TaxTMI 
TaxTMI 
1983 (7) TMI 279
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....ed to tax amounting to Rs. 13,44,682. The first return was delayed by two months and 7 days, and, therefore penalty of Rs. 4,000 was imposed by the assessing authority under section 17(3) of the State Act read with section 9(2) of the Central Act. 3.. Against the assessment order, an appeal was preferred before the Deputy Commissioner of Sales Tax. The appellate authority maintained the order of assessment and penalty imposed under section 17(3). The Deputy Commissioner in this appeal further came to the conclusion that the total tax levied was Rs. 13,44,682 out of which the Corporation had deposited Rs. 7,71,892 with the returns, and thus Rs. 5,68,790 had not been paid. The returns, therefore, were considered false and the Corporation was noticed to show cause why penalty under section 43 should not be levied. The assessee-Corporation represented that there was no mens rea on their part; that this was the second year of assessment of the appellant and the administrative set-up was not properly organised and that it was only after the accounts were finalised that the Corporation came to know of the short payment. It was also contended that the initiation of penal proceedings aft....
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....essee and dismissed the appeal, and thereafter at the instance of the assessee, the Tribunal, i.e., the Board of Revenue, has made this reference for answering the questions mentioned above. 6.. The learned counsel appearing for the assessee, Food Corporation of India, contended that under section 38(5), the appellate authority had jurisdiction to enhance, annul or to reduce the assessment or the penalty but in the present case where no penalty was imposed by the assessing authority, in exercise of jurisdiction under section 38(5), the appellate authority, i.e., the Deputy Commissioner, could not impose the penalty for the first time. It was, therefore, contended that he had no jurisdiction under section 38(5) to impose the penalty. 7. It was also contended that under section 43, the appellate authority could not impose penalty as penalty is part of the assessment itself and it ought to have been completed within 5 years as provided in section 18(8) and it was, therefore, contended that in this view of the matter also, the answer to question No. (2) could be in favour of the assessee. It was also contended that in the circumstances which resulted in incorrect return su....
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....cised under section 43. The learned counsel referred to a decision of this Court in Commissioner of Sales Tax, M.P., Indore v. Tansukhdas Madanlal, Rajnandgaon (M.C.C. No. 190 of 1980 decided on 26th February, 1983) [1983] 53 STC 349 and contended that the appellate jurisdiction is wide enough to confer power to impose a penalty. 10.. It was also contended that even under section 38(5) where jurisdiction is conferred on the appellate authority to enhance, confirm or reduce the penalty or the assessment, the jurisdiction to enhance also, in substance, amounts to jurisdiction to impose the penalty and it, was, therefore, contended that the penalty imposed could not be said to be bad in law. 11.. Commissioner of Sales Tax, M.P., Indore v. Tansukhdas Madanlal, Rajnandgaon [1983] 53 STC 349 was a case where the question was as to whether the Tribunal was justified in refusing to enhance the penalty under section 38(5) of the M.P. General Sales Tax Act. In that case, a Division Bench of this Court considered the scope of section 38(5) and the scope of jurisdiction under section 38(5)(a) has been considered but the question about enhancement in a case where no penalty at all was imp....
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....onfirm, reduce, enhance or annul the penalty imposed by the assessing authority. It was contended by the learned counsel for the department that the power to enhance impliedly confers powers on the appellate authority to impose penalty for the first time. But it is clear that it is not a case where the assessing authority found the assessee liable to penalty but imposed a nominal penalty or chose not to impose penalty at all. Admittedly, the assessing authority did not consider the case of penalty at all nor did he impose any penalty against the assessee, and therefore, it could not be said that there was some penalty imposed which the appellate authority could enhance subject to the procedure that may be prescribed. If the word "enhance" impliedly meant imposition of penalty itself, the legislature may not have used these precise terms "confirm, reduce, enhance or annul". The use of these terms clearly contemplates some order by the assessing authority in regard to the penalty so that the appellate authority either may confirm it, annul it, enhance it or reduce it and the plain reading of the section, therefore, indicates that the power to enhance does not contemplate the power to....
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....position of penalty under section 43 read with section 9(2) of the Central Act, it was contended on behalf of the assessee that it is not justified because- (1) it is beyond the period of limitation provided in section 18(8); and (2) in the facts and circumstances of the case, there appears to be no justification for imposition of a penalty. So far as the facts and circumstances are concerned, they have been considered by the authorities including the Board of Revenue, and in our opinion, whether any particular facts and circumstances justify or do not justify imposition of penalty is ultimately not a question of law which could be referred to this Court. 15.. As regard clause (8) of section 18 which provides for the limitation for purposes of assessment, it is clear that section 18 provides for assessment of tax and clause (8) provides: "(8) The assessment shall be made under this section- (i) in respect of a registered dealer, within a period of five calendar years from the end of the period for which assessment is to be made; and (ii) in respect of a dealer who has failed to apply for registration, within a period of five calendar years from the commencement....
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....e authority concerned. So far as the case in hand is concerned, it is clear that the appellate authority started proceedings for imposition of penalty by giving a notice as contemplated under section 43 and this was done when the appeal was pending before the appellate authority. It is, therefore, plain that the jurisdiction exercised under section 43 is exercised by the appellate authority during the pendency of the appeal from the order of assessment and while finally passing the order of assessment, as the appellate authority held that it was a fit case falling within the ambit of section 43 that a notice for imposition of penalty was issued and after hearing the assessee, ultimately, passed the final order in appeal and in that order itself penalty was also imposed. 17.. It is, therefore, plain that what has been done by the appellate authority is done under the jurisdiction conferred on the appellate authority while hearing the appeal and while hearing the appeal has modified the order of assessment and imposed the penalty. But before finally deciding the appeal, the appellate authority has issued a notice as contemplated under section 43. Under these circumstances, therefo....
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....unsel for the assessee that a notice as contemplated under section 38(5) was issued to the assessee and it was, therefore, contended on the basis of the form of the notice that the authority purported to act under section 38(5). In fact, in the order passed by the appellate authority it has been clearly stated that the authority was acting under section 43, although it appears that the learned Tribunal took the view that the appellate authority also could impose penalty under section 38(5). But it is clear from the order passed by the Deputy Commissioner exercising appellate jurisdiction that he was exercising jurisdiction under section 43 of the M.P. General Sales Tax Act and merely because there was any error in issuing a notice in the proper form, it could not be said that the appellate authority was exercising jurisdiction under section 38(5). 20.. It was also contended that section 43 contemplates a finding that a dealer has deliberately concealed his turnover or furnished a false return and as there is no such finding given by the Deputy Commissioner exercising appellate jurisdiction, the penalty could not be justified under section 43. Although in the order passed by the ....