Mandatory prior approval for delegated penalty powers cannot be overridden by subordinate rules under sales tax law.

Prior approval under the proviso to section 16 was mandatory before a delegated authority could impose penalty under section 10(3) of the Central Provinces and Berar Sales Tax Act, 1947. The Bombay High Court's reasoning was that delegation of penal power remained subject to the statutory safeguard, and a subordinate authority could not act validly without satisfying that condition. It also held that entry 11-A in rule 67 could not override or dilute the proviso, because subordinate legislation cannot amend the parent Act. The penalties were therefore quashed as invalid for non-compliance with the statutory approval requirement.

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Issues: (i) Whether a penalty under section 10(3) of the Central Provinces and Berar Sales Tax Act, 1947 could validly be imposed without obtaining the previous approval required by the proviso to section 16. (ii) Whether entry 11-A in rule 67 of the Central Provinces and Berar Sales Tax Rules, 1947 could authorise the imposition of penalty so as to override the proviso to section 16.

Issue (i): Whether a penalty under section 10(3) of the Central Provinces and Berar Sales Tax Act, 1947 could validly be imposed without obtaining the previous approval required by the proviso to section 16.

Analysis: Section 16 permits delegation of the Commissioner's powers, but the proviso specifically requires previous approval before the delegated authority exercises the power to impose penalty under section 10(3). That requirement is mandatory and controls the exercise of the penal power. A subordinate authority cannot validly impose the penalty unless the statutory condition of prior approval is satisfied.

Conclusion: The penalty imposed without compliance with the proviso to section 16 was invalid and could not be sustained.

Issue (ii): Whether entry 11-A in rule 67 of the Central Provinces and Berar Sales Tax Rules, 1947 could authorise the imposition of penalty so as to override the proviso to section 16.

Analysis: Rule-making power under section 28(2)(n) extends only to prescribing conditions subject to which delegation may be made under the first part of section 16. It does not authorise rules to neutralise or dilute the proviso, which is a plenary statutory restriction on the exercise of delegated penal power. A rule cannot take away or amend the operation of the parent Act, and entry 11-A could not be read as displacing the statutory requirement of previous approval.

Conclusion: Entry 11-A was ultra vires to the extent it purported to override the proviso to section 16, and it did not validate the penalties.

Final Conclusion: The penalties were quashed because the statutory safeguard of prior approval was not complied with, and the impugned rule could not override the Act.

Ratio Decidendi: A delegated authority cannot impose a statutory penalty unless the parent Act's condition of previous approval is fulfilled, and subordinate legislation cannot override or dilute a mandatory proviso in the enabling Act.

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