- (1.) These two appeals by special leave are directed against the judgment of the Rajasthan High Court allowing Civil Writ Petitions Nos. 111 and 172 of 1961, and quashing orders of the Sales Tax authorities imposing penalties on the respondent, Ghasilal, for delay in payment of tax due. The High Court came to the conclusion that the penalties had been imposed in violation of Art. 20(1) of the Constitution, but it is not necessary to deal with this question because we are inclined to accept the contention raised by the learned counsel for the respondent, Mr. Garg, that the penalties have been imposed in violation of the relevant statutory provisions.
(2.) The relevant facts are these. On March 28, 1955, Rajasthan Sales Tax Rules (hereafter referred to as the Rules) were published in the Rajasthan Gazette. The Rajasthan Sales Tax Act (hereafter referred to as the Act) came into force on April 1, 1955. The respondent filed Civil Writ Petition No. 11 of 1958, in the High Court challenging the making of assessments on the turnover of the respondent for the year 1955-56 on the ground that the said Rules were invalid. On January 9, 1958, the High Court passed an interim order that the petitioner will keep proper accounts and file the prescribed returns but he shall not be assessed till further orders'. While the petition was pending in the High Court an Ordinance (No. 5 of 1959) was promulgated on November 6, 1959, validating the Rules. Thereupon the respondent withdrew Writ Petition No. 11 of 1958. On December 17, 1959, the Rajasthan Sales Tax Validation Act (Rajasthan Act 43 of 1959) replaced the ordinance. It is common ground that the effect of the said Ordinance and the said Act was to validate the Rules, even if any defect existed in the making of the Rules. We may mention that according to the appellant, the said Ordinance and the said Validating Act were enacted our of abundant caution.
(3.) On December 4, 1959, the Sales Tax Officer, Kotah City Circle, sent a show cause notice to the respondent in the following words : "Your Writ No. 11 has been dismissed by the Hon'ble High Court on 23rd November, 1959. You are, therefore, requested to deposit the tax due up to the date within a week, failing which necessary action according to law will be taken." This notice was served on the respondent the same day. The respondent filed a return for the 4th quarter ending October 22, 1957, and Rs, 11,898.31 was deposited as tax. It appears that on January 8, 1960, March 5, 1960 and March 19, 1960, he deposited Rs. 28,607 as tax in respect of the four quarters of the accounting period October 23, 1957 to November 10, 1958. It is not clear from the record whether he filed returns on these dates. On April 25, 1960, the Sales Tax officer made an assessment in respect of the accounting period November 3, 1956 to October 22, 1957, and proceeded to impose a penalty of Rs. 400 under S. 16(1)(b) of the Rajasthan Sales Tax Act. He justified the imposition of penalty thus : "The assessee has not deposited tax of the quarters of the due date, the tax deposited for 4th quarter is very late, i.e., after two years the assessee was given a notice and in reply to which he referred the stay order of the Hon'ble High Court granted to him in a writ petition filed challenging the validity of Sales Tax Rules made under the Act, the stay order of the Hon'ble High Court does not say that the assessee is allowed to withhold the tax on the contrary it directs that the petitioner (assessee) will keep proper accounts and file prescribed returns but shall not be assessed. This clearly shows that the assessee should have filed returns in time and according to S. 7(2) the Treasury challan of the deposit should have accompanied them. This amounts to contravention of the mandatory provisions, the writ was dismissed on 28-4-58 (Sic 23-11-59), even the amount was not de- posited till 17-12-59. This shows that the assessee withheld the tax intentionally.";