Central sales tax liability survives prior State tax payment, and penalty proceedings remain valid for non-payment of admitted tax.

Payment of Bihar State tax on coal did not extinguish Central sales tax liability on a later inter-State sale of coke; the dealer's remedy was reimbursement or refund under the Central Sales Tax Act and Bihar Sales Tax Rules, not immunity from tax. Because the admitted tax remained unpaid, initiation of penalty proceedings under section 16(9) of the Bihar Finance Act was justified. A penalty order is not vitiated by an interim stay unless the stay was communicated before the order was passed; here, the order preceded communication of the stay, so no breach was established. The challenge to the notice and penalty order therefore failed.

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Issues: (i) Whether penalty proceedings under section 16(9) of the Bihar Finance Act could be initiated against the dealer even though State tax had already been paid on coal and the subsequent sale of coke was said to attract no Central sales tax; (ii) Whether the penalty order was invalid for having been passed in breach of the interim stay order.

Issue (i): Whether penalty proceedings under section 16(9) of the Bihar Finance Act could be initiated against the dealer even though State tax had already been paid on coal and the subsequent sale of coke was said to attract no Central sales tax.

Analysis: The liability to pay Central sales tax on an inter-State sale arises under section 6(1-A) of the Central Sales Tax Act, 1956, notwithstanding that no tax would have been leviable under the State law if the sale had taken place inside the State. The fact that State tax had already been paid on the goods inside the State does not extinguish Central tax liability on the inter-State sale. In such a case, the dealer's remedy is only reimbursement or refund under section 15(b) of the Central Sales Tax Act, 1956 and rule 35 of the Bihar Sales Tax Rules, 1983. Since the dealer had not paid the admitted tax as required, initiation of penalty proceedings under section 16(9) of the Bihar Finance Act was justified.

Conclusion: The impugned notice and the penalty proceedings were valid and the challenge failed.

Issue (ii): Whether the penalty order was invalid for having been passed in breach of the interim stay order.

Analysis: A stay order merely restrains further action after it is communicated to the authority. The record showed that the penalty order had been passed before the stay order was communicated to the concerned authority. On that basis, no invalidity attached to the order on the ground of breach of the interim order.

Conclusion: The penalty order was not vitiated by violation of the interim stay order.

Final Conclusion: The dealer remained liable to Central sales tax on the inter-State sale, with only a right to reimbursement or refund of the State tax, and the writ petition challenging the notice and penalty order failed in full.

Ratio Decidendi: Payment of State tax on an earlier intra-State transaction does not dispense with liability to Central sales tax on a subsequent inter-State sale of the same goods; the remedy is reimbursement or refund, not immunity from Central tax or penalty proceedings for non-payment of admitted tax.

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