MOI ENGINEERING LTD Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THE petitioner a registered dealer under the Punjab General Sales Tax Act, 1948 and the Central Sales Tax, 1956 (for short "the State Act" and "the Central Act" respectively) is engaged in the manufacture of machinery. It filed its return under the Central Sales Tax Act, 1956, for the quarter ending March 31, 1992 along with a cheque dated April 30, 1992 drawn on State Bank of India in a sum of Rs. 12,27,169. 36 as payment of tax for that quarter. The cheque when presented was dishonoured by the bank on May 19, 1992. Penalty proceedings were initiated against the petitioner for failure to pay the tax along with the return. In reply to the show cause notice, it pleaded that the cheque was wrongly dishonoured by the bank and that it had the requisite amount in its account with the State Bank of India. In support of this plea, the dealer produced a certificate dated June 17, 1992, from the State Bank of India, Mohali, certifying that the cheque had been returned inadvertently and that the amount was lying in reserve with it for payment of sales tax liability. The Assessing Authority after taking note of the bank statement produced before it by the petitioner found that the account of the dealer with Punjab National Bank, Delhi, had been debited in a sum of Rs. 12 lacs on May 22, 1992 and even if this amount was remitted to the State Bank of India. Mohali, the account with the bank at Mohali did not have sufficient funds for the cheque to be cleared on May 19, 1992. The certificate dated June 17, 1992 issued by the State Bank of India was, therefore, not accepted. The Assessing Authority as per order dated July 31, 1992 imposed a penalty of Rs. 2,50,000 and also levied interest of Rs. 30,700 for late payment of tax. Feeling aggrieved by this order, the petitioner filed an appeal before the Deputy Excise and Taxation Commissioner, Patiala, who as per order dated December 14, 1992 modified the order of the Assessing Authority by reducing the penalty from Rs. 2,50,000 to Rs. 1,30,000. Still not satisfied with this order, the petitioner went up in appeal before the Sales Tax Tribunal which dismissed the same on February 14, 1994. The dealer then filed an application under section 22 (1) of the State Act requiring the Tribunal to refer to this Court the following questions of law which, according to the dealer, arose out of the order of the Tribunal :

(2.) MR . K. L. Goyal, Advocate appearing for the petitioner, submitted that the certificate dated June 17, 1992 issued by the State Bank of India, Mohali, to the effect that it had inadvertently returned the cheque dated April 30, 1992 and that it had the amount lying with it clearly proves that the dealer was not at fault for the cheque being dishonoured and, therefore, no penalty could be levied. The argument is no doubt attractive but on deeper scrutiny one finds that there in so merit in it. As found by the Assessing Authority, the cheque was dishonoured by the State Bank of India, Mohali, on May 19, 1992 and on this date the petitioner did not have funds in this account. It was only on May 22, 1992 that it transmitted a sum of Rs. 12 lacs from its current account with Punjab National Bank, Delhi. Since the amount was arranged after the cheque had been dishonoured, the Assessing Authority discarded the certificate issued by the State Bank of India and came to the conclusion that the assessee had committed default in not depositing the tax along with its return. This finding has been affirmed by the Appellate Authority and also by the Tribunal. The finding, in our opinion, is one of fact and no question of law arises from the order of the Tribunal. Mr. Goyal drew our attention to the case of Bharat Electronics Ltd. v. State of Haryana [1994] 93 STC 461 (P&h) in support of his contention. This case is quite different on facts and is of no assistance to him. In that case the bank defaulted by wrongly crediting the amount in the account of the Central Government and later when the mistake was discovered the entries were reversed and the amount was credited to the account of the State Government. In that case, the amount way lying with the bank but in the case before us, it has been found as a fact that on the date when the cheque was dishonoured the dealer did not have sufficient funds in its account at Mohali, Moreover, the certificate issued by the State Bank of India has been discarded by the authorities and this finding, as we have already held, is one of fact.