1973 (6) TMI 53

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....n of proceedings for recovery of the penalty incurred under section 13(2) of the Act. In order to appreciate the contentions urged on behalf of the petitioners, it is necessary to set out briefly the relevant facts. The petitioners are dealers under the Act. Assessments were made and demand notices were served on them on different dates. The petitioners did not pay the taxes demanded within the time allowed and, consequently, they became defaulters. The Commercial Tax Officer who had made the assessments wrote letters to the petitioners drawing their attention to the provisions of section 13(2) of the Act and to pay the penalty incurred. The letters further stated that if the penalty amounts were not paid within the dates specified, coer....

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....as that the respondent-Commercial Tax Officer-did not pass any order imposing penalty under section 13(2) of the Act and that he did not grant to the petitioners any opportunity of being heard before demanding the penalty amounts. Therefore, the learned counsel urged that the respondent is not entitled to take coercive action for recovery of the penalty amounts. The learned counsel conceded that there is no express provision. made in the Act requiring the Commercial Tax Officer to make an order imposing penalty; but, he argued that by implication it has to be inferred that the Commercial Tax Officer is required to make an order and if he is required to make an order, the rules of natural justice require that the defaulting assessee shoul....

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....t the offender is not liable to act in the manner prescribed by the statute." Sections 9(1) and 25(1) of the Orissa Act with which the Supreme Court was concerned, read thus: "9. Registration of dealers.-(1) No dealer shall, while being liable under section 4 to pay tax under this Act, carry on business as a dealer unless he has been registered under this Act and possesses a registration certificate." "25. Offences and penalties.-(1) Whoever- (a) carries on business as a dealer in contravention of subsection (1) of section 9............... shall be punishable with imprisonment of either description which may extend to six months or with fine not exceeding one thousand rupees or with both ........" It will be seen from the abo....

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....hat the collector, without authority, and on his motion, has remitted a part of the tax, or that the person taxed is financially embarrassed, or that the proceeds of the tax are to be devoted to an unlawful purpose." The same learned author has stated at page 2535 that "in tax laws penalties are imposed for mere delinquencies, in order to hasten payment, and they are also imposed as a punishment for frauds, evasions, and neglect of duty."   If financial embarrassment or personal disability affords no excuse for non-payment where payment of penalty is fixed by the statute, it cannot-be contended that the penalty is not incurred when reasonable excuse for non-payment is shown by the defaulter. To afford relief in hard cases like insan....