A.P.SEN, J. - (1.) THIS writ petition, filed by M/s Man Industrial Corporation Limited. Jaipur, which is the dealer registered under the Central Sales Tax Act, 1955, is directed against the order of the Commercial Taxes Officer Circle 'B', Jaipur City dated February 12, 1968 imposing penalty of Rs. 835/ - under Section 16(1)(b) and Rs. 40,000/ - under Section 16(1)(c) of the Rajasthan Sales Tax Act, 1954. The penalty has been imposed due to delay in submission of its returns under the Central Sales Tax Act for the quarters ending 31st Marct, 1965 and for the delay in payment of tax under that Act.
(2.) THE short question involved in the petition is whether any penlty could be levied under Section 16(1)(b) and (c) of the Rajasthan Salts Tax Act either for delay in submission of returns under (he Central Sales Tax Act or for any delay ID payment of tax under that Act. The decision turns on a proper construction of Section 9(2) of the Central Sales Tax Act, 1956, which enacts: Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, reassess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, re -assess, collect and enforce payment of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable under the general sales tax law of the State, and for this purpose they may exercise all or any of the powers they nave under the general sales tax law of the State, and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or petition of such family, recovery of tax from third parties, appeals, reviews, revision, refer ness, refunds, rebates, penalties, compounding of offences, and treatment of documents furnished by a dealer as confidential, shall apply accordingly: Provided that if an any State or part thereof there is no genera sales tax law in force, the Central Government may by issue made in this behalf, make necessary provision for all or any of the matters specified in this sub -section. The Act contains no substantive provision for levy of penalty but only adopts the machinery of the State Acts for the purposes on assessment and recovery on tax and penalties.
(3.) THERE was a sharp conflict of opinion between the different High Courts as to the purport and effect of Section 9(2) of the Act. While the High Courts of Madhya Pradesh, Punjab and Haryana and Mysore were of the view that the provisions contained in the State Acts were but only a machinery for the assessment and collector of taxes due under the Central Sales Tax Act and, therefore, for breach of any provision of that Act, penalty could be levied under the State Acts, a view to the contrary was taken by the High Courts of Madras, Calcutta, Mysore and Orissa. These High Courts were of the view tint in the thence of a substantive provision for the levy of a penalty under the Central Act, no penalty could be imposed with the aid of the provisions for levy of penalty under the State Acts. The conflict has, mw, been set at rest by their Lordships in Khemka and Co. v. State of Maharashtra (S.C.) 1975 (35) STC 571 (AC), Their Lordships have reiterated the same view in a latter case namely, Manganese Ore (I) Ltd. v. Regional Asst Commr (S.C.) 1976 (37) STC 514. In Khemka and Co. v. State of Maharashtra 1975 (35) STC 571 (AC), Ravi C.J., in delivering the judgment of the majority observed that 'penalty is not merely sanction, It is not merely adjunct to assessment. It is not merely consequential to aesessment. It is not merely machinery Penalty is in addition to tax and is a liability under the Act'.. 'There must be a charging section to create liability. There roust be first a liability created by the Act. Second, the Act must provide for assessment. Third, the Act must provide for enforcement of the taxing provisions.' The learned Chief Justice then stated that 'the mere fact that there is machinery for assessment, collection and enforcement of tax and penalty in the State Act dose not mean that the provision for penalty in the State Act is treated as penalty under the Central Act.;