HINDUSTAN LEVER LTD Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) IN this batch of writ petitions, the prayer being similar and the grievance put forth being common, they were heard analogously and disposed of by this common order. For the sake of clarity and convenience, we are inclined to advert to the facts in writ Petition. No. 1569 of 1999, slightly in detail. Thereafter, we shall briefly state the necessary facts of other writ petitions which are requisite for the disposal, to meet the conception of completeness.

(2.) AT the outset we must state that what was a colossal complaint when the petitioner visited this Court in invocation of its jurisdiction under article 226 of the Constitution of India has watered down, if we are permitted to say so like a melted glacier inasmuch as the initial challenge to the constitutional validity of sections 61 (4) (c), 69 (2) and 69 (3) of the Madhya Pradesh Commercial Tax Act, 1994 (for brevity "the Act") the core one, is no more required to be dealt with by us, in view of the subsequent developments that occurred during the pendency of this writ petition. The factual score as frescoed is that when notice was issued by the assessing officer initiating the proceedings for imposition of penalty on the backdrop that the assessee/company had not collected the tax on toilet soaps at 15 per cent but collected at 6 per cent, though toilet soaps according to the assessing officer were covered under the entry No. 7, Part III of Schedule II inasmuch as the entry postulates toilet articles including tooth paste, tooth powder, perfumed hair oils, face powder, talcum powder, combs, brushes, razors and razor blades, the assessee thought it condign to invoke the extraordinary remedy as it harboured the feeling that the preferring of appeal was not efficacious and in a way onerous that apart the assessee thought without assailing the validity of the provisions relating to imposition of penalty the challenge to the proceeding would be a sisyphean endeavour.

(3.) THE grievance was that the assessee had felt that on earlier occasions, under the Madhya Pradesh General Sales Tax Act, 1958 there was classification from time to time. The toilet soaps could be taxed differently and amendments had been brought into existence at the later stage creating the distinction in respect of toilet soaps with the other items. In view of the factual backdrop, the assessee was under the bona fide belief that toilet soaps could be taxed under the residual entry No. 1 of Part VII which stipulates about all other goods not included in Schedule I or any other Part of the Schedule. After the show cause notice was issued, a demand was made which was five times of tax which was not paid by the assessee. At that juncture the assessee felt that the appeal which is provided for challenging the penalty was not an efficacious remedy inasmuch as 50 per cent of the penalty due has to be deposited before preferring the appeal and that apart no discretion was left with the appellate authority for reduction of penalty inasmuch as heavy onus is cast on the assessee to show that there was no fraud and gross negligence though under the accepted jurisprudence, the department has to record a finding that there was fraudulent maladroit effort by the assessee or there was gross negligence. In that backdrop the writ petitioners challenged the provision as unconstitutional.