9911796707
TMI Blog1976 (7) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,490 which is not in dispute. However the assessing authority also noticed that the appellant was charging a rate of 15 per cent till October, 1974 though the rate of tax on batteries had been reduced to 13 per cent vide G.O. 1838 Revenue, dt. 18th March, 1970, though the rate as per Schedule is 15 per cent vide Entry 3-A of the First Schedule of TNGST Act 1959. The excess collection thus made was Rs. 932.28. The appellant issued a credit note for this amount and the credit note bears the date 31st March, 1975. The appellant had argued before the assessing authority that this was a genuine mistake as it was appellant's first year of business. At any rte, it was pointed out that the amount had since been refunded. The assessing authority ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as tax in view of the Supreme Court decision in Ashoka Marketing Company(26 STC 254) any many other cases. The learned State Representative on the other hand referred us to s. 22 which according to him authorised levy of penalty for contravention of sales tax law by way of excess collection after hearing the appellant. He further pointed out that the AAC has considered that it is not necessary to prove means rea for statutory offences like the one under consideration and cited Halsbury's Law of English in support of his stand. He claimed that once an offence has been committed it cannot be undone by a mere refund of the tax. At any rate, he contended that the reduced penalty takes into consideration he appellants conduct in refunding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the transaction in which he collects such amount, the assessing authority may after giving such person or dealer a reasonable opportunity of being heard, by order in writing impose upon him by way of penalty a sum not exceeding one and a half times such amount:-- Provided that no proceedings under this sub-section shall be commended after a period of five years from the expiry of the year in which the amount has been collected: Provided further that no prosecution for an offence under-sub-s. (1-A) of s. 45 shall be instituted in respect of the same facts on which a penalty has been imposed under this sub section)". Sec. 22(1) make it an offence for an unregistered dealer to collect tax and for a registered dealer to collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Law and penalties in Salsa tax laws of States other than Orissa. The Supreme Court in the case of Hindustan Steel's case observed in 25 STC 211 at 214 as under:-- "Under the Act penalty may be imposed for failure to register as a dealer : s. 9(1) read with s. 25(1)(a) of the Act. But the liability to pay penalty dos not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance or law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. Penalty will not also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed earlier. Where the breach occurs from a bonafide belief that it was being done in accordance with the law, no penalty is exigible. In this case, we have no material for holding that the appellant did not have such a bonafide belief as contend by it. Tax collected was paid along with monthly return. Credit voucher for the full excess collection of Rs. 932.28, was placed later. Even assuming that the credit voucher was ante-dated to 31st March, 1975 has suspected by the AO, the ultimate refund itself by way of adjustment in account has not been questioned. The facts that the appellant paid the excess tax on collection to the Government along with the monthly returns and retrned the excess tax completely, though after the default was brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the provision authorising levy of penalty for excess collection of tax is ultra vires in view of the rational of decision of the Supreme Court in 26 STC 254 and various other cases. Actually we find that this impugned provision by itself has not been the subject matter of any decision so far. At any rate, the question of vires could not be considered by us at our state in view of the decision of the Supreme Court in the case of K.S. Benkataraman & Co. vs. State of Madras (17 STC 418). But as mentioned earlier, the appellant is entitled to succeed on merits themselves even on the basis that law is quite valid.
5. In the result the appeal is allowed and the penalty of Rs. 484 as sustained by the AAC is set aside. X X X X Extracts X X X X X X X X Extracts X X X X
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