KHOSLA MILLS Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS appeal under Clause 10 of the Letters Patent is directed against the judgment of the learned single Judge, dismissing the writ petition filed by the appellant, Messrs. Khosla Rice Mills, Sarna (hereinafter referred to as the dealer) against the imposition of a penalty by the Assessing Authority to the tune of Rs. 1,25,000 for filing a false return under Section 10 (7) of the Punjab General Sales Tax Act (Act No. 46 of 1948) (hereinafter referred to as the Act), which penalty was subsequently reduced by the Sales Tax Tribunal to Rs. 20,000.

(2.) WITH effect from 15th January, 1968, both paddy and rice were included in Schedule C to the Act and thus became articles on which purchase tax was payable by the last purchaser. The dealer apparently purchased large quantities of paddy and, after shelling the same, sold the resultant rice mostly to the State Government. On 30th January, 1969, a return was filed by the dealer for the third quarter ending 31st December, 1968, in which the purchases were shown as "nil". Along with his return, the dealer sent a covering letter giving his reasons for non-liability for payment of tax and for his filing a "nil" return. In this, inter alia, he stated as following:

(3.) ON 10th February, 1969, the Assessing Authority under the Act issued a notice under Section 10 (7) of the Act calling upon the dealer to show cause why penalty be not imposed for filing a false and inaccurate return. On 12th February, 1969, a reply was put in, in which mostly the grounds mentioned above were reiterated and details given. On 13 th February, when the dealer appeared in pursuance of the notice, he was asked to bring the accounts on the following day, i. e. , on 14th February, 1969. On 14th February, 1969, nobody appeared on behalf of the dealer. It is stated that a telegram was given and a letter was also sent per registered post expressing inability of the dealer to appear on 14th February and asking for an adjournment. As the telegram and the registered letters did not reach the Assessing Authority before the end of the working hours on 14th February, the impugned order imposing penalty was passed ex parte. A copy of this order is annexure B.