CROMPTON GREEVES LIMITED Vs. STATE OF M.P.

JUDGEMENT

(1.) CHALLENGING the imposition of penalty to the tune of Rs. 2,09,489 by the Commercial Tax Department, the petitioner has filed this petition.

(2.) THE petitioner -company is duly registered company under the provisions of the Companies Act 1956 vide registration certificate, annexure P2. The company is engaged in the business of manufacturing and distribution of various electronic goods including transformers. For the said purpose they have established a factory in Malanpur, District Bhind. For the assessment year April 1, 1993 to March 31, 1994 returns in accordance with the Madhya Pradesh General Sales Tax Act, 1958 was submitted by the petitioner to the assessing authority. Even though turnover and the factual aspect of the matter were correctly reflected in the returns filed by the petitioner -establishment, assessment of tax was made at the rate of eight per cent per annum on the ground that as per the Government notification issued on July 17, 1989, being Notification Number 16.6.1989 -11 electrical goods were notified to be taxable at the rate of eight per cent per annum under the heading electrical goods, transformers were also included in parts 12 under the subheading passive components, parts and spares. Claiming the transformers manufactured by the petitioner to be falling in this particular head as per the notification petitioner paid tax at the rate of eight per cent per annum. The assessing authority found that this particular circular will not apply in the case of the petitioner, and it was found that the petitioners are liable to pay tax at the rate of twelve per cent per annum. It was the case of the Revenue that as per the notification itself tax at the rate of eight per cent is to be collected subject to confirmation by the M.P. Electronic Development Corporation but in the present as there was no confirmation by the M.P. Electronic Development Corporation, tax at the rate of twelve per cent should have to be paid. Accordingly, the assessing authority, proceeding in the matter, assessed tax at the rate of 12 per cent per annum. After the order was passed by the assessing authority, vide annexure P5 on July 17, 1989 notice under Section 43(1) of the Madhya Pradesh General Sales Tax Act, 1958 was issued, vide annexure P8 dated May 2, 1997 indicating as to why penalty could not be imposed upon the petitioner for submitting false and fabricated return of tax. Petitioner submitted their reply to the competent authority and denied that they had filed any false return. However, the assessing authority initially passed an order assessing penalty at Rs. 6,28,435, on a revision being filed, the revisional authority has interfered with the matter and the amount of penalty has been reduced by 50 per cent. Inter alia, contending that the imposition of the penalty by the revisional authority by modifying the earlier order of the assessing authority is also unsustainable, the petitioners are entitled to total exemption from payment of any penalty, the petitioner seeks interference in the matter. The order passed by the revisional authority is annexure P1 dated March 15, 2004 and the order passed by the assessing authority is annexure P12 dated December 30, 2002.

(3.) SMT Ami Prabal, learned Deputy Advocate -General for the respondents/State argued that in the present case, assessing authority and the revisional authority having assessed the tax and having found incorrect assessment made by the petitioner in the return by applying a lower rate of tax, the power exercised by the authorities concerned, does not warrant any interference and this petition is liable to be dismissed.