9911796707
TMI Blog1970 (10) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... o years from the receipt of notice and more than two and a half years after the close of the year. These quarterly returns were to be filed on or before 31st July, 1960, 31st October, 1960, 31st January, 1961, and 30th April, 1961. After the filing of the returns, the Assessing Authority passed an order of assessment on 25th October, 1963, creating tax liability of Rs. 1,32,340.06 on account of sales tax and imposing a penalty of Rs. 10,000 under section 10(6) of the Act for the non-filing of the returns and for non-payment of the tax at the proper time. Against that order, the petitioner-firm filed a revision application before the Excise and Taxation Commissioner under section 21 of the Act on 12th December, 1963, and before its decision, the District Excise and Taxation Officer, Amritsar, moved the Excise and Taxation Commissioner, by letter dated 6th July, 1964, for the enhancement of the penalty. The Excise and Taxation Commissioner then issued a notice to the petitioner-firm on 19th August, 1964, informing it that he had decided to satisfy himself as to the legality and propriety of the proceedings for the year 1960-61 and the order of the Assessing Authority dated 25th Octob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, 1964, for the enhancement of the penalty. The Excise and Taxation Commissioner then issued a notice to the petitioner-firm on 19th August, 1964, informing it that he had decided to satisfy himself as to the legality and propriety of the proceedings for the year 1961-62 and the order of the Assessing Authority dated 11th November, 1963, in respect thereof and calling upon the petitioner-firm to show cause against such a course. In reply to that notice, the petitioner-firm submitted a reply on 29th September, 1964, saying that the notice issued by the Excise and Taxation Commissioner was as a result of the findings of the Das Commission Report and by way of political vendetta against the petitioner-firm which was owned by Shri Surinder Singh Kairon, son of Shri Partap Singh Kairon. The learned Commissioner, after hearing the parties, passed an order on 2nd October, 1964, enhancing the penalty from Rs. 5,000 to Rs.1,14,055.40, that is equal to 100 per cent. of the sales tax levied. The petitioner-firm then filed a revision petition before the Financial Commissioner which was dismissed on 17th June, 1965. An application under section 22(1) of the Act for making a reference to this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Morarka v. Commissioner of Income-tax, Central, Bombay[1962] 44 I.T.R. 529 (S.C.)., wherein it was held that"in the matter of assessment of income-tax each year's assessment is complete, and the decision arrived at in a previous year on the material then before the taxing officer cannot be regarded as binding in the assessment for subsequent years." There is no quarrel with this proposition but it has no application in the case of imposition of penalty, as I will explain later. The last judgment relied upon by the learned counsel is by their Lordships of the Supreme Court in M/s. Hindustan Steel Ltd. v. State of Orissa[1970] 25 S.T.C. 211 (S.C.); (1969) 2 S.C.C. 627., wherein it was held that"the liability to pay penalty does 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 proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his having not filed the quarterly returns for the year 1961-62. It was argued by him that in the face of these facts it did not lie with the petitioner to contend now that he had not been given a reasonable opportunity of being heard as envisaged under the provisions of section 10(6). I find that the arguments put forth by the Taxation Inspector are both factually correct and technically sound. I have carefully considered the arguments advanced by the petitioner as well as the representative of the department with reference to the circumstances and facts of this case as revealed from the record. The petitioner had nothing to say against the factual correctness of the arguments of the Taxation Inspector mentioned before. In fact, the assessment file of the petitioner fully bears out the correctness of all these facts. The quarterly returns along with the quarterly deposits of tax should have been made by the petitioner. These were not filed nor were the deposits of tax due made by these prescribed dates. The law, as has already been discussed in the foregoing paragraph, had imposed an obligation on the petitioner to file the quarterly returns by the prescribed dates after making th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erly returns for two quarters of the year 1959-60 were filed by the petitioner-firm. The quantum of penalty to be imposed is within the discretion of the appropriate authority and no reference can be called by this court in order to determine whether the amount of penalty imposed is excessive or not. The Legislature permitted the imposition of a penalty up to a maximum of one and a half times the sales tax due and in these cases the Excise and Taxation Commissioner imposed the penalty equal to the sales tax which was less than the maximum provided by the statute. I am further of the opinion that the conduct of the petitioner-firm for the previous and subsequent years could be taken into account by the Excise and Taxation Commissioner in order to determine whether the default on the part of the petitioner-firm was deliberate and contumacious showing complete disregard of the statutory obligations in order to determine the quantum of penalty to be imposed. If the appropriate authority has to confine itself to the assessment of a particular year only, then there was no point in leaving it to the said authority for the quantum of penalty to be imposed in the circumstances of each case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not arise. If it is found that there was legal evidence before the Tribunal, even if some of it was irrelevant, a superior court would not interfere if the finding can be sustained on the rest of the evidence."
In the light of these observations, it is evident that there was enough material on the record before the Excise and Taxation Commissioner to come to the conclusion that the omission to file the returns within time and to pay the sales tax in accordance therewith was deliberate and showed utter disregard of statutory obligations and on that finding it was open to the Excise and Taxation Commissioner to impose such penalty as he considered fit. The petitioner-firm availed of the further remedy of revision to the Financial Commissioner who also considered the penalty imposed by the Excise and Taxation Commissioner not to be excessive. That is a question of fact and, therefore, no question of law can be said to arise out of the orders of the Financial Commissioner dismissing the revision petitions. We are, accordingly, of the opinion that there is no merit in these petitions which are dismissed but without any order as to costs.
Petitions dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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