Court upholds penalty order revival & section 9 amendments, dismisses petition without costs, orders security refund.

The court dismissed the petition, upholding the revival of the penalty order by the amending Act, the validity of sub-section (2A) inserted in section 9 of the Central Sales Tax Act, and the constitutional validity of section 9(1) of the amending Act. The petition was dismissed without any order as to costs, and the security amount was ordered to be refunded to the petitioner.

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Issues Involved:
1. Revival of the penalty order by the amending Act.
2. Validity of sub-section (2A) inserted in section 9 of the Central Sales Tax Act.
3. Constitutional validity of section 9(1) of the amending Act.

Detailed Analysis:

1. Revival of the Penalty Order by the Amending Act:
The petitioner contended that the amending Act does not revive the penalty order set aside by the Commissioner. The court examined section 9 of the amending Act, particularly sub-sections (1) and (2), which retrospectively validated penalties imposed under the general sales tax laws of the States. The court noted that the amending Act was enacted to counteract the Supreme Court's decision in Khemka & Co. v. State of Maharashtra [1975] 35 STC 571 (SC), which had held that the State Acts' penalty provisions did not apply to the Central Act. The court emphasized the "notwithstanding" clause in sub-section (2), which overrides any judgment, decree, or order, thus reviving the penalty order. The court referenced the case of Laxmandas v. State of M.P. [1981] 47 STC 197, affirming that previously canceled penalty orders become operative due to the validating provisions.

2. Validity of Sub-section (2A) Inserted in Section 9 of the Central Sales Tax Act:
The petitioner argued that sub-section (2A) amounted to excessive delegation, allowing State legislatures to impose penalties for the Central Act. The court reviewed the legislative intent and policy behind sub-section (2A), which aimed to ensure uniformity in penalties related to the assessment, reassessment, collection, and enforcement of the Central sales tax and State sales tax. The court found that Parliament had determined the policy of complete current uniformity and enacted sub-section (2A) to give effect to this policy. The court rejected the argument of excessive delegation, citing the principle that legislative policies can be liberally construed to uphold the statute. The court also referenced the U.S. Supreme Court case United States v. Sharpnack, which upheld similar legislative decisions for maintaining uniformity.

3. Constitutional Validity of Section 9(1) of the Amending Act:
The petitioner challenged the retrospective application of penalties under section 9(1) of the amending Act. The court clarified that section 9(1) incorporated all provisions relating to penalties from the general sales tax laws of States in force from 5th January 1957, up to the commencement of the amending Act. The court found no constitutional impediment for Parliament to retrospectively incorporate existing State laws for the Central Sales Tax Act. The court emphasized that Parliament's decision to apply these laws was to ensure uniformity and validate previously imposed penalties. The court concluded that there was no element of delegation or abdication in section 9(1) and upheld its constitutional validity.

Conclusion:
The court dismissed the petition, upholding the revival of the penalty order by the amending Act, the validity of sub-section (2A) inserted in section 9 of the Central Sales Tax Act, and the constitutional validity of section 9(1) of the amending Act. The petition was dismissed without any order as to costs, and the security amount was ordered to be refunded to the petitioner.

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