Borrowed recovery machinery cannot create penalty liability under the Central Sales Tax Act; State penalty levy was invalid.

Section 9(2) of the Central Sales Tax Act, 1956 allows State authorities to use the State tax machinery to assess, collect and enforce Central sales tax, but it does not expand the substantive liabilities created by the Central Act. Penalty for delayed payment is a substantive liability, not a mere procedural incident, so State penalty provisions cannot be invoked to impose a new penalty for default under the Central Act. The Central Act's own penalty scheme remains distinct, and the borrowed State machinery is confined to recovery and enforcement. The State Sales Tax Act penalty provisions were therefore inapplicable to Central sales tax defaults, and such a levy was invalid.

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Issues: Whether, under section 9(2) of the Central Sales Tax Act, 1956, the sales tax authorities of a State could levy penalty under the State sales tax law for delayed payment of tax payable under the Central Act.

Analysis: Section 9(2) of the Central Sales Tax Act, 1956 authorises the State authorities, acting on behalf of the Government of India, to assess, reassess, collect and enforce payment of tax payable under the Central Act by using the machinery of the general sales tax law of the State. The provision does not enlarge the substantive liability under the Central Act; it only adopts the State machinery for enforcement. Penalty for default in payment is a substantive liability and not merely a procedural incident. The penalties expressly provided by the Central Act are distinct from the enforcement machinery borrowed from the State law. Accordingly, the State penalty provisions dealing with default in payment could not be invoked to create a new liability in respect of Central sales tax.

Conclusion: The penalty provisions of the State Sales Tax Act were not attracted for default in payment of tax under the Central Sales Tax Act, 1956, and the levy of such penalty was invalid.

Final Conclusion: The decision treated the Central Act as a self-contained code for liability to penalty, while confining the State Act to the machinery for assessment and recovery of Central sales tax.

Ratio Decidendi: Borrowed State recovery machinery under section 9(2) of the Central Sales Tax Act, 1956 cannot be used to create a substantive penalty liability not imposed by the Central Act itself.

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