V. K. SINGHAL, J. - (1.) THE assessing authority has filed this revision under the provisions of section 15 of the Rajasthan Sales Tax Act, 1954, challenging the order of the Rajasthan Sales Tax Tribunal dated October 26, 1989, in which following questions of law have been raised : (i) Whether, in the facts and circumstances of the case, the Tribunal was justified in not upholding the penalty imposed under section 16 (1) (e) of the Rajasthan Sales Tax Act ? (ii) Whether, in the facts and circumstances of the case, the Tribunal was justified in reducing the penalty imposed under section 16 (1) (j) of the Act from Rs. 8,000 to Rs. 2,000 ? Brief facts of the case are that the assessee is a dealer in electric goods and steel pipes. During the period April 12, 1981 to April 1, 1982, i. e. , 1981-82 the assessee has effected the sale of Rs. 1,05,030 to the Executive Engineer, P. H. E. D. of steel pipes on which 4 per cent tax was shown payable in the return. At the time of assessment, it was found by the assessing authority that the assessee has collected 10 per cent tax and the tax at 4 per cent only was deposited. It was stated before the assessing authority that there is a dispute with regard to the rate of tax with the buyer. THE assessing authority levied penalty for evasion of tax by submitting wrong return and showing the said sale at the rate of 4 per cent under section 16 (1) (e) of Rs. 9,450 and has levied interest under v of Rs. 2,350 and a further penalty of Rs. 8,000 was levied under section 16 (1) (j) of the Rajasthan Sales Tax Act. This entire liability was created in respect of difference of amount of 6 per cent, which comes to Rs. 6,301. 78. In the assessment order, however, the tax was levied at 4 per cent and the amount of difference of tax at 6 per cent was not added in the computation or in the liability in respect thereof which was created by the assessing authority. In the appeal preferred to the Deputy Commissioner (Appeals), it was submitted that the said amount was credited in the contingency liability account of the buyer and nothing was concealed from the books or the return and the Assistant Commercial Taxes Officer had signed this account at the time of survey on December 22, 1983. According to the assessee, the buyer is a creditor of this amount and the amount has been shown as liability in the balance sheet. THE appellate authority came to the conclusion that there was no mens rea or misrepresentation or submission of incorrect return and, therefore, penalty of Rs. 9,450 is not justified. THE said penalty was set aside. THE levy of penalty under section 16 (1) (j) was upheld on the ground that before the date of survey by the Assistant Commercial Taxes Officer, no note was given in the return submitted that the tax had been collected at 10 per cent. THE levy of interest was set aside on the ground that the tax has been held payable at 4 per cent, which has already been deposited and as such interest is not leviable. THE appellate authority also observed that in respect of the amount retained by him, the provisions of section 23-B could be invoked.
(2.) AGAINST the above order, the appeals were preferred before the Rajasthan Sales Tax Tribunal by the assessee as well as by the assessing authority. The Sales Tax Tribunal came to the conclusion that the maximum penalty leviable under section 16 (1) (j) is Rs. 2,000 and therefore, the penalty of Rs. 8,000 cannot be upheld. The reasoning for upholding penalty to the extent of Rs. 2,000 was that though the assessee has collected excess amount of tax and credited the same in the contingency account of the buyer, but the said amount has not been refunded so far. The order of the Deputy Commissioner (Appeals) setting aside the interest and penalty under section 16 (1) (e) was upheld. The submission of Mr. Bafna on behalf of the assessing authority is that section 16 (1) (j) provides for forfeiture of amount collected by way of tax and the penalty is in addition to that. It is contended that the amount of Rs. 8,000 should be considered to include the amount of tax collected and retained as forfeited and the balance amount of penalty. According to Mr. Bafna, forfeiture itself is a penalty and since the assessee had not refunded the, amount to the buyer and had only credited in the contingency account, the forfeiture and penalty was justified. The assessing authority has imposed the penalty and forfeited the amount by one order as both the actions are contemplated under section 16 (1) (j) and, therefore, the composite figure has been mentioned therein. Reliance has been placed on the decision of the Supreme Court in Joshi, Sales Tax Officer v. Ajit Mills Limited [1977] 40 STC 497. I have considered over the arguments of Mr. Bafna. The provisions of section 16 (1) (j) provides that if any person being a registered dealer collects any amount by way of tax in excess of the tax payable by him, then in addition to the amount collected by way of tax which shall be liable to forfeiture to the State Government, a sum not exceeding Rs. 2,000 could be levied by way of penalty. The authority relied upon by Mr. Bafna refers that the forfeiture is a kind of penalty and the word "forfeited" may bear meaning "liable to forfeiture" at the will of the person to whom the right of forfeiture is given and does not, in every case, imply Automatic forfeiture. It has further been observed that the Commissioner will issue a notice to the assessee to show cause why a penalty, with or without forfeiture, should not be imposed on him. Such a notice with specific reference to forfeiture, points to an option in the Commissioner to forfeit or not to forfeit or partly to forfeit. From the above observations of the Supreme Court, it is evident that though the action of the assessing authority in forfeiture is a penal action, but it cannot be considered that any amount can be forfeited without issue of any notice or that a notice be issued proposing levy of penalty without any indication of the forfeiture of the amount or part thereof and then the penalty which is levied could be inferred as including the forfeiture as well as penalty. The Supreme Court has further proceeded to observe that "we may go a step further to hold that it is fair and reasonable for the Commissioner to consider any undertaking given by the dealer that he will return the amounts collected from purchasers to them. The humanism of a provision may bear upon its constitutionalism. " It was further held that "moreover, our construction obligates the State not to forfeit sums already returned, undertaken to be returned and the like. Our directions that the State shall disgorge the sums, by some easy process, back to the buyers helps the dealer against claims from the former". The honourable Supreme Court has also observed that the word "collected" means "collected and kept as his" by the trader. If the dealer merely gathered the sum by way of tax and kept it in suspense account because of dispute about taxability or was ready to return it if eventually it was not taxable, it was not collected. "collected", in an Australian Customs Tariff Act, was held by Griffith, C. J. , not "to include money deposited under an agreement that if it was not legally payable it will be returned" : (Words and Phrases, page 274 ). On the basis of this decision, the Supreme Court has held that "collected" will not cover the amounts gathered tentatively to be given back if found non-exigible from the dealer. From the above judgment of the honourable Supreme Court, it is evident that the proceedings for forfeiture and penalty are separate and show cause notice is required to be issued to the assessee as to why penalty with or without forfeiture should not be imposed. There may be circumstances, where it could be considered that the amount had not been collected by the assessee, since it had already been refunded or that he is ready to return, in that case no action for forfeiture shall be taken. There may be cases where there can be part forfeiture and thus the proceedings for forfeiture and penalty have to be taken independently though may be taketi simultaneously. In the present case, no notice for forfeiture of the amount of alleged excess collection was ever issued. Even no finding has been given as to whether the said amount could be said to have been collected in excess and whether the assessee was ready to give an undertaking to return the amount collected to the purchasers and, therefore, it cannot be presumed that the proceedings for forfeiture were taken at all. The present proceedings were only, in respect of levy of penalty under section 16 (1) (j) for which maximum amount of penalty leviable is Rs. 2,000 under section 16 (1) (j) and as such the Tribunal was justified in reducing the maximum penalty imposable to Rs. 2,000. Whether the penalty of Rs. 2,000 could be levied or not is not a subject-matter of dispute in this revision and, therefore, no decision is given on that point and it is held that the maximum penalty imposable under section 16 (1) (j) was Rs. 2,000 and as such the Tribunal was justified in reducing it from Rs. 8,000 to Rs. 2,000 only.
(3.) REGARDING penalty under section 16 (1) (e) of the Rajasthan Sales Tax Act, suffice to say that the transactions were existing in the books of accounts and were shown in the return. The assessments have been framed accepting the figure of turnover and as the tax payable has been determined in accordance with the return at 4 per cent, it could not be said that there is any wrong submission of particulars in the return. The Deputy Commissioner (Appeals) and the Sales Tax Tribunal have held that there was no mens rea and no offence under section 16 (1) (e) has been committed by the assessee. If the amount has been collected on a particular transaction at a rate higher than payable, then it is not an offence under section 16 (1) (6) and as discussed above, it will depend on the facts and circumstances of the case as to whether the offence under section 16 (1) (j) has been committed or not. In the present case, penalty under section 16 (1) (j) was upheld and as such it could not be said that any offence under section 16 (1) (e) has been committed. The particulars given in the return were correct and there is no column in the return where the amount of tax collected has to be shown. The return has contemplated only the tax payable, which has to be shown therein and not the tax collected. No offence under section 16 (1) (e) can be said to have been committed in the facts and circumstances of the case and therefore, the Tribunal was justified in upholding the order of the Deputy Commissioner (Appeals) for quashing the penalty levied under section 16 (1) (e) of the Act. In the result, the revision petition is dismissed. No order as to costs. Petition dismissed. .;