COMMISSIONER OF SALES TAX Vs. EMPICO TRADERS

JUDGEMENT

(1.) The respondents were at all material times registered as dealers under the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the Act"). For the period 1st April, 1969, to 31st March, 1970, the respondent filed their periodic returns before the Sales Tax Officer as required by section 32 of the Act. Along with the returns the respondents filed receipted chalans showing prior payment into the Government treasury of the tax payable by them according to such returns as required under section 38 of the Act. For the said period the respondents thus paid into the Government treasury an aggregate sum of Rs. 21,114.28 as tax. In the returns they also claimed credit in respect of the set-off allowable to them under rule 43 of the Bombay Sales Tax Rules, 1959. The Sales Tax Officer assessed the amount of tax payable by the respondents at Rs. 32,874.39 and further allowed the respondents set-off, which, according to the statement of the case was in the sum of Rs. 5,493.99, but as shown in the order of assessment was in the sum of Rs. 7,670.99. The Sales Tax Officer further held that the amount of tax paid by the dealer into the Government treasury was less than eighty per cent of the amount of tax assessed by him and, therefore, under the explanation to sub-section (2) of section 36 the respondents should be deemed to have concealed the turnover or knowingly furnished inaccurate turnover liable to tax, and levied upon the respondents a penalty under clause (c) of the said sub-section in the sum of Rs. 7,600. He negatived the respondents' contention that in calculating the amount of tax paid by them before assessment, the amount of set-off allowed to them should be taken into account. In appeal the Assistant Commissioner of Sales Tax confirmed the imposition of penalty but reduced the amount to Rs. 3,500. The respondents then went in second appeal to the Sales Tax Tribunal. The Tribunal allowed the appeal and deleted the penalty under section 36(2)(c) of the Act imposed upon the respondents. The Tribunal has not given any reason in its order for arriving at this decision.

(2.) At the instance of the Commissioner of Sales Tax, the Tribunal has stated this case and referred to this High Court the following question : "Whether, on the facts of this case and on a proper interpretation of the expression 'tax paid' appearing in explanation (1) to section 36(2)(c) of the Bombay Sales Tax Act, 1959, the Tribunal was justified in holding that this expression cannot be restricted to only the amount of Rs. 21,114.28, being the tax paid in the Government treasury but will also include the amount of set-off of Rs. 5,493.99 granted to the assessees under rule 43 of the Bombay Sales Tax Rules, 1959 ?"

(3.) Before us, Mr. Jetly, the learned counsel for the applicant, has submitted that the amount in respect of which a set-off is allowed to a dealer at the time of assessment cannot be equated with the tax paid by a dealer. In Mr. Jetly's submission, the expression "the total amount of tax paid by the dealer" in explanation (1) to section 36(2)(c) of the Act means the total amount of tax paid by the dealer into a Government treasury. Mr. Jetly further contended that the expression "assessed" in the said explanation meant the amount of tax assessed after deducting from the total amount of tax found payable in the assessment order the amount in respect of which the set-off is allowed to a dealer. Mr. Joshi, the learned counsel for the respondents, on the other hand, argued that the total amount of tax is assessed by an order of assessment without deducting therefrom any amount by way of set-off which would be allowed to a dealer and, therefore, the expression "the total amount of tax paid by the dealer" includes the amount in respect of which credit was given in the assessment order to a dealer by way of set-off in respect of taxes recovered from him by the selling dealer.