- (1.) BY this reference under section 61 (1) of the Bombay Sales Tax Act, 1959, made at the instance of the assessee, the Maharashtra Sales Tax Tribunal has referred the following question of law to this Court for opinion : "having regard to the provision of section 36 (3) of the Bombay Sales Tax Act, 1959, whether penalty can be levied in respect of default for a part of a month ?"
(2.) THE material facts relevant for deciding the controversy are as follows : The assessee is reseller in chemical and plastic raw materials having a number of agencies. The main business of the assessee is to receive plastic raw materials from Indian Petro Chemicals Corporation, baroda, on consignment basis and to sell the same to the local manufacturers. He is registered as a dealer under the Bombay Sales Tax Act, 1959 ("the Bombay Act" or "the Act") as well as the central Sales Tax Act, 1956 ("the Central Act" ). For the period from November 5, 1983 to october 24, 1984, he was assessed by the Assistant Commissioner of Sales Tax (Assessment), bombay, under the Bombay Sales Tax Act, 1959 and the Central Sales Tax Act, 1956, by his order of assessment dated April 7, 1987. The said order of assessment-cum-penalty resulted in a demand notice for a sum of Rs. 2,75,036 under the Bombay Act and Rs. 9,726 under the Central act. The above demand included a sum of Rs. 2,38,571 levied by way of penalty under section 36 (3) of the Act in the assessment under the Bombay Act and Rs. 1,330 in the assessment under the Central Act. The assessee appealed to the Deputy Commissioner of Sales Tax, Bombay ("the deputy Commissioner") against the levy of penalty under section 36 (3) of the Act. The Deputy commissioner upheld the levy of penalty but reduced the quantum thereof under both the Acts. The penalty under the Bombay Act was reduced from Rs. 2,38,571 to Rs. 1,43,171 and under the central Act from Rs. 1,330 to Rs. 810. The assessee went in second appeal to the Maharashtra sales Tax Tribunal ("the Tribunal" ). Before the Tribunal, the assessee challenged the quantum of penalty on the ground that the penalty had been levied for periods less than a month which, according to the assessee, on a correct interpretation of section 36 (3) (b) of the Act, was not tenable. The Tribunal did not accept the above contention of the assessee and following its earlier decision dated April 22, 1982, in the case of Perfect Engineering Associates v. State of maharashtra in Second Appeal Nos. 148 and 149 of 1981 held that penalty under section 36 (3)could be calculated not only for a completed month but also for a part thereof. Hence this reference at the instance of the assessee.
(3.) MR. Surte, learned counsel for the assessee, urged before us that penalty under section 36 (3)could be levied only for a complete month and not for a part thereof. In support of this contention, our attention was drawn to sub-section (3) of section 36 of the Act as substituted by the Maharashtra Act 22 of 1988 with effect from April 21, 1987, wherein the words used are "for each month or for part thereof" as against the words "for each month" appearing in the said sub-section as it stood during the material period which was prior to April 21, 1987. According to him, the substituted section clearly shows that under the earlier provision, penalty could be levied only for a completed month and not a part thereof. On the other hand, the submission of the learned counsel for the Revenue Mr. N. T. Saraf, is that section 36 (3) as it stood at the material time, provided in clear and unambiguous terms that the penalty would be leviable for the period of default calculated at the rates which were specified therein with reference to a month. There is nothing there to suggest that penalty can be levied at those rates for default for completed months only and not for any period which falls short of a complete month.;