TaxTMI 
TaxTMI 
1981 (12) TMI 146
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....d pay the amounts specified in column 3 of the said schedule on or before the date specified in column 4 thereof. The said schedule, which has a bearing on the decision of this case, is reproduced hereunder: SCHEDULE Period of return Last date of Amount to be paid Last date for submission of payment towards returns tax 1 2 3  ....
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....nd the payment of tax under the Central Act. Similarly, according to the department, the legal consequences following upon the enactment of rule 23A were operative even as regards the furnishing of the return and the payment of tax under the Central Act. Therefore, the department's stand is that for the period from 1st April, 1970, to 5th May, 1970, the assessee was required to furnish the return and to pay the tax due according to such return under the Central Act on or before 30th June, 1970. The assessee failed to furnish the return and pay the tax under the Central Act for the period 1st April, 1970, to 5th May, 1970, on or before 30th June, 1970. The return for the said period was furnished and the tax due according to such return was paid on 5th December, 1970. Thereupon, proceedings for imposition of penalty under section 9(1) of the Central Act read with section 36(3) of the Bombay Act were initiated against the assessee by the Sales Tax Officer. In the course of penalty proceedings, the case of the assessee, inter alia, was that it was under a bona fide impression that the permission granted on 4th January, 1967, under the Bombay Act was still operative because it was n....
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....Sales Tax Rules, 1959, no longer remained valid or operative after the enforcement of rule 23A of the Bombay Sales Tax Rules, 1959, and that, therefore, the applicant was required to file the relevant return and to pay tax payable thereon latest by 6th June, 1970? (2) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in retaining the penalty of Rs. 1,890 as imposed under section 36(3) of the Bombay Sales Tax Act, 1959, read with section 9(2) of the Central Sales Tax Act, 1956?" In view of the mistake in mentioning the date 6th June, 1970, instead of 30th June, 1970, in the course of the order of the Tribunal, the first question referred for our opinion is reframed as under with the consent of the parties: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the permission granted to the applicant by the sales tax authorities to file six monthly returns instead of quarterly returns under section 32(l) of the Bombay Sales Tax Act, 1959, read with rule 22 of the Bombay Sales Tax Rules, 1959, no longer remained valid or operative after the enforcement of rule 23A of the Bombay Sales ....
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....f of default. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. A Full Bench of this Court in Additional Commissioner of Income-tax, Gujarat v. I.M. Patel and Co. [1977] 107 ITR 214 (FB) had an occasion to consider the question of imposition of penalty under section 271(1)(a) of the Income-tax Act, 1961, which authorises the levy of penalty if the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under the Act, is satisfied that "any person has without reasonable cause failed to furnish the return of total income which he was required to furnish.........". It was there held th....
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....hether penalty was leviable at all in the instant case because it could not be said that the assessee had without reasonable cause failed to pay the tax within the prescribed time. While considering the question, the Tribunal was required to bear in mind that failure without reasonable cause to pay the tax is an ingredient of the penalty provisions and that the legal burden was on the department to establish, by leading some evidence, that Prima facie the assessee had without reasonable cause failed to furnish the return within the time limited by law. It is only when this initial burden, howsoever slight, was discharged by the department that the assessee could have been called upon to show that he had reasonable cause in not paying the tax within the time specified and the explanation offered by the assessee in that behalf was required to be tested on probabilities as in a civil case. We find that the Tribunal has nowhere applied its mind to these relevant factors and that it appears to have treated the very factum of default in payment of tax within the time limited as itself sufficient to attract penalty. Indeed, while considering the assessee's submission that it was preven....
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....ona fide though wrong belief" of the assessee as regards the continued validity of the permission granted under the Bombay Act or on account of the assessee's bona fide misunderstanding of the provisions of rule 23A, it is difficult to see how it could still have reached the conclusion that the penalty was leviable at all. If the assessee succeeded in establishing reasonable cause for the purpose of reduction of the penalty on the above ground, it is difficult to appreciate how the same ground would not have its play in determining the liability in respect of penalty, for the penalty is leviable only if the default in payment of tax is without reasonable cause. Sauce for the goose is sauce for the gander. The same set of circumstances, since they are held proved, must inevitably lead to the conclusion that the liability for penalty was not attracted at all, for the assessee entertained the erroneous but bona fide belief that the permission granted under the Bombay Act still remained operative, and that therefore, it was not liable to submit the return for the period from 1st April, 1970, to Asho Vad Amas 2026 before 30th November, 1970, and to pay the first instalment of tax on or ....