Penalty for defective sales tax return fails where no valid prescribed authority existed and validation law was not retrospective.

Penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954 could not be sustained where the return required under section 7(1) was not filed before a valid prescribed authority. A return lodged otherwise was not a valid return for penalty purposes because, in the absence of a properly constituted authority, the filing requirement was not satisfied. The validating legislation cured defects in assessment and administrative action, but it did not retrospectively create a penal offence or deem earlier defective returns valid. Penal liability could arise only for conduct that was an offence under the law as it stood when done, so the penalty finding remained against the revenue.

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Issues: Whether penalty under section 16(1)(e) of the Rajasthan Sales Tax Act, 1954 could be sustained when the return was not submitted to a valid prescribed authority and the validating law did not retrospectively create the offence.

Analysis: The return under section 7(1) had to be filed before the prescribed authority. Where no properly constituted or prescribed authority existed, a return submitted otherwise could not be treated as a valid return for the purpose of penalty. The validating legislation cured defects relating to assessment and administrative action, but it did not retrospectively create a penal offence or deem earlier defective returns to be valid. Penal liability could arise only for conduct that was an offence under the law as it stood when committed.

Conclusion: Penalty under section 16(1)(e) could not be imposed on the basis of such a return, and the finding against penalty was upheld in favour of the assessee.

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