Penalty under sales tax law depends on statutory preconditions and return filing; no penalty where the required return was not filed.

Penalty under section 36(3) of the Bombay Sales Tax Act, 1959 was treated as dependent on satisfaction of the statutory preconditions for its invocation. The Court held that, in the factual setting considered, non-payment of tax with returns could not sustain penalty without the notice contemplated by section 38(4) read with rule 31, and this point was answered for the assessee. It further held that section 36(3) applies only where the assessee has filed the return required by law; because no monthly return was filed for the relevant month, the penal provision was not attracted on those facts. The references were disposed of accordingly in favour of the assessee.

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Issues: (i) Whether penalty under section 36(3) of the Bombay Sales Tax Act, 1959 could be upheld for non-payment of tax payable along with returns without issuance of notice in Form No. 26 under section 38(4) read with rule 31. (ii) Whether section 36(3) was attracted where no monthly return was filed for the relevant month and tax payment was delayed.

Issue (i): Whether penalty under section 36(3) of the Bombay Sales Tax Act, 1959 could be upheld for non-payment of tax payable along with returns without issuance of notice in Form No. 26 under section 38(4) read with rule 31.

Analysis: The controversy concerned the statutory preconditions for imposing penalty where the dealer had failed to pay the tax along with the returns. The Court followed its reasoning in the connected sales tax reference and treated the notice requirement under section 38(4) read with rule 31 as material to the validity of the penalty in the factual setting considered.

Conclusion: The question was answered in the negative and in favour of the assessee.

Issue (ii): Whether section 36(3) was attracted where no monthly return was filed for the relevant month and tax payment was delayed.

Analysis: The Court held that section 36(3) operated only in a case where the assessee had filed a return as required by law. Since the assessee had not filed the monthly return for April 1976, the statutory basis for penalty under section 36(3) was not attracted on those facts. The answer was aligned with the Court's earlier view that the penal provision did not govern a case of total non-filing of the return required by the rules.

Conclusion: The question was answered in the affirmative and in favour of the assessee.

Final Conclusion: The references were disposed of by answering the substantive penalty questions in favour of the assessee and by declining to answer the remaining questions.

Ratio Decidendi: Penalty under section 36(3) cannot be sustained unless the statutory conditions for its invocation are satisfied, and the provision does not apply where the assessee has not filed the return required by law.

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