BABULAL AND SONS Vs. ASSISTANT COMMISSIONER OF SALES TAX NAGPUR

JUDGEMENT

(1.) This petition questions the validity of the order made on 6th January, 1970, under section 57 of the Bombay Sales Tax Act, 1959, hereinafter called the Act, by the Assistant Commissioner of Sales Tax, Eastern Division, Ranges I and II, Nagpur. The period of assessment with which that order is concerned is of 1st January, 1964, to 31st December, 1964.

(2.) The petitioner is a dealer and licence-holder. He deals in foreign liquor. It appears that no return was filed though tax was paid for this period and, therefore, proceedings were initiated by issue of show cause notice on 9th February, 1967. Return was required to be filed and for the purposes of this petition it is not necessary to go into the details of that proceedings. Eventually an order was made on 28th November, 1967, by the Sales Tax Officer against the petitioner. The total turnover found by the Income-tax Officer was Rs. 5,98,720.47. Deductions were allowed till 16th December, 1964, on the ground that general sales tax at 45 per cent. was leviable on the sales. Set-off was allowed under rule 40-B in the next period and the stock as on 1st January, 1965, was estimated at worth Rs. 23,858.46. Retail sales tax was worked out and after adjustment of set-off, the tax assessed was Rs. 85,439.67. Thus, the balance worked out by giving credits for the payments already made Rs. 24,817.94. For non-submission of return penalty in the sum of Rs. 7,000 was imposed under section 36(2)(c) of the Act.

(3.) After this order, the Assistant Commissioner of Sales Tax purported to issue on 8th November, 1968, a notice styled under section 35 of the Act. Reply was given by the petitioner-assessee questioning the validity of that notice on 17th March, 1969. The notice was withdrawn on 7th April, 1969. Prior to the withdrawal, on 4th April, 1969, the Assistant Commissioner of Sales Tax issued the notice under section 57 of the Act. Accompanied to that notice was the gist of the order proposed to be made. By that order it was proposed that the sales of Rs. 6,730.50 were wrongly taxed under entry No. 22 of Schedule E, while they were taxable under entry No. 70 of Schedule C. The petitioner-assessee objected by filing his reply on 22nd May, 1969. Further, purporting to act under the very same provision of section 57 of the Act, an additional notice was issued on 17th July, 1969, along with the proposed gist of the order in which it was stated that the Sales Tax Officer had wrongly allowed resales in excess by Rs. 17,542.93 than admissible as per law and further that set-off allowed was in excess than admissible and penalty under section 36(3) was not levied for the late payment of tax for the quarters ending 31st March, 1965, 30th June, 1965, 30th September, 1965, and 31st December, 1965. By his reply of 10th October, 1969, again the assessee objected. Eventually after giving hearing the Assistant Commissioner of Sales Tax made the impugned order on 6th January, 1970, assessing the petitioner to Rs. 76,599.05 as the tax payable and further levied the penalty under section 36(3) in the sum of Rs. 8,773.95, apart from the penalty already levied under section 36(2)(c) in the sum of Rs. 7,000. The net dues payable to the revenue after giving deductions for the tax paid were raised in the sum of Rs. 37,492.57. This order thus revised the order made by the Sales Tax Officer on 28th November, 1967, with regard to the period of 1st January, 1964, to 31st December, 1964. This revisional order, inter alia, applied Schedule C, entry No. 70, in place of Schedule E, entry No. 22, with regard to sales of foreign liquor imported into India. For the purpose of the present petition at the hearing, Mr. Manohar, the learned counsel appearing for the petitioner, did not dispute that the turnover of sales with regard to which entry No. 70 of Schedule C was applied did relate to the sales of duty-paid potable foreign liquor. The revising authority further dealt with the question of deductions permitted and the set-off granted and by applying the correct rules found that the set-off allowed by the Sales Tax Officer to the dealer on the basis of the stock on 17th April, 1964, was wrong and directed its deletion. Similarly, it directed as a consequential finding the deletion with regard to the turnover of Rs. 34,246 of the stock on 17th December, 1964. As admittedly, the payments were made late under the provisions of section 36(3), the penalty was leviable but the order had omitted to do so and, therefore, by the revisional order the penalty was imposed. Thus, the original order with regard to matters, firstly, fixing of the liability with reference to Schedule C, entry No. 70, secondly, with regard to question of deductions and, thirdly, the set-off and the Rules concerning the same as on 17th December, 1964, and, lastly, the liability to pay penalty under section 36(3) and application of law with regard that the learned counsel appearing for the petitioner has raised no dispute.