HINDUSTAN DRUG HOUSE Vs. STATE OF MYSORE

JUDGEMENT

(1.) These writ petitions raise common questions concerning the interpretation of section 18-A of the Mysore Sales Tax Act, 1957, hereinafter called the Act. The writ petitions are directed against the orders of the Commissioner Tax Officer, Bangalore (respondent No. 2) levying penalties under section 18-A of the Act. The main contention of the petitioners before the Commercial Tax Officer was that they have not contravened the provisions of sub-section (1) or (2) of section 18 and, therefore, no penalty could be levied on them. A number of other contentions were urged before the Commercial Tax Officer including the constitutional validity of section 18-A.

(2.) The orders impugned refer to the main contention urged by the petitioners, viz., that the provisions of sub-section (1) of section 18 have not been contravened as they have collected tax only at the specified rates. The said objection of the petitioners, however, has not been satisfactorily considered by the Commercial Tax Officer. He has not come to the conclusion that the petitioners have collected tax at rates in excess of the rates specified under Act. The contention has not been overruled by the Commercial Tax Officer. The reason for coming to the conclusion that the petitioners have contravened sub-section (1) of section 18 of the Act and therefore are liable to penalty under section 18-A was that the total amount of the tax collected by the petitioners during the respective accounting periods was in excess of the total amount of tax assessed on the total turnover determined. On the basis of the said findings, penalties equal to the actual excess amounts collected were imposed by the impugned orders.

(3.) In response to the show cause notices issued proposing to levy penalty, the petitioners had submitted that they have not contravened the provisions of sub-section (1) of section 18 of the Act and further asserted that they had collected tax only at the rates specified under the Act. They offered their explanations submitting that their annual turnovers amount to several lakhs of rupees and that in such cases there is possibility of variation in the tax collected under section 18(1) and the tax assessable on the "total turnover".