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TMI Blog1973 (3) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, it appears, applied for and obtained registration certificate under the Central Sales Tax Act of 1956 both from the Sales Tax Officer, Ghaziabad, as well as, Lucknow. In the application for the registration certificate made to the Sales Tax Officer, Ghaziabad, the assessee mentioned 47 classes of goods to be included in the certificate. The Sales Tax Officer, however, disallowed certain items and issued a registration certificate for the other classes of goods. The assessee appears to have obtained 75 'C' forms from the Sales Tax Officer, Ghaziabad, for purchase of goods. Out of these, 10 forms were surrendered as unused. Of the balance four were used during the year 1958-59 and the rest 61 forms during the year 1959-60. Goods worth Rs. 3,88,600.89 were purchased against these 'C' forms. During the course of assessment proceedings, the Sales Tax Officer appears to have discovered that the assessee had misused the 'C' forms by purchasing class of goods which were not mentioned in the registration certificate. It was found that during the year 1958-59 the assessee had purchased goods worth Rs. 11,754.62 and during the year 1959-60 goods worth Rs. 2,68,245.38 relating to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 750 for the year 1958-59 and Rs. 17,000 for the year 1959-60. Aggrieved, the assessee went up in revision. The revision relating to the year 1958-59 was dismissed while the revision relating to the year 1959-60 was partly allowed, the amount of penalty being reduced by Rs. 2,000; in other respect the findings were upheld. Aggrieved by this order dated 15th March, 1967, the assessee applied for a reference to this court under section 11 (1) of the U.P. Sales Tax Act, 1948, read with section 9(3) of the Central Sales Tax Act. The Additional judge (Revisions), Sales Tax, has referred for the opinion of this court the following three questions of law: "(1) Whether on the facts and circumstances of the case, the Sales Tax Officer, Ghaziabad, being not seized of the matter at the time of making the penalty order, the jurisdiction having been transferred to Lucknow Circle, was right and just in law in initiating the penalty proceedings and imposing the fine. (2) Whether on the facts and circumstances of the case, the Additional Revising Authority, Sales Tax, Meerut Range, was justified in holding that the applicants made the representations with a guilty mind fraudulently and fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich may extend to fifty rupees for every day during which the offence continues." Under section 10-A, the authority who granted to the assessee registration certificate or is competent to grant it, has been empowered to impose penalty. The Central Sales Tax (Registration and Turnover) Rules, 1957, relate to the matter of the grant of registration certificate. Under rule 3 of these Rules, an application for registration under section 7 has to be made by the dealer to the notified authority. Under rule 5, the notified authority grants the requisite certificate in form 'B'. Rule 2(c) defines a "notified authority" to mean "the authority specified under sub-section (1) of section 7". Sub-section (1) of section 7 requires every dealer liable to pay tax under the Central Sales Tax Act to make an application for registration under that Act, to such an authority in the appropriate State as the Central Government may by general or special order specify. The Central Government on 22nd February, 1957, issued a notification S.R.O. No. 643 under section 7(1). It specified the persons mentioned in column 3 of the schedule as the authority to whom a dealer, described in the corresponding entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the certificate, seems to refer to the offences under clauses (b) and (d) of section 10; whereas for offences under clause (c) of section 10, it empowers the authority competent to grant to him the certificate of registration. It is thus clear that in the case of a particular assessee, only one authority has been empowered to take action. In the present case, the Sales Tax Officer, Ghaziabad, had initially granted the registration certificate to the assessee; but that was cancelled with effect from 28th March, 1960. With effect from that date, the Sales Tax Officer, Lucknow, was the authority who had granted to the assessee the requisite registration certificate. Section 10-A when it empowers the authority who granted the assessee the registration certificate clearly intends that one such authority would be competent to take action. The question, as to who is the authority competent to take action, will have to be determined on the basis as to who was, at the point of time of commencement of proceeding, competent to take action. In the present case, the notice for taking penalty proceedings was issued on 23rd January, 1961. It will have to be seen as to who was the authority who g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal place of business with effect from 28th March, 1960, was at Lucknow. So with effect from that date, the Sales Tax Officer, Lucknow, would be the assessing authority under the U.P. Sales Tax Act. That being so, in view of section 9(3), the Sales Tax Officer, Lucknow, would be entitled to assess, collect and enforce payment of any tax or penalty under the Central Sales Tax Act. This also confirms the conclusion that the relevant provisions of the Central Sales Tax Act read with the Rules would show that in the present case the Sales Tax Officer, Lucknow, had jurisdiction. The Sales Tax Officer, Ghaziabad, was not competent to initiate proceedings or impose penalty on the assessee. Our answer to the first question is in the negative. In view of our answer to question No. (1), questions Nos. (2) and (3) do not arise and need not be answered. The assessee would be entitled to his costs which we assess at Rs. 100 for both the cases. The counsel's fee is assessed at the same figure. The State appealed to the Supreme Court. N.D. Karkhanis, Senior Advocate (O.P. Rana, Advocate, with him), for the appellant. D.P. Singh, Senior Advocate (S.C. Agrawal, V.J. Francis and R.P. Singh, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter, the assessee took up the matter in revision. The revisional authority dismissed the assessee's appeal in respect of the assessment year 1958-59, but reduced the penalty from Rs. 17,000 to Rs. 15,000 in respect of the assessment year 1959-60. Thereafter, at the instance of the assessee, the revisional authority submitted the following questions to the High Court under section 11(1) of the U.P. Sales Tax Act: "(1) Whether on the facts and circumstances of the case, the Sales Tax Officer, Ghaziabad, being not seized of the matter at the time of making the penalty order, the jurisdiction having been transferred to Lucknow Circle, was right and just in law in initiating the penalty proceedings and imposing the fine. (2) Whether on the facts and circumstances of the case, the Additional Revising Authority, Sales Tax, Meerut Range, was justified in holding that the applicants made the representations with a guilty mind fraudulently and falsely, with the full knowledge that the objected goods purchased were not covered by the registration certificate. (3) If the answer to question No. (2) is in the negative, whether the imposition of penalty under section 10(b) of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act or before the High Court. On the basis of the material on record it is not possible to come to a firm conclusion that the same assessee had been registered at two places. Further, there is no material before us to show that during the relevant assessment years the assessee's head office was at Lucknow. These are essentially questions of fact. We cannot go into those questions at this stage. Hence, we do not propose to go into the contention that the assessee's registration at Ghaziabad was invalid. We have to proceed on the basis that the assessee was properly registered as a dealer at Ghaziabad. If that was not so, the assessee would not have applied to the Sales Tax Officer, Ghaziabad, for registration; nor would it have submitted its sales tax returns to that officer. As mentioned earlier, the sales tax assessments for the years 1958-59 and 1959-60 were not challenged as being unauthorised. This takes us to the question whether under section 10-A of the Act, the Sales Tax Officer, Ghaziabad, had competence to levy penalty on the assessee. We shall first read section 10 of the Act to the extent it is material for our present purpose. That section says: "10. If any person- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... still had the competence to levy penalty on the assessee in view of the fact that it was he who had granted the certificate of registration to the assessee. In this case, we are dealing with the penalty relating to offences committed during the assessment years 1958-59 and 1959-60. In fact the levy of penalty is one form of levying tax. If the Sales Tax Officer was competent to levy sales tax on the assessee in respect of those assessment years, he was equally competent to levy penalty on the assessee in respect of the offences committed during those years. In our opinion, the High Court did not properly appreciate the legal position in this case. The High Court was wrong in thinking that the proceedings initiated on January 8, 1960, stood terminated as a result of the subsequent notices issued by the Sales Tax Officer. The notices issued by him are not statutory notices. Under section 10-A of the Act, the Sales Tax Officer was only required to give reasonable opportunity to the assessee to show cause why penalty should not be imposed on him. In the result, we allow these appeals, set aside the order of the High Court and remand the case to the High Court for answering the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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