied in the reassessment order. This order was challenged in appeal before the Appellate Commissioner, who rejected the same and an appeal was taken before the Administrative Tribunal. The Administrative Tribunal by certain order admitted the appeal but granted stay subject to the petitioner furnishing security for a sum equal to the penalty imposed in the form of a bank guarantee.

(3.) ACCORDING to the petitioner the sale has taken place in territorial waters of India and the Sales Tax Officer had no jurisdiction to levy and demand any sales tax on such transaction. In any case at the most it can be an inter-State transaction and in that case the Central sales tax that may be attracted is 4 per cent. This, according to him, is also clear when upon the vessel being taken to Bombay the octroi authorities made its own assessment and even held that the Central sales tax payable is 4 per cent. The next contention is that there can be reassessment under section 18 of the Goa Sales Tax Act, but that is in relation to the sales tax and not for the purpose of levying the penalty. In other words the submission is for the purpose of levying the penalty there cannot be any reassessment. Equally forceful is the connected argument that maximum penalty of Rs. 12,45,438 is levied by invoking section 7 (3) (ii) without giving reasons when under that provision the authority must support the penalty by cogent reasons. Shri Nadkarni says that in the absence of reasons there is no justification for maximum penalty. Last but not the least it was urged that the sales tax payable would be on the price of the vessel for which it was sold and which cannot include the customs duties paid on Bill of Entry, for the reasons that the amount corresponding to the customs duty paid cannot be said to make a part of the turnover. Lastly it was urged that in the earlier writ petition instituted by the petitioner being Writ Petition No.201 of 1992 and disposed of by this Court the Division Bench held that the petitioner's Appeal No.1 of 1992 had been already admitted by the Tribunal and being so, the Tribunal could not have now dismissed it by the impugned order without touching its merits.