State tax machinery under Central sales tax law can include later amendments, while statutory penalty provisions remain operative.

Section 9(3) of the Central Sales Tax Act validly allowed State sales tax machinery to be used for Central sales tax collection, including later State amendments, because the provision adopted the machinery for ancillary and procedural purposes without amounting to unconstitutional abdication. The Court also held that the penalty for tax default was governed by section 10(6) of the Punjab General Sales Tax Act, not by rule 9 of the Central Sales Tax (Punjab) Rules, since the rules dealt only with procedural compliance and punishment for breach, while the statutory penalty provision remained operative.

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Issues: (i) Whether section 9(3) of the Central Sales Tax Act, 1956 authorises the adoption of the State sales tax machinery with subsequent amendments made by the State Legislature for collection of Central sales tax; (ii) whether the penalty for non-payment of tax was governed by section 10(6) of the Punjab General Sales Tax Act, 1948 or by rule 9 of the Central Sales Tax (Punjab) Rules, 1957.

Issue (i): Whether section 9(3) of the Central Sales Tax Act, 1956 authorises the adoption of the State sales tax machinery with subsequent amendments made by the State Legislature for collection of Central sales tax.

Analysis: The provision empowered the State authorities, for the time being empowered under the State sales tax law, to assess, collect and enforce payment of Central sales tax and stated that the provisions of the State law, including those relating to penalties, would apply accordingly. The Court held that Parliament could validly use the existing State machinery and, for that ancillary and procedural purpose, adopt later amendments made by the State Legislature without amounting to an unconstitutional abdication of legislative power. The words used in the section, read with the scheme of the Act and the statement of objects and reasons, indicated that the State machinery was intended to operate as amended from time to time.

Conclusion: Section 9(3) validly permitted prospective adoption of amendments to the State sales tax law, and the challenge failed.

Issue (ii): Whether the penalty for non-payment of tax was governed by section 10(6) of the Punjab General Sales Tax Act, 1948 or by rule 9 of the Central Sales Tax (Punjab) Rules, 1957.

Analysis: Rule 7-A of the Central Sales Tax (Punjab) Rules regulated the procedural manner of furnishing information and proof of payment, while rule 9 created only a punishable offence for breach of the rules. The substantive liability to pay tax and the power to impose an additional tax penalty for default were contained in section 10(4) and section 10(6) of the Punjab Act. The Court held that the rules under the Central Act occupied a different field and did not displace the statutory penalty provision; at most, rule 9 dealt with criminal punishment for breach of the rules and did not exclude civil penalty under the State Act.

Conclusion: The penalty was rightly imposed under section 10(6) of the Punjab General Sales Tax Act, 1948, and not under rule 9 of the Central Sales Tax (Punjab) Rules, 1957.

Final Conclusion: The writ petitions failed because the statutory scheme validly applied the State machinery, including the penalty provision, to Central sales tax collection.

Ratio Decidendi: Where the Central sales tax statute adopts the State tax machinery for assessment and collection, the State law as amended from time to time may govern that machinery, and procedural rules framed under the Central Act do not displace the substantive statutory penalty for tax default unless a direct conflict exists.

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