AUTO PINS INDIA REGISTERED Vs. STATE OF HARYANA

JUDGEMENT

(1.) THE power of the Assessing Authority to impose a penalty under Section 9 (3) of the Central Sales Tax Act 1956 read with Section 10 (6) of the Punjab General Sales Tax Act 1948 is the subject of challenge in these seven connected Writ petitions Nos. 2238, 3414, 3415, 3416, 3628 and 3629 of 1968 and No. 234 of 1969. Identical points of law arise in these petitions and we propose to dispose all of them by this judgment.

(2.) THE facts in Civil Writ No. 2238 of 1968 in which the main argument has been addressed by Mr. Thapar may alone be recounted. Messrs. Auto Pins (India), a registered partnership firm filed a return for the quarter ending the 31st december, 1967, showing a taxable turnover of Rs. 9,04,609. 94 P. and the tax due calculated thereon by the assessee was stated to be Rs. 31,632. 84 P. The payment of this tax was due by the 31st of January, 1908, but it is the admitted case of the parties that this tax was not so deposited and the reason for not doing so, as averred in the petition, is that the sales were made on approval basis to the government Departments and as the payments of the amounts were not made by the Government, therefore, the tax could not be deposited. On behalf of the respondent-State it has been averred that as soon as the goods were taken delivery from the bailee by the purchasing parties, the sale is complete and the tax on the inter-State sale is attracted forthwith, under Section 6 of the Act and it has been further denied for want of knowledge that the Government Department did not make payment for the same during the relevant period. A show cause notice was issued to the assessee by the authority for the non-payment of the tax due, in response to which the petitioners appeared before the Assessing Authority on the 18th of March, 1968, and were directed to make payment in the Treasury and produce the receipt by the 21st of March, 1968, at 10 A. M. but it is averred that none appeared on behalf of the petitioners on the said date and time. Another show cause notice was issued before the final hearing on the 30th of March, 1968, but the petitioners did not deposit the amount in cash, though it has been averred in the petition that this was tendered by means of a Bank Draft. Before the assessing Authority a plea of the poor financial position of the company and consequently its inability to deposit the tax was also taken which was rejected by the impugned order and the Assessing Authority proceeded to impose a penalty of rs. 20,000/- under Section 9 (3) of the Central Sales Tax Act, 1956, read with section 10 (6) of the Punjab General Sales Tax Act. The petitioners subsequently deposited the tax due on the 1st of April, 1968. It is the imposition of this penalty which has been assailed as unwarranted by law on behalf of the petitioners.

(3.) MR. Thapar has very lucidly advanced two contentions in support of the petition. The first of these is that the Central Sales Tax Act (hereinafter referred to as the central Act) was enacted in the year 191)6 and by Sub-clause (3) of Section 9 thereof the authority under the General Sales Tax Law of the appropriate State was empowered to assess, collect and enforce payment of any tax including any penalty on behalf of the Government of India. The relevant provisions for the payment of tax and returns in the Punjab General Sales Tax Act 1948 (hereinafter referred to as the Punjab Act) were then contained in Section 10 of the said Act, as amended by Act 6 of 1952. It was hence argued that the Central Act of 1956 could have adopted only the existing provisions of Section 10 of the Punjab Act as they stood at the enactment of the Central Act in 1956 and at that time Section 10 did not contain Sub-section (6) which is the relevant provision for imposing a penalty. This power was given by adding this sub-section to Section 10 of the punjab Act of 1948 with effect from 1st April, 1960, by the amending Punjab Act, no. 18 of 1960. It was, therefore, submitted that Parliament could not adopt prospectively the amendments which may be made from time to time by the State legislature in the Punjab and further it could not delegate to the Punjab legislature its own functions of legislating regarding the Central Sales Tax. Any such delegation authorising the adoption of future amending legislation in respect of the Punjab Act was characterised as an abdication of legislative power by parliament and hence unconstitutional and invalid. Apart from elaborating this argument on principle Mr. Thapar relied upon three Madras decisions D. H. Shah and co. v. State of Madras, (1967) 20 STC 146 (Mad), State of Madras v. M. Angappa chettiar, (1968) 22 STC 226 (Mad) and K. A. Ramudu Chettiar v. State of Madras, (1968) 22 STC 283 (Mad ). These authorities undoubtedly lend support to the contention raised on behalf of the petitioner.