1966 (9) TMI 117 - HC - VAT and Sales Tax

Court affirms sales tax penalty on Hindu undivided family trading under specific name.

Ratanlal HukumChand Versus Additional Commissioner of Sales Tax, Madhya Pradesh, Indore and Another

Ratanlal HukumChand Versus Additional Commissioner of Sales Tax, Madhya Pradesh, Indore and Another - [1967] 19 STC 92 (MP) Issues:Assessment under Madhya Bharat Sales Tax Act, imposition of penalty under section 14(1)(e), jurisdiction of Sales Tax Officer, applicability of penalty provision under Madhya Pradesh General Sales Tax Act.Analysis:The petitioner, a Hindu undivided family trading under a specific name, challenged an assessment order and penalty imposed by the Sales Tax Officer under the Madhya Bharat Sales Tax Act. The petitioner filed revision petitions seeking relief. The Sales Tax Officer assessed the petitioner under section 8(4) of the Madhya Bharat Sales Tax Act due to failure to produce account books, resulting in a tax liability determination and a penalty of Rs. 5,000. The petitioner contended that the Sales Tax Officer erred in refusing adjournment, but the Court held that the officer's actions were not unjustified or arbitrary, leading to the rejection of the plea to quash the assessment order based on this ground.The petitioner further argued that the penalty imposition was without jurisdiction under the Madhya Pradesh General Sales Tax Act, citing section 52 of the Act. The Court analyzed the proviso under section 52(1) and determined that liability for penalty is incurred when inaccurate returns are filed, irrespective of the assessment timing. It was held that the penalty matter falls under the saved rights, obligations, and liabilities of the repealed Act, allowing the Sales Tax Authorities to assess and penalize the petitioner under the Madhya Bharat Sales Tax Act, even though there was no equivalent penalty provision in the Madhya Pradesh General Sales Tax Act.The Court referenced a previous case to emphasize that the liability for penalty arises when incorrect returns are filed, regardless of the assessment date. Therefore, the Sales Tax Authorities were deemed justified in assessing and penalizing the petitioner under the Madhya Bharat Sales Tax Act. No additional grounds were raised, leading to the dismissal of the petition with costs to be borne by the petitioner. The security deposit, after deduction of costs, was ordered to be refunded to the petitioner, concluding the judgment.