- (1.) We are concerned in this appeal with the assessment year ended 31st March, 1968. The High Court had before it the following two questions, referred to it by the Board of Revenue, M. P. "1. Whether the power to confirm, reduce, enhance or annul the pendency in appeal as provided under Section 38 (5) of the State Act includes the power to impose penalty, where it has not been imposed by the assessing authority 2. Whether under the facts and circumstances of the case penalty imposed under Section 43 (1) read with Section 9(2) of the Central Act was justified -
(2.) The appellant's return was delayed by two months and seven days. The assessing authority, therefore, imposed a penalty of Rs. 4,000/- upon the appellant. The appellant preferred an appeal before the Deputy Commissioner of Sales Tax. He maintained the penalty of Rs. 4,000/- imposed as aforesaid. He also came to the conclusion that the total tax that the appellant was liable to pay was Rs. 13,44,682/- out of which it had deposited Rs. 7,71,892/- with its return; the sum of Rs. 5,68,790/- had not been paid. The Deputy Commissioner, therefore, issued to the appellant a notice under Section 43 of the M. P. General Sales Tax Act, 1958. The appellant's objections were overruled and a penalty of Rs. 1 lac was imposed.
(3.) The appellant moved the Board of Revenue. It relied upon Section 38(5) of the said Act contending that the appellate authority could only enhance a penalty; the assessing authority not having imposed the penalty in regard to the incorrectness of the return, no penalty in that behalf could be imposed by the Deputy Commissioner. The Board rejected its contention and made the above reference to the High Court. The High Court came to the conclusion that Section 38 (5) was inapplicable but that the requirements of Section 43 were met. The reference was, therefore, answered in favour of the Revenue.;