Dishonoured cheque with sales tax return triggers statutory penalty consequence without separate proof of insufficient funds.

A return under the Orissa Sales Tax Act had to be accompanied by payment of the admitted tax, and a cheque that is dishonoured on presentation does not count as a valid return for the purpose of section 11(3). The dealer remained responsible for ensuring funds were available when the cheque was issued and presented within its validity period. The text states that the Tribunal erred in requiring separate proof of absence of funds at the time of issue and in applying discretionary penalty principles from a different context; the statutory consequence followed from dishonour itself.

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Issues: Whether, having regard to the explanation to section 11(3) of the Orissa Sales Tax Act, 1947, the Tribunal was justified in deleting the penalty when the dealer's return was accompanied by a cheque that was dishonoured on presentation.

Analysis: The return under the sales tax scheme was required to be accompanied by payment of the admitted tax, and the explanation to section 11(3) expressly provided that a return accompanied by a cheque which is dishonoured for payment is not to be treated as a return for the purpose of that section. Once the cheque was issued and presented within its validity period, it was the dealer's obligation to ensure sufficient funds were available so that the cheque could be honoured. The Tribunal erred in treating the matter as though the department had to prove absence of funds on the date of issue and in relying on the discretionary penalty principles applicable to a different context.

Conclusion: The Tribunal was not justified in knocking off the penalty; the answer was against the assessee and in favour of the Revenue.

Ratio Decidendi: Where a statute declares that a return accompanied by a dishonoured cheque is not a valid return for the purpose of penalty provisions, the dishonour itself attracts the statutory consequence without requiring separate proof of want of funds at the time of issue.

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