Strict construction of penalty provisions bars extension of sales tax penalty to reassessment proceedings.

Penalty under a fiscal statute must be confined to the express scope of the charging provision. The Bombay HC noted that section 36(2)(c) of the Bombay Sales Tax Act, 1959, as it then stood, applied only where tax was assessed under section 33, while assessment and reassessment were separate processes under different provisions. The later explanation to section 36(2) could not broaden the main provision, particularly for a period partly before its operative date. Applying strict construction of penal and fiscal provisions and declining to supply a casus omissus, the court held that penalty was not leviable in reassessment proceedings under section 35.

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Issues: Whether penalty under section 36(2)(c) of the Bombay Sales Tax Act, 1959, was leviable in reassessment proceedings under section 35 of the Act.

Analysis: The opening words of section 36(2), as they then stood, confined the power to impose penalty to cases where tax was being assessed under section 33. Assessment and reassessment were treated by the Act as distinct esses under separate provisions, and the court declined to read words into the section so as to extend it to reassessment under section 35. The later explanation added to section 36(2) could not enlarge the main charging provision, especially when it operated only from 1 July 1965 and the relevant period was partly earlier. The court applied the principle that a fiscal and penal provision must be construed strictly and that a casus omissus cannot be supplied by judicial interpretation.

Conclusion: Penalty under section 36(2)(c) was not legally leviable on reassessment under section 35, and the Tribunal was right in setting aside the penalty.

Final Conclusion: The reference was answered in favour of the assessee, with costs awarded to the respondent.

Ratio Decidendi: A penalty provision in a fiscal statute cannot be extended by implication beyond its express terms, and where the legislature confines it to assessment under one section, it does not cover reassessment under a different section unless the statute clearly says so.

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