COMMISSIONER OF SALES TAX Vs. A 1 ENGINEERING CO

JUDGEMENT

(1.) THIS is a reference purported to be made, under s. 34(1) of the Bombay ST Act, 1953, (hereinafter referred to as "the said Act") at the instance of the CST.

(2.) THE facts giving rise to this reference are as follows : THE respondents were a registered dealer under the said Act. In respect of the assessment period from 1st April, 1954 to 31st March, 1956 the respondents were assessed by the STO in respect of the tax payable by them under the said Act and demand notices were issued against them on 30th Nov., 1957. THEse demand notices determined the respondent's liability to pay tax at Rs. 7,923.28. THE respondents preferred an appeal against this assessment to the Asstt. CST and thereafter filed a revision application before the Dy. CST. In both these proceedings the respondents failed. THE respondents then went by way of further revision before the Tribunal but there also their application met with the same fate and was dismissed. All this was prior to 7th Aug., 1959. By 7th Aug., 1959 the respondents had deposited the full amount of tax of Rs. 7,923.28 in instalments as directed by the Collector of Bombay in recovery proceedings. After the papers went back to the lower authorities, on 11th Sept., 1965, the STO issued a demand notice in Form XVII directing the respondents to pay the penalty set out therein under s. 16(4) of the said Act for late payment of tax. THE respondents preferred an appeal against this order of the STO to the Asstt. CST who dismissed the same. THE respondents then went in revision before the Dy. CST who reduced the penalty but declined to set aside the same. THE respondents then went by way of further revision that on a proper construction of the provisions of s. 16(4) of the said Act and in particular the proviso thereto once the respondents had filed an appeal or a revision application, the STO no longer had any authority or jurisdiction to impose any penalty under s. 16(4) of the said Act and that the said power could thereafter only be exercised by the superior authorities. Arising from the judgment and order of the Tribunal the following question has been referred to us for our determination :

(3.) IT was submitted by Mr. Bhabha, learned counsel for the Department, that the jurisdiction of this Court under s. 34(1) of the said Act is an advisory jurisdiction and that we should give a liberal construction to the word "tax" used in s. 34(1) so as to advance the remedy provided by that sub- section. All these considerations referred to by Mr. Bhabha may very well be generally correct. But, these considerations cannot enable us to overlook the plain language of sub-s. (1) of s. 34 of to stretch the construction thereof beyond permissible limits. s we have already discussed, in our opinion, the word "tax" has been used by the legislature in the said Act in a sense distinct from the sense in which the term "penalty" has been used in it is not open to us merely on such general considerations as advanced by Br. Bhabha to unduly enlarge the meaning of the term "tax" used in the said sub-section so as to include within its ambit a penalty levied under s. 16(4) of the said Act. IT was submitted by Mr. Bhabha that the penalty under s. 16(4) of the said Act is inherently connected with the payment of tax in the sense that it is late payment of the tax which leads to the liability of an assessee to pay the penalty, and hence, a penalty levied under s. 16(4) should be included within the meaning of the terms "tax" used in s. 34(1) of the said Act. In our view, this submission must also be rejected. Merely because the liability to the penalty arises by reason of late payment of tax, it does not mean that there is such inherent connection between the penalty and the tax that one should be deemed to include the other. The provisions of s. 16(4) of the said Act merely show that the liability to pay a penalty is a consequence which might follow upon the late payment of tax. But, this in no way indicates that the term "tax" includes a penalty levied under s. 16(4).