COMMISSIONER OF SALES TAX Vs. A-1 ENGINEERING COMPANY

JUDGEMENT

(1.) This is a reference purported to be made under section 34(1) of the Bombay Sales Tax Act, 1953, (hereinafter referred to as "the said Act"), at the instance of the Commissioner of Sales Tax.

(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 Sales Tax Officer in respect of the tax payable by them under the said Act and demand notices were issued against them on 30th November, 1957. These demand notices determined the respondents' liability to pay tax as Rs. 7,923.28. The respondents preferred an appeal against this assessment to the Assistant Commissioner of Sales Tax and thereafter filed a revision application before the Deputy Commissioner of Sales Tax. In both these proceedings the respondents failed. The respondents then went by way of further revision before the Sales Tax Tribunal but there also their application met with the same fate and was dismissed. All this was prior to 7th August, 1959. By 7th August, 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 September, 1965, the Sales Tax Officer issued a demand notice in form XVII directing the respondents to pay the penalty set out therein under section 16(4) of the said Act for late payment of tax. The respondents preferred an appeal against this order of the Sales Tax Officer to the Assistant Commissioner of Sales Tax, who dismissed the same. The respondents then went in revision before the Deputy Commissioner of Sales Tax, who reduced the penalty but declined to set aside the same. The respondents then went by way of further revision before the Tribunal. The Tribunal came to the conclusion that on a proper construction of the provisions of section 16(4) of the said Act and, in particular, the proviso thereto once the respondents had filed an appeal or a revision application, the Sales Tax Officer no longer had any authority or jurisdiction to impose any penalty under section 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 : "Whether, on the facts and in the circumstances of the case, the Sales Tax Officer had acted without jurisdiction in issuing the notice in form XVII for levy of the penalty under section 16(4) of the Bombay Sales Tax Act, 1953, in respect of the tax not paid in time, after the appellate and revisional authorities had passed their respective orders ?"

(3.) At the outset, Mr. Patil, the learned counsel for the respondents, raised a preliminary objection to the maintainability of the reference. It was submitted by him that the impugned order of the Tribunal did not affect any liability of the respondents to pay the tax under the said Act but related merely to the liability of the respondents to pay a penalty and, hence, no reference could be made to this court under section 34(1) of the said Act. In order to appreciate this contention, it is desirable to set out the provisions of section 34(1) of the said Act at this stage : "34. (1) Within ninety days from the passing by the Tribunal of any order under sub-section (2) of section 30 or sub-section (1) of section 31 affecting any liability of any person to pay the tax, such person or the Collector may, by application in writing accompanied where the application is made by any person (other than the Collector) by a fee of one hundred rupees, require the Tribunal to refer to the High Court any question of law arising out of such order, and where the Tribunal agrees it shall draw up a statement of the case and refer it to the High Court."