Amiya Kumar Mookerji, J. - (1.) This Rule is directed against an order of penalty dated 29th September, 1973 under Section 10A of the Central Sales Tax Act, 1956 issued by the Commercial Tax Officer, Colootola charge and a notice of penalty dated 28th September, 1973 under Section 5B of the Bengal Finance (Sales Tax) Act, 1941 issued by the Assistant Commissioner of Commercial Taxes, Dharmatola Circle.
(2.) The petitioner is a private limited company incorporated in 1966 under the Companies Act. By a registered Deed dated 3rd December, 1968, the petitioner purchased the assets, rights and liabilities of M/s. Belal Biri Factory, a registered partnership firm. The said partnership firm had sales tax registration certificate but as the sales were not taxable for the last few years before the purchase, the said certificate was cancelled. On the 19th December, 1967, the petitioner applied to the Commercial Tax Officer, Colootola Charge for issue of a fresh registration certificate under Section 7(1) of the Bengal Finance (Sales Tax) Act, 1941 and Section 7(1) of the Central Sales Tax Act, 1956. Various dates for the hearing of the said application were fixed by the Commercial Tax Officer and the petitioner's representative appeared before him on five occasions and answered all queries. On the 3rd December, 1968 the petitioner's authorised representative appeared again before the Commercial Tax Officer for the hearing of his registration application. At that time the said representative stated that the formal document of transfer of all assets and liabilities of the said firm was executed on 3rd December, 1968. Thereafter, the petitioner's representative appeared before the said Commercial Tax Officer on the 27th December, 1968 and 9th January, 1969. Thereafter, by its letter dated 24th January, 1969 addressed to the Commissioner of Commercial Taxes, the petitioner stated that its application had been pending for a very long time and it was extremely necessary that the petitioner should be a registered dealer and requested the Commissioner of Commercial Taxes to issue necessary directions upon the Commercial Tax Officer to grant to registration certificate applied for, upon considering the application on merits. Thereafter, on 19th February, 1969 the Commercial Tax Officer wrote to the petitioner pointing out certain discrepancies and asked the petitioner to clarify the points raised in the said letter and also directed to produce books of accounts. On or about 2nd April, 1969, the Commercial Tax Officer informed the petitioner that its application for registration certificate had been rejected on 20th March, 1969. No reason was, however, given in the said order which was communicated to the petitioner. Being aggrieved the petitioner preferred an appeal against the said order to the Assistant Commissioner Taxes directed the Commercial Tax Officer to pass fresh orders after affording the petitioner further opportunity to clarify the discrepancy, if any.The Assistant Commissioner of Commercial Taxes observed : " From a cursory glance of the books of accounts as produced before me, it prima facie seems to me that the petitioner has already incurred liability for registration under the State Act as well as under the Central Act". By a letter dated 15th December, 1969 the petitioner's representative explained to the Commercial Tax Officer that there was in fact no discrepancy in the matter. By a memo dated 28th, January, 1971, the Commercial Tax Officer intimated to the petitioner that by his order dated 19th January, 1971, he rejected the petitioner's application for registration. The petitioner, thereafter, moved this Court in an application under Article 226 of the Constitution, Challenging the rejection of the petitioner's application for registration as illegal, arbitrary, and malafide. A Rule was obtained. The said Rule was made absolute by this Court on the 10th of May, 1972. P. K. Banerjee, J. set aside the order dated 19th January, 1971 and directed the Commercial Tax Officer to dispose of the petitioner's application for registration in accordance with law within six months from date. Thereupon, the Commercial Tax Officer granted the registration certificate to the petitioner both under the State and Central Acts in the 19th August, 1972. Thereafter, the Commercial Tax Officer by his memo dated 4th June, 1973 called upon the petitioner to show cause why action should not be taken against it under Section 10A of the Central Sales Tax Act, 1956. It was alleged that it had been appeared to him that the petitioner had issued 'C' Form against the bill of purchases prior to the date of initial registration as such the petitioner had committed an offence under Section 10(i)(c) of the Central Sales Tax Act 1956. On 21st June, 1973, petitioner's authorised representative appeared before the Commercial Tax Officer and submitted that the Register 2 and counter-foil of the forms being seized by the Bureu of Investigation, the same could not be produced. Thereafter, on the 30th August, 1973, the Commercial Tax Officer recorded in the order-sheet that the dealer had issued three declaration forms to make a total purchase by using all the above declaration forms for Rs. 4,53,467,03. Since all the purchases were made prior to the date of registration, the Commercial Tax Officer held that the dealer had committed an offence under Section 10(i)(c) of the Central Act as amended and imposed a penalty of Rs. 60,000/- under Section 10A of the said Act. Being aggrieved by the said order dated 29th September, 1973, the petitioner preferred a revision application dated 29th January, 1974 before the Assistant Commissioner of Commercial Taxes contending inter alia that in view of the fact that against the rejection of the application of registration, the petitioner moved the Hon'ble High Court in Civil Rule 2620(W) of 1971 and pursuent to the order of this Court the registration was granted to the petitioner on the basis of the application filed as early as 1967, the registration should have related back to the time when the application was made. The petitioner, therefore, requested the Commercial Tax Officer to cancel and/or annul the impugned order of penalty under Section 10A of the Central Act. Thereafter, a notice in from VIIC dated 28th September, 1973 was issued by the Assistant Commissioner of Commercial Taxes under Section 5B of the Bengal Act, as an officer authorised under Rule 55B(1) of the Sales Tax rules, intimating that the petitioner after purchasing the goods had furnished declaration referred to in the proviso to the clause (aa) or clause (bb) of sub-section (1) of Section 5 of in the proviso to clause (a) of sub-section (2) of Section 5 of the said Act in respect of a sale of goods made to the petitioner, before it was registered and, as such, the petitioner was called upon to produce the books and documents and prefer objection and adduce evidence, if any, on the specified date and time i.e., 30th October, 1973. Gist of the proposed order was also mentioned in the said notice. It is stated therein that since the petitioner had purchased Biri leaves and hessian worth Rs. 1,95,255.33 during the period from 5th June, 1972 to 4th November, 1972, by issuing declaration n form XXIVA and XXIV, petitioner had committed an offence for which a penalty of Rs. 15,000/- was proposed to be imposed under the Section 5B of the Bengal Act. The petitioner being aggrieved moved this Court in an application under Article 226 of the Constitution and obtained the present Rule.
(3.) Mr. Chakraborty, appearing on behalf of the petitioner, contended that there was no satisfaction either before the initiation of the proceedings or at the time of imposition of penalty as to the commission of an offence by the petitioner. According to Mr. Chakraborty, the whole actions of the Commercial Tax Officer and Assistant Commissioner of Commercial Taxes were without jurisdiction. It is further contended that imposition of penalty is a quasi-criminal action and the authority while imposing penalty must have to satisfy himself that penalty was imposed not for the commission of act but for the commission of an offence. On the facts and in the circumstances of the case it is abundantly clear that the petitioner can not be said to have committed an offence within the meanting of Section 10(1) (c) of the Central Act and Section 5B of the Bengal Act. The declaration forms, submitted by Mr. Chakraborty, used by the petitioner were supplied by the respondent No. 1. In view of the further fact that the petitioner had duly made and application for registration long before that transactions and as the respondent No. 1 granted the registration certificate inobedience to the order of this Hon'ble Court, no penal action for the period between the filing of the application and granting of the same can not be taken under the law. Reliance was placed upon the decisions in Subhas Chandra Ghosh v. State of Orissa (1970) 26 STC 211. Balharshal Timber Depot v. Commissioner of Commercial Taxes & anr. (1958) 9 STC 675, Amola Bhattacharjee v. Commercial Tax Officer, Bhowanipur Charge & ors., (1972) 30 STC 482, Chandra Industries v. Punjab State & ors. (1972) 29 STC 558, and Orient Paper Mills Ltd. v. Commissioner of Sales Tax, Madhya Pradesh (1969) 23 STC 308.;