Prem Chand Pandit, J. - (1.) THE following question of law has been referred to us for our opinion by the Sales Tax Tribunal at the instance of the Assessee - Whether the imposition of the penalty of Rs. 1,800 upon the Firm under Sub -section (6) of Section 10 of the Punjab General Sales Tax Act was legal and valid in the facts and circumstances of the case.
(2.) IT has arisen in these circumstances. Firm Goyal Oil Mills of Ludhiana was engaged in the business of groundnuts etc. On 27th February, 1965, for the assessment year 1961 -62, the Assessing Authority created a liability of purchase tax to the extent of Rs. 12,871,34 regarding this firm, and it also imposed a penalty of Rs. 1,800 under Section 10(6) of the Punjab General Sales Tax Act, 1948 (hereinafter called the Act) on account of the delay in the payment of this tax by the said firm. Against this order the Firm filed an appeal before the Deputy Excise and Taxation Commissioner and the same was rejected on 17th March, 1966. Thereafter a revision was preferred and it was dismissed by the Joint Excise and Taxation Commissioner on 19th July, 1966. A second appeal before the Sales Tax Tribunal also met with the same fate on 9th April, 1968. Then an application under Section 22(1) of the Act was made by the Assessee to the Tribunal for referring the above mentioned question of law to this Court and that is how the matter has come before us. It is undisputed that the Assessee did not pay the purchase tax within time. When asked by the Assessing Authority as to why he failed to make this payment in time, he stated that the matter regarding levy of purchase tax was in dispute and that this Court had stayed assessment and recovery of this tax in a number of cases. The Assessing Authority then imposed the above mentioned penalty on the Firm.
(3.) SECTION 10 of the Act deals with the payment of tax and filing of the return by the Assessee. The penalty is imposed under Sub -section (b) thereof. The relevant part of Section 10 reads - 10. Payment of tax and returns, - (1) xx xx xx (2) xx xx xx (3) Such dealers as may be required so to do by the assessing authority by notice served in the prescribed manner and every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed: Provided that, if any dealer establishes to the satisfaction of the assessing authority that his average taxable turnover does not exceed ten per cent of his average gross turnover, the returns to be furnished by such dealer under this Sub -section shall be annual returns. (4) Before any registered dealer furnishes the returns required by Sub -section (3), he shall, in the prescribed manner, pay into a Government Treasury or the Reserve Bank of India the full amount of tax due from him under this Act according to such returns and shall furnish along with the returns receipt from such Treasury or Bank showing the payment of such amount. (5) xx xx x (6) If a dealer fails without sufficient cause to comply with the requirements of the provisions of Sub -section (3) or Sub -section (4) the Commissioner or any person appointed to assist him under Sub -section (1) of Section 3 may, after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty a sum not exceeding one and a half times of the amount of tax to which he is assessed or is liable to be assessed under Section 11 in addition to the amount of tax to which he is assessed or is liable to be assessed, and where no tax is payable, a sum not exceeding one hundred rupees. (7) xx xx x;