TaxTMI 
TaxTMI 
1981 (2) TMI 204
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....t, 1959. This notice was in the form as then prescribed. 2.. The order of the Sales Tax Officer was challenged by the respondents before the Sales Tax Tribunal. By its judgment dated 27th September, 1971, the Tribunal set aside the order of the Sales Tax Officer on the ground that the notice in form 29 which had been issued by the Sales Tax Officer was not a proper notice. 3.. On 9th August, 1969, form 29 prescribed under the Bombay Sales Tax Rules, 1959, was amended. Thereafter, the Sales Tax Officer issued a fresh notice under section 37 of the Bombay Sales Tax Act in the amended form 29. It may be pointed out that the previous notice which had been given to the respondents was a handwritten notice in which it had been stated: "Whereas I have reason to believe that during the period from 1st April, 1964, to 13th August, 1965, not being a dealer liable to pay tax under the B.S.T. Act, 1959, you have collected by way of tax the sum of Rs. 2,005.91....." In the new notice which was issued in a printed form, the respondents were charged with the contravention as mentioned in printed clause (ii) of the notice to the following effect: "not being a registered dealer and liab....
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....was the date when form 29 was amended, they have acquired a vested right not to have the amount forfeited. They further submit that this substantive protection against forfeiture which they have acquired cannot now be taken away by the subsequent amendment of form 29. 7.. The entire submission of the respondents rests on a false major premise because the submission is based on an assumption that, under section 37 of the Act read with old form 29, the respondents had an immunity against forfeiture. This submission is wholly unacceptable. Under section 46 of the Bombay Sales Tax Act, there is a prohibition against collection of tax in certain cases. Subsections (1) and (2) of section 46 which are relevant in the present case are as follows: "46. (1) No person shall collect any sum by way of tax in respect of sales of any goods on which by virtue of section 5 no tax is payable. (2) No person who is not a registered dealer and liable to pay tax in respect of any sale or purchase, shall collect on the sale of any goods any sum by way of tax from any other person and no registered dealer shall collect any amount by way of tax in excess of the amount of tax payable by him ....
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.... in sub-section (2) really means 'No person other than or except a registered dealer liable to pay tax in respect of any sale or purchase shall collect...... The prohibitions imposed by section 46(1) and (2) are complete. Section 46(1) and (2) properly analysed contain three prohibitions: (1) a prohibition against any person, whether a registered dealer or not, from collecting any sum by way of tax in respect of sales of taxfree goods, (2) a prohibition against any person who is not a registered dealer liable to pay tax from collecting any sum by way of tax on the sale of any goods and (3) a prohibition against a registered dealer from collecting any amount by way of tax in excess of the amount of tax payable by him in respect of a transaction of sale or purchase." 9.. In the present case, the respondents have violated the second prohibition as explained in the above decision in the case of Ramkrishan Kulwantrai v. Commissioner of Sales Tax [1979] 44 S.T.C. 117. i.e., although they were not registered dealers at the relevant time, they have collected tax. Under the scheme of section 46(2), a registered dealer who is liable to pay tax is entitled to collect a sum by way of tax on....
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....in sub-section (1), while the procedure for imposing a penalty or for forfeiture is prescribed in sub-sections (2) and (3). Thus, under sub-section (2) of section 37, the Commissioner is required to serve a notice in the prescribed form requiring the person to show cause why a penalty or forfeiture or both should not be imposed on him. Thereafter, under sub-section (3), the Commissioner is required to hold an inquiry and make such order as he thinks fit. Sub-sections (2) and (3), therefore, do not give any substantive right to the parties but they prescribe a procedure which must be complied with before a penalty can be levied or an order of forfeiture can be made. 13.. Under the prescribed procedure, therefore, before the Commissioner can make any inquiry, he must give to the party concerned a notice in the prescribed form. Under the Bombay Sales Tax Rules which have been framed under the Bombay Sales Tax Act, the form of notice required to be given before any action can be taken under section 37 is prescribed by form 29. The old form 29 which was prescribed prior to 9th August, 1969, covered only two grounds relevant for the present purposes for levying penalty or or....
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....mbay Sales Tax Act, 1959. Under section 34 of the Indian Income-tax Act, 1922, the basis for reopening the assessment is the belief of the Income-tax Officer that, by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to income-tax has escaped assessment for that year, or has been under-assessed, or assessed at too low a rate, etc. In the alternative, the Income-tax Officer can take steps under section 34 if he has reason to believe, in consequence of information in his possession, that income chargeable to income-tax has escaped assessment, etc. 17.. Under the Bombay Sales Tax Act, 1959, the prohibitions against collection of tax in certain cases are expressly provided in section 46. The grounds for taking action are, therefore, expressly laid down in the statute and are not a matter of belief of the Sales Tax Officer. Two types of consequences of violating these provisions are laid down in section 63(1)(h) and section 37 of the Act. Under section 63(1)(h), a person is liable to prosecution for contravening the....