MOHANLAL CHOKHANY Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioner in this Rule, a dealer registered under Section 7 of the Central Sales Tax Act, 1956, carries on business under the name and style of Messrs Chokhany Sons holding registration certificate No. 372 ALR (Central). On 24th March, 1964, the Commercial Tax Officer issued a notice in Form 3 calling for books of accounts and to show cause why a penalty under Section 11(1) of the Bengal Finance (Sales Tax) Act read with Section 9 of the Central Sales Tax Act should not be imposed on the petitioner. The petitioner filed the return and consequent thereto assessment order was made and the petitioner was again asked to pay the penalty of Rs. 2,500 for not filing the return and challan in due time. On 16th November, 1964, the Commercial Tax Officer issued a notice under Section 11 (4B) of the Bengal Finance (Sales Tax) Act read with Section 9 of the Central Sales Tax Act whereby it was stated that the petitioner has defaulted for making payment of tax for the year ending Chait Sudhi 8, 2019, within the date fixed for payment and it was proposed by the said notice to levy a penalty under the said section for Rs. 5,000 and the petitioner was asked to show cause. The petitioner did not show cause but straightway came to this court and obtained the present rule on 12th January, 1965, and ad interim order of stay on condition that the petitioner must deposit Rs. 2,500 with the Registrar of this court and the respondents were restrained from imposing any further penalty and from realisation of the penalty of Rs. 2,500 already imposed.

(2.) Mr. N.C. Mukherjee appearing for the petitioner contended that there is no provision under the Central Sales Tax Act for the imposition of penalty for late filing of return and/or for non-payment of assessed tax. Furthermore Mr. Mukherjee contended that under Section 10 of the Central Sales Tax Act there is no provision for imposing a penalty for non-submission of return or for delay in filing such return. Mr. Mukherjee contended that Section 6 of the Central Act is the only charging section and Section 9 of the Act lays down the procedure for collection of the taxes. But under the said section the authorities cannot impose any penalty. Mr. Mukherjee further argued that if it is held that under the powers given under Section 9 the penalty can be imposed, then his argument is that Section 9 is ultra vires entry 92A and entry 93 of List I of Schedule VII of the Constitution of India. Mr. Mukherjee argued that by incorporating the provisions of the general sales tax laws of different States the Central Government is legislating on subjects which are State subjects covered by item No. 54 of List II and as such the provision is ultra vires. Mr. Mukherjee further argued that the Government of India cannot legislate indirectly which cannot be done directly.

(3.) Mr. Das Gupta on behalf of the respondents however contended that Section 9 of the Act makes clear the provision for the imposition of penalty and there is nothing wrong in such imposition. Section 9 in effect incorporates the different laws prevailing in the different States in regard to the levy and collection of sales tax. Mr. Das Gupta contended that without repeating the laws in this Act the Central Legislature only provided that for the purpose of levy and collection of the tax and penalty the general sales tax laws of the States will be applicable in those States.