Court directs Sales Tax Tribunal to decide petitioner's application under section 22(1) of Punjab Act.

The court allowed the petition, directing the Sales Tax Tribunal to decide the petitioner's application under section 22(1) of the Punjab Act on its merits. If questions of law arose from the order, they were to be referred to the High Court. The court held that the term "tax" in section 22(1) includes both tax assessed and penalty imposed, allowing for references on questions of law arising from orders imposing penalties. Each party was to bear its own costs due to the complexity of the matter.

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Issues Involved:
1. Misuse of the certificate of registration.
2. Imposition of penalty.
3. Competence of the application under section 22(1) of the Punjab General Sales Tax Act.
4. Interpretation of the term "tax" in section 22(1) of the Punjab General Sales Tax Act.
5. Reference to the High Court on questions of law arising from the order of the Sales Tax Tribunal.

Detailed Analysis:

1. Misuse of the Certificate of Registration:
The petitioner, a firm dealing in kerosene oil and lubricants, was found by the Assessing Authority to have misused its certificate of registration. The firm purchased goods from registered dealers in Haryana using E forms for consumption in the Union Territory of Chandigarh but instead sent the goods to its branches in Khanna and Doraha in Punjab. A penalty of Rs. 7,500 was imposed for this misuse.

2. Imposition of Penalty:
The penalty was imposed under the provisions of the Punjab General Sales Tax Act for the misuse of the registration certificate. The penalty was upheld by the Deputy Excise and Taxation Commissioner and the Sales Tax Tribunal, Chandigarh. The petitioner further sought to challenge the imposition of the penalty by filing an application under section 22(1) of the Punjab Act, which was dismissed by the Tribunal on the ground that penalty was not included in the expression "tax" used in section 22.

3. Competence of the Application under Section 22(1):
The petitioner filed an application under section 22(1) of the Punjab Act for referring ten questions of law arising out of the Tribunal's order. The application was dismissed by the Tribunal on the basis that penalty does not fall under the term "tax" as per section 22, rendering the application incompetent.

4. Interpretation of the Term "Tax" in Section 22(1):
The core issue was whether the term "tax" in section 22(1) includes penalty. The court examined the relationship between tax and penalty, noting that penalty has a direct connection with the sales tax to which a dealer is assessed and is recoverable in the same manner as the tax assessed. The court referenced several precedents, including:
- C.A. Abraham v. Income-tax Officer, Kottayam: The Supreme Court held that penalty is an additional tax imposed due to the dishonest or contumacious conduct of the assessee.
- Commissioner of Income-tax, Andhra Pradesh v. Bhikaji Dadabhai and Co.: The Supreme Court reiterated that penalty is an additional tax and is recoverable in the same manner as the original tax.
- Viswa & Co. v. State of Gujarat: The Gujarat High Court held that questions relating to the imposition of penalty could be referred to the High Court under a provision identical to section 22(1) of the Punjab Act.

The court concluded that the term "tax" in section 22(1) includes both tax assessed and penalty imposed, allowing for a reference on a question of law arising from the Tribunal's order imposing a penalty.

5. Reference to the High Court on Questions of Law:
The court emphasized that excluding penalty from the term "tax" could lead to anomalous situations where a dealer could not recover an illegally imposed penalty if the tax assessment was later found to be illegal. Therefore, it was reasonable to infer that the Legislature intended to allow references to the High Court on questions of law arising from orders imposing penalties.

Judgment:
The petition was allowed, and the Sales Tax Tribunal, Chandigarh, was directed to decide the petitioner's application under section 22(1) of the Punjab Act on merits. If any question or questions of law were found to arise from its order, those questions were to be referred to the High Court. The parties were left to bear their own costs due to the complexity of the matter.

Petition allowed.

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