Substantive charging provision controls penalty liability; incorporated procedural provisions cannot create a penalty where the statute does not authorise it.

The Entry Tax Act operates as a self-contained scheme: Section 4 provides the charging provision, while Section 4(3) permits penalty only where accompanying documents are fake or false. Section 6 incorporates specified provisions of the General Sales Tax Act for limited procedural purposes and does not create an independent basis for penalty. A machinery or incorporated provision cannot be used to impose penalty without a substantive statutory charge, and on the stated facts the documents were not found to be fake or false, so the statutory precondition for penalty was absent. The proposed reference questions were also treated as not arising from the Tribunal's actual decision.

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Issues: (i) Whether the questions proposed by the petitioners arose out of the Tribunal's order and were referable to the High Court; (ii) Whether penalty could be sustained by invoking provisions of the General Sales Tax/VAT regime when the goods were admittedly liable to entry tax under the Entry Tax Act and the Act itself contained only a limited penalty provision.

Issue (i): Whether the questions proposed by the petitioners arose out of the Tribunal's order and were referable to the High Court.

Analysis: The reference jurisdiction could be exercised only where the question of law actually arose from the proceedings decided by the Tribunal. Once the petitioners accepted that the seized goods were liable to entry tax under the Entry Tax Act, the controversy as framed by them on the effect of invoking one provision instead of another did not survive as a referable question. The Court treated the proposed questions as unrelated to the real basis of the Tribunal's decision.

Conclusion: The questions were not referable to the High Court.

Issue (ii): Whether penalty could be sustained by invoking provisions of the General Sales Tax/VAT regime when the goods were admittedly liable to entry tax under the Entry Tax Act and the Act itself contained only a limited penalty provision.

Analysis: The Entry Tax Act was held to be a self-contained scheme. Section 4 provided the substantive charging provision for entry tax and Section 4(3) authorised penalty only where the accompanying documents were fake or false. Section 6 merely incorporated specified procedural provisions of the General Sales Tax Act for limited purposes and did not create a new charging source for penalty. A penalty being a statutory liability could not be imposed unless a substantive charging provision existed, and a machinery provision could not be read to create such liability. On the facts, the documents were not found to be fake or false, so the precondition for penalty under the Entry Tax Act was absent.

Conclusion: The penalty imposed under the borrowed VAT/GST provisions was unsustainable.

Final Conclusion: The petition failed because the impugned questions did not warrant reference and the penalty could not be justified by resort to provisions that did not supply a substantive charging basis under the Entry Tax Act.

Ratio Decidendi: A penalty can be imposed only by a substantive charging provision, and a machinery or incorporated procedural provision cannot be used to create penalty liability where the parent statute does not itself authorise it.

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