Annual assessment unit controls penalty under sales tax law; part-year assessment alone does not trigger concealment deeming fiction.

Penalty under section 36(2)(c) read with Explanation (1) of the Bombay Sales Tax Act, 1959 could not be levied on a part-year assessment merely because the assessment order covered only part of the year. The Explanation uses the tax paid and tax assessed for "any year", and the Act treats the year as the normal unit of assessment unless it expressly allows part-year assessment or reassessment. The deeming fiction for concealment is therefore attracted only by comparison with the full statutory year, not a truncated assessment period. Penalty proceedings may be initiated during assessment or reassessment, but the levy depends on the annual tax comparison.

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Issues: Whether penalty under section 36(2)(c) read with Explanation (1) of the Bombay Sales Tax Act, 1959 could be levied for a part of the year when the assessment itself was made only for a part of the year.

Analysis: The expression used in Explanation (1) refers to the total amount of tax paid by the dealer for any year and the amount of tax assessed or reassessed for that year. The scheme of the Act distinguishes between the year as the normal unit of assessment and special provisions permitting assessment or reassessment for a part of the year only where the statute expressly so provides. On the plain language of the Explanation, the deeming fiction for concealment is attracted only when tax paid during the year is less than eighty per cent of the tax assessed for that year. Penalty proceedings may be initiated during assessment or reassessment, but levy of penalty depends on the tax paid and tax assessed for the full year as defined in section 2(37), even if the assessment order relates to only part of the year.

Conclusion: Penalty could not be levied merely because the assessment covered a part of the year. The question was answered in the negative and in favour of the assessee.

Ratio Decidendi: A deeming provision for penalty that turns on tax paid for "any year" must be applied with reference to the full statutory year, unless the statute expressly authorises a part-year basis.

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