BACHAN TRADERS, PROPRIETORSHIP Vs. STATE OF BIHAR

JUDGEMENT

(1.) These three writ petitions under Article 226 of the Constitution are filed by a dealer M/s Bachan Traders, a proprietary firm, through its Proprietor Arun Kumar, against the common judgment and order dated 2nd July, 2004 passed by the Commercial Taxes Tribunal (hereinafter referred to as 'the Tribunal'). The matter at issue is the penalty imposed upon the Petitioner for not disclosing the correct figures of the gross turnover and the deficit in payment of sales tax for the Assessment Years 1997-98, 1998-99 and 1999-2000. The Petitioner is a manufacturer of and a wholesale dealer in country liquor. The Petitioner had several establishments at various places in the then State of Bihar. Since the year 1977 the State of Bihar had exempted the country liquor from payment of sales tax. The said exemption continued up to 1997. By Government Notification dated 21st May, 1997 the said exemption was withdrawn and the sales tax at the rate of 25% was levied upon the country liquor. The said Notification was challenged by certain dealers, including the Petitioner in CWJC Nos. 5220 of 1997, 5221 of 1997, 5232 of 1997 and 5298 of 1997. By ad interim order dated 27th October, 1997 the operation of the Notification dated 21st May, 1997 was stayed. The said stay continued up to 17th November, 1997. The said CWJC No. .5298 of 1997 was ultimately withdrawn by the Petitioner on 10th December, 1998. We do not allude to the long line of litigations raised by the Petitioner, as they are not relevant for the purpose of the present issue. Suffice it to say that in none of the matters the Petitioner has succeeded.

(2.) Pending the said petition, the Petitioner continued to file sales tax returns. The gross turnover returned by the Petitioner did not include the amount of excise duty paid by the Petitioner over the country liquor manufactured by him. The Respondents, therefore, on 22nd December, 1999 issued Notice under Section 20(1) of the Bihar Finance Act, 1981 (hereinafter referred to as 'the Finance Act') and called upon the Petitioner to show cause why he should not pay penalty for not disclosing the true turnover and for the deficit in sales tax paid by him. The Notice was answered by the Petitioner. On 6th January, 2000 a further notice was issued to the Petitioner calling upon him to file a revised return in respect of the excise duty paid and the tax payable thereon. By order dated 20th January, 2000, the Assistant Commissioner of Commercial Taxes, Patna, in exercise of power conferred by Section 20(1)(a) of the Finance Act, imposed 300% penalty upon the Petitioner for non-disclosure of the correct gross turnover and for the shortfall in payment of sales tax for the periods from (i)21.5.1997 to 31.3.1998; (ii) 1.4.1998 to 31.3.1999; and (iii) 1.4.1999 to 31.12.1999. The aforesaid orders of the Assistant Commissioner of Commercial Taxes were confirmed in appeals by the Joint Commissioner of Commercial Taxes, Appeal, and in revision by the Commissioner of Commercial Taxes. The said orders were upheld by the Tribunal under the impugned judgment and order dated 2nd July, 2004. Therefore, the present writ petitions.

(3.) The present writ petitions were heard and dismissed by this Court on 16th March, 2005. Applications for review, Civil Review Nos. 71 of 2005, 72 of 2005 & 73 of 2005 also were rejected. The matter traveled to the Hon'ble Supreme Court. By the judgment and order dated 31st March, 2009 passed in Civil Appeal Nos. 2117 of 2009 to 2119 of 2009, the Hon'ble Supreme Court has remitted the matter to the High Court on a limited issue "Whether imposition of penalty and the quantum thereof was proper or not". Thus, we are called upon to consider (i) Whether imposition of penalty for shortfall in the payment of sales tax by the Petitioner was warranted; and (ii) Whether the penalty at the rate 300% imposed by the Respondent authority is justiciable.