INDOSWE ENGINEERS (P) LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) By this reference under section 61(1) of the Bombay Sales Tax Act, 1959 read with section 9(2) of the Central Sales Tax Act, 1956, Made at the instance of the assessee, the Maharashtra Sales Tax Tribunal has referred the following questions of law to this Court for opinion :

(2.) The assessee M/s Indoswe Engineers (P) Ltd. is a manufacturer of non-ferrous extrusions and extruded products. It is registered as a dealer both under the Bombay Sales Tax Act, 1959 ("Bombay Act) and the Central Sales Tax Act, 1956 ("Central Act). It was assessed for the period 1-7-1977 to 30-6-1978 under both the Bombay Act and Central Act by the Sales Tax Officer, Pune on 31-12-1981. The tax position as per the assessment orders passed by the Sales Tax Officer is as under :

(3.) In the course of assessment proceedings, the Sales Tax Officer noticed that (i) the assessee had filed all the returns late and taxes were paid late and (ii) the amount of tax paid with the returns was less than 80 per cent of the amount of tax assessed and, therefore, the assessee was liable to penalty under section 36(3) and under section 36(2)(c), Explanation (1) of the Act. The Sales Tax Officer, therefore, issued two separate notices, one under section 36(3) and another under section 36(2)(c), Explanation (1). The notices were replied by the assessee on 24-12-1981. In regard to penalty under section 36(3), it was stated by the assessee that the taxes could not be paid in time due to financial difficulties caused by labour trouble, strikes, credit squeeze etc. In regard to penalty under section 36(2)(c), it was stated that the extra dues had arisen for the following reasons :