GULATI, J. - (1.) ADDITIONAL Judge (Revisions), Sales Tax, has made this reference under section 11 of the U.P. Sales Tax Act, at the instance of the assessee, Messrs. J. K. Oil Mills Co. Ltd., Kanpur.
(2.) FOR the assessment year 1958-59, the assessee was assessed to sales tax amounting to Rs. 61,274. The assessee had already deposited a sum of Rs. 12,839.40. Hence, a demand for the balance amounting to Rs. 48,355.44 was raised. The Sales Tax Officer served a notice of demand upon the assessee along with the copy of the assessment order on 28th March, 1963, requiring the payment of the amount due within a certain time. The assessee did not pay the tax demanded within the time allowed. The Sales Tax Officer, therefore, initiated proceedings for imposing penalty under section 15-A(1)(c) of the Act. A notice was served on the assessee informing him that he was in default and that he should show cause on 2nd July, 1963, why penalty be not imposed upon it. Neither the assessee, nor any one else appeared on its behalf before the Sales Tax Officer on 2nd July, 1963. On behalf of the assessee an application dated 25th July, 1963, was moved before the Sales Tax Officer stating that because the assessee had challenged the rate of tax, there had been an accumulation of tax liability. The assessee was not in a position to meet the entire liability by making payment in one lump sum. It was requested that in the circumstances no penalty be imposed upon it. The Sales Tax Officer did not accept the explanation given on behalf of the assessee and after obtaining approval of the Commissioner of Sales Tax, he made an order on 29th August, 1963, imposing a penalty of Rs. 24,000. The assessee preferred an appeal against the order dated 29th August, 1963. The Assistant Commissioner (Judicial), Sales Tax, allowed the appeal and set aside the order on 29th August, 1963, mainly on the ground that before imposing penalty the Sales Tax Officer did not comply with the procedure prescribed under section 15-A(3) of the Act. The defect pointed out by the Assistant Commissioner (Judicial) was that the Sales Tax Officer did not afford an opportunity to the assessee for being heard in support of its explanation dated 25th July, 1963. The department then went up in revision. The Additional Judge (Revisions), however, took a different view and came to the conclusion that the requirement of law had been fully complied with when a notice was given to the assessee requiring it to show cause on 2nd July, 1963, why penalty be not imposed. He, accordingly, set aside the appellate order and held that the order dated 29th August, 1963, imposing penalty was quite justified, but in the circumstances, the Sales Tax Officer should not impose a penalty exceeding Rs. 21,763.35. In the result, he reduced the penalty imposed by the Sales Tax Officer from Rs. 24,000 to Rs. 21,763.
(3.) AT the instance of the assessee, the Additional Judge (Revisions), Sales Tax, U.P., has referred the following three questions for the opinion of this court : "(1) Whether on the facts and in the circumstances of the case, without giving a further opportunity to be heard and only on the written explanation sent by the dealer in compliance with the show cause notice under the first proviso of section 15-A, the assessing authority could be said to be 'satisfied' judicially that the dealer had failed to pay the tax assessed 'without reasonable cause' in order to give him jurisdiction to impose penalty ? (2) Whether in view of the facts and circumstances, the provisions of sub-section (3) of section 15-A were complied with in view of the fact that the notice to show cause had already been issued earlier and a date fixed for the same ? (3) Whether on the facts and in the circumstances of the case, the revisional court was justified in upholding the penalty order though reducing the amount and whether the order of penalty imposed by the assessing authority was void ab initio and liable to be quashed ?" ;