VISWESWARA COAL DEPOT Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) These three revisions arise out of common order of the Tribunal dated 27/12/1989 passed in three appeals relating to the same assessee but different assessment years, namely, 1978-79, 1979-80 and 1980-81.

(2.) On the ground that the assessee has misused "C" forms and has thus become liable to be punished under section 10(d) of the Central Sales Tax Act, 1956 the Assistant Commercial Tax Officer passed an order of penalty under section 10-A of the Central Sales Tax Act, 1956 by order dated 31/03/1986. In the said order of penalty, a demand was raised, both for penalty as well as tax the by the petitioner. It appears that the petitioner was already assessed to tax in May, 1982. Against the said demand, the petitioner filed an appeal before the Commercial Tax Officer. It may be noted here that the assessee challenged only levy of penalty but not demand of tax by the Assistant Commercial Tax Officer, and penalty was the subject-matter of appeal. The Commercial Tax Officer, the first appellate authority, has, however, recorded the finding that the issuing of "C" forms by the appellant (petitioner herein) was willful and not on account of any bona fide mistake and that the appellant (petitioner herein) had cheated the Government. So holding the first appellate authority dismissed the appeal on 24/01/1987. That order was questioned by the petitioner before the Sale Tax Appellate Tribunal. Three appeals were filed in respect of three assessment years. One of the contentions raised by the petitioner before the Tribunal was that under section 10-A of the Central Sales Tax Act, 1956 no demand can be made in respect of the tax and therefore demand of tax was unsustainable. Though this contention was not the subject-matter of the first appeal before the Commercial Tax Officer, the Tribunal not only entertained the same but granted relief on that aspect. It was pointed out by the assessee that though only penalty could be levied under section 10-A of the Central Sales Tax Act, 1956, the Assistant Commercial Tax Officer directed recovery not only of penalty of Rs. 26,279 but also of tax Rs. 17,519 which was without jurisdiction and without any authority of law. On the basis of the relief granted by the Tribunal, what is now argued by the learned counsel for the petitioner is that as the levy of tax itself has been set aside, no penalty can be levied against the petitioner and therefore the Tribunal has committed an error in not setting aside the order levying the penalty when the levy of tax was set aside.

(3.) To appreciate the contention of the learned counsel for the petitioner, it would be necessary to read the provisions of sub-section (1) of section 10-A of the Central Sales Tax Act, 1956 which is relevant for our purpose and they are as follows : "10-A. Imposition of penalty in lieu of prosecution. - (1) If any person purchasing goods is guilty of an offence under clause (b) or clause (c) or clause (d) of section 10, the authority who granted to him or, as the case may be, is competent to grant to him a certificate of registration under this Act, may, after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one and a half times the tax which would have been levied under sub-section (2) of section 8 in respect of the sale to him of the goods, if the sale had been a sale falling within that sub-section : Provided that no prosecution for an offence under section 10 shall be instituted in respect of the same facts on which a penalty has been imposed under this section." From a perusal of the provisions extracted above, it is clear that section 10-A has the following ingredients : (1) A person purchasing goods must be found to be guilty of an offence under clause (b) or (c) or (d) of section 10; (2) If the first condition is satisfied, then, a sum not exceeding one and a half times the tax which would have been levied under sub-section (2) of section 8 in respect of the sale to him of the goods, provided the sale had been a sale falling within that sub-section, could be levied by way of penalty; (3) Where the penalty has been imposed, the prosecution contemplated under section 10 in respect of the same facts, which form the basis of levying penalty, cannot be initiated against that person; (4) The authority to levy the penalty is the authority which is competent to grant the assessee's certification of registration under the Act; (5) The authority has to give a reasonable opportunity to the assessee before levying penalty.