BANSI TYRE SERVICES Vs. ORISSA SALES TAX TRIBUNAL

JUDGEMENT

(1.) THE petitioner, M/s. Bansi Tyres Services has filed this revision under Section 24(2)(b) of the Orissa Sales Tax, 1947, inter alia, seeking to raise certain questions of law arising out of the order dated 20.5.1993, passed by the Orissa Sales Tax Tribunal, Cuttack. By the order dated 14.7.1997, this Court was pleased to admit the revision application on the following questions of law :

(2.) MR . J. Sahoo, learned counsel for the petitioner, inter alia, submitted, that the Vigilance Inspector of Sales Tax Department inspected the premises of the petitioner -assessee on 3.4.1985 and submitted a report. It is alleged that although the said report was available with the Assessing Officer prior to passing of the regular order of assessment under Section 12(4), the self -same vigilance report was used as the basis for initiation of a proceeding of suo motu revision under Section 12(8) of the Act, which concluded with a finding that the petitioner has suppressed transaction amounting to Rs.11,000/ - for which, the turn -over of the petitioner was enhanced by Rs.2,00,000/ -, consequently, raising additional tax demand of Rs.20,000/ - and further amount of Rs.20,000/ - was levied by way of penalty under Section 12(8) of the Act.

(3.) MR . Sahoo, learned counsel for the petitioner, in course of hearing, inter alia, advanced two contentions; the first being that merely because the dealer is found to have made certain suppressions, the assessment cannot be enhanced to any extent as a punitive measure.In this regard, learned counsel for the petitioner has relied upon a judgment of this Court in the case of Bherodhan Jethmal Pvt. Ltd. v. State of Orissa, (1970) XXVI STC 536 as well as on a decision of this Court in the case of Badriprasad Agarwalla v. State of Orissa, (1993) 91 STC 114. The second contention of the learned counsel for the petitioner is that the penalty of Rs.10,000/ - imposed on the petitioner was wholly unjustifiable and was imposed mechanically without any application of discretion. Mr. Sahoo further submitted that the liability to pay penalty does not arise merely upon the proof of any default. In this regard, Mr. Sahoo relied upon a decision of the Supreme Court in the case of M/s. Hindustan Steel Ltd. v. The State of Orissa, AIR 1970 SC 253 in which the Honble Supreme Court has held that the liability to pay penalty does not arise merely upon proof of default ......... An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Relying on the aforesaid dicta of the Supreme Court, Shri Sahoo submitted that in the case at hand the authorities have failed to exercise their discretion in the matter of levy of penalty judiciously since they have failed to take into consideration all relevant circumstances of the case.