COMMISSIONER OF SALES TAX Vs. MODERN MERCANTILE WORKS

JUDGEMENT

(1.) This reference under section 34(1) of the Bombay Sales Tax Act, 1953, has been made at the instance of the Commissioner of Sales Tax. The respondent-firm, which is the assessee in this case, is a sole proprietary concern of which up to 20th December, 1963, the sole proprietor was one R. A. Parikh. Parikh died on 20th December, 1963, leaving him surviving as his heir and legal representative his widow. After Parikh's death his widow continued the business of the respondent-firm. The respondent-firm was registered as a dealer under the Bombay Sales Tax Act, 1953 (hereinafter referred to as "the 1953 Act"), and was at all material times registered as a dealer under the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the 1959 Act"). For the period 1st April, 1959, to 31st December, 1959, the respondent-firm was assessed to sales tax by the Sales Tax Officer by his assessment order dated 13th June, 1962. On 13th December, 1963, the Assistant Commissioner of Sales Tax served a notice of suo motu revision under section 31(1) of the 1953 Act calling upon the respondent-firm to show cause why the said order of assessment should not be revised as to impose penalty under section 16(4) of the 1953 Act for late payment of tax in respect of the last quarter of the year 1959. Before the Assistant Commissioner of Sales Tax a contention was raised on behalf of the respondent-firm that after the death of the said Parikh, penalty proceedings could not be continued or taken against his legal representative, namely, his widow, and no penalty could be imposed upon her. This contention was negatived by the Assistant Commissioner who, by his order dated 22nd September, 1964, imposed a penalty under the said section 16(4) in the sum of Rs. 8,690.31. The appeal filed by the respondent-firm to the Deputy Commissioner of Sales Tax proved unsuccessful, and the respondent-firm thereupon approached the Tribunal in revision. The Tribunal upheld the contention of the respondent-firm and held that the provisions of the 1959 Act could not be invoked to sustain the impugned order of penalty, and set aside the said order. It is out of this judgment and order of the Tribunal that this reference arises. The question referred to us by the Tribunal is : "Whether, in the facts and circumstances of the case, the Tribunal was justified in law in holding that the respondents' case is not governed by the provisions of section 19 of the Bombay Sales Tax Act, 1959, notwithstanding the fact that the deceased dealer, liable to pay the tax under the Bombay Sales Tax Act, 1959, died after the Bombay Sales Tax Act, 1959, came into force ?"

(2.) The question as framed by the Tribunal does not bring out the real controversy between the parties and we, accordingly, reframe the question as follows : "Whether, in the facts and circumstances of the case, the Tribunal was correct in law in holding that by reason of the provisions of the Bombay Sales Tax Act, 1959, penalty under section 16(4) of the Bombay Sales Tax Act, 1953, could not be imposed on the legal representative of a dealer who died after the coming into force of the Bombay Sales Tax Act, 1959, in a case where the legal representative continues the business of such dealer after his death ?"

(3.) Both learned counsel are agreed that under the 1953 Act there was no provision whereunder any penalty under section 16(4) could be levied upon the legal representative of a deceased dealer. It may be mentioned that this is also the view taken by a Division Bench of this High Court in Commissioner of Sale Tax v. Allimullah Haji Salamat [[1968] 22 S.T.C. 165]. That was, however, a case in which the dealer died prior to 1st January, 1960, being the date on which the 1959 Act came into force. Before us, Mr. Bhabha, the learned counsel for the applicant, has submitted that by reason of the provisions of the 1959 Act the legal position has altered and a new liability has been created under the 1959 Act whereby penalty for late payment of tax due under the 1953 Act by a deceased dealer who dies after the coming into force of the 1959 Act would be imposed upon his legal representative. In support of his submission, Mr. Bhabha has relied upon the preamble to the 1959 Act as also upon the wordings of sections 19(1) and 34 of the 1959 Act. As the long title of the 1959 Act and its preamble show, the 1959 Act is a consolidating and amending Act. Prior to the coming into force of the 1959 Act, there were several Sales Tax Acts in force in the reorganised State of Bombay, and in order to assimilate these different Acts into one uniform code for the whole of the State, the 1959 Act was enacted. By section 76 of the 1959 Act all the Sales Tax Acts in force prior to the date of coming into force of the 1959 Act, namely, 1st January, 1960, which date is referred to in the 1959 Act as the "appointed day", were repealed. A consolidating Act is one which codifies and consolidates existing law, but a consolidating and amending Act does not merely codify or consolidate. It also amends and alters the law as then existing. It, however, does not follow that any amendment made by a consolidating and amending Act in the state of the law till then prevailing has been made with any retrospective effect. Whether any such alteration in the law has retrospective effect or not is to be judged in the same way as in the case of any other amending provision, namely, by ascertaining whether a retrospective effect was intended to be given to the amending provision by the amending statute. Before, therefore, examining the language of sections 19(1) and 34 of the 1959 Act, relied upon by Mr. Bhabha, it is necessary to consider the repeal and saving clauses of the 1959 Act. Section 76 of the 1959 Act repeals all the Sales Tax Acts previously in operation in the reorganised State of Bombay, which are compendiously described in the 1959 Act as "earlier law". Amongst the Acts so repealed was the 1953 Act. While section 76 is the repealing section, section 77 is the saving section. This section is divided in three sub-sections. The first sub-section continues the operation of all the repealed Acts and rules, regulations, orders, notifications, etc., made thereunder for certain purposes set out in clause (a) of that sub-section. Clause (b) of that sub-section, inter alia, provides for the continuance of a registration certificate issued to a dealer under an earlier law, and clause (c) of that sub-section continues the authority of those practitioners who were authorised to appear in sales tax proceedings under the earlier law. Sub-section (2) deals with a recognition granted under an earlier law, and sub-section (3), inter alia, provides that the provisions of section 7 of the Bombay General Clauses Act, 1904, shall apply in relation to the repeal of the earlier law as if the repealed Acts had been an enactment within the meaning of the said section 7. The provisions of section 77 material for our purposes are clause (a) of sub-section (1) and sub-section (3). Section 77(1)(a) and (3) provide as follows :