TaxTMI 
TaxTMI 
2006 (4) TMI 487
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....oner and found that the petitioner paid Rs. 3,841.45 in excess of the payable sales tax. Demand notice in form VII along with copy of the aforesaid assessment order was sent and served on the petitioner. About three years after such assessment order the petitioner received Memo. No. 139 dated January 22, 1998 from the Assistant Commissioner of Commercial Taxes, Siliguri Charge (in short, "Asstt. Commissioner") asking the petitioner to appear before him on February 16, 1998 with relevant payers and documents in connection with a purported revision case being RC No. SG/895 and SMR-0.1/97-98. It was recited in the said notice that on scrutiny of records some discrepancies were detected in respect of concealment of sales and consequent evasion of tax together with interest. The said memo did not mention or specify the provision under which such notice of purported revision case was issued. The petitioner submitted a written objection on March 16, 1998. By order dated September 15, 2000 the Asstt. Commissioner recorded at one place that "it is hereby ordered that the assessment order stands reopened with a direction to the concerned CTO" and thereafter directed the CTO to take act....
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.... We have carefully read and analysed the provisions of section 20A of the 1941 Act and do not find anything therein wherefrom it can be contended that a proceeding under that section could be initiated only during pendency of an assessment proceeding. Section 20A of the 1941 Act and the relevant rule being rule 55C of the 1941 Rules are quoted below: "20A. Penalty for concealment of sales, furnishing of incorrect particulars, etc.-(1) If the Commissioner in the course of any proceedings under this Act, is satisfied that any dealer- (a) has concealed any sales or any particulars thereof, or (b) has furnished incorrect statement of his turnover or incorrect particulars of his sales in the returns submitted under sub-section (2) of section 10 or otherwise, with intent to reduce the amount of the tax payable by him under this Act, the Commissioner may, after giving such dealer a reasonable opportunity of being heard, by an order in writing direct that he shall, in addition to any tax or penalty already levied and payable by him under this Act, pay by way of penalty a sum not less than one and a half times but not exceeding thrice the amount of the tax, if any, which woul....
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....e authority referred to in sub-rule (1) shall determine the amount of penalty payable by such dealer and serve a notice in form VIIF upon such dealer specifying the date, not less than fifteen days after the date of service of such notice, by which the payment shall be made." Section 20A of the 1941 Act postulated that the Commissioner was to be satisfied in course of any proceeding under the said Act that the dealer had concealed sales or particulars thereof or had furnished incorrect statement of his turnover or incorrect particulars of his sales in the return submitted under sub-section (2) of section 10 or otherwise with intent to reduce the tax payable by him under the said Act. Once such satisfaction was reached in course of any proceeding, a penalty proceeding could be initiated as an independent separate proceeding at any time thereafter but not beyond the prescribed time, if any. Penalty proceeding under section 20A could also be heard simultaneously with the assessment proceeding in which jurisdictional foundation was recorded, but that does not imply that it could not be initiated after completion of such assessment proceeding. Rule 55C of the 1941 Rules bears out tha....
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....d about the matters referred to in clauses (a) to (c) of sub-section (1) of section 271 during the course of proceedings under the Act even though notice to the person proceeded against in pursuance of that satisfaction is issued subsequently." In Bharat Traders [1977] 39 STC 206 (Cal) the High Court concluded ". . . From the observations of the Supreme Court made in the subsequent decision, referred to above, it follows that a penalty proceeding can be started both before and after the completion of the assessment proceedings but the satisfaction of the Income-tax Officer or the Appellate Assistant Commissioner must be made during the course of such a proceeding . . .". The Calcutta High Court, in fact, overruled the submission that a notice for penalty proceeding under section 20A of the 1941 Act could not be issued after completion of the assessment proceeding. However, the High court quashed the notice in the said case on the view that steps under section 14(1) of the 1941 Act were prelude to an assessment proceeding and was not a proceeding itself and as such the satisfaction recorded at the stage of section 14 could not be said to be a satisfaction reached in course of ....