TMI Blog1972 (3) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... the 30th of November, 1968. A copy of the assessment order has been made annexure 1 to the application. 2.. It appears that the petitioners filed monthly returns showing Rs. 1,00,75,507.99 as gross turnover. Respondent No. 1 on examination of the books of account of petitioner No. 1 accepted that gross turnover and proceeded to determine the tax on the basis of that turnover. Petitioner No. 1 had claimed sales of Rs. 23,89,000 and odd outside the State of Bihar through arhat and had produced sale notes from the commission agents residing outside the State of Bihar. The claim of petitioner No. 1 was allowed. Petitioner No. 1 had further claimed a deduction on account of sales inside the State of Bihar for Rs. 3,00,000 and odd. That claim was also allowed by respondent No. 1. Deducting the two amounts aforesaid, the balance taxable turnover under the Central Act was determined at Rs. 73,53,649.16. It appears that petitioner No. 1 had shown total sales in the course of inter-State trade and commerce to the registered dealers and Government departments of the various States but it had filed declarations in forms 'C' and 'D' only for Rs. 53,18,465.41. As the declaration in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed. Sub-sections (1) and (2) of section 8 read as under: "8. (1) Every dealer, who in the course of inter-State trade or commerce- (a) sells to the Government any goods; or (b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3); shall be liable to pay tax under this Act, which shall be three per cent. of his turnover. (2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within sub-section (1)- (a) in the case of declared goods, shall be calculated at the rate applicable to the sale or purchase of such goods inside the appropriate State; and (b) in the case of goods other than declared goods, shall be calculated at the rate of ten per cent. or at the rate applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher; and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Act) in any State (other than Union territory) on behalf of the Government of India shall be assigned to that State and shall be retained by it. Section 10 of the Central Act is a penal section and it makes the contravention of certain provisions of the Act punishable. Section 10 reads as under: "If any person- (a) furnishes a certificate of declaration, under sub-section (2) of section 6 or sub-section (1) of section 6-A or sub-section (4) of section 8, which he knows, or has reason to believe, to be false; or (aa) fails to get himself registered as required by section 7, or fails to comply with an order under sub-section (3-A) or with the requirements of sub-section (3-C) or sub-section (3-E), of that section; (b) being a registered dealer, falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration; or (c) not being a registered dealer falsely represents when purchasing goods in the course of inter-State trade or commerce that he is a registered dealer; or (d) after purchasing any goods for any of the purposes specified in clause (b) of sub-section (3) of section 8 fails, without reasonable excus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Bihar) Rules, 1957. Rule 8 of the Central Sales Tax (Bihar) Rules, 1957, reads thus: "(1) Every registered dealer shall furnish to the Assistant Commissioner, the Superintendent or the Assistant Superintendent quarterly returns in form I, and also an annual return, in the same form, on the basis of the quarterly returns for the year. Such returns shall be furnished in the manner and by the date prescribed in respect of returns under the Bihar Sales Tax Act, 1959 (Bihar Act XIX of 1959) and the Rules framed thereunder. (2) If, upon information, which has come into his possession, the Assistant Commissioner, the Superintendent or the Assistant Superintendent is satisfied that any dealer, while being liable to pay tax under the Act, is not registered under section 7, he may direct such dealer to furnish a return in form I in respect of such period as may be specified in the direction. (3) The Assistant Commissioner, the Superintendent or the Assistant Superintendent may direct a dealer to furnish with his return in Form I, statements, in duplicate, showing the total sales made by him to each registered dealer of different States separately during the period covered by the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause, unable to furnish any return within the prescribed period or the period fixed under the proviso to sub-section (1), the said authority may extend the period for submission of the return. (4) If a registered dealer fails, without reasonable cause, to furnish any return within the prescribed period, or a dealer on whom a notice has been served under the proviso to sub-section (1), fails likewise to furnish the return within the fixed period, the prescribed authority may direct that the dealer shall pay, by way of penalty for such failure, a sum not exceeding five rupees for every day, after the expiry of the prescribed or fixed period, during which the dealer fails to furnish the required return. Where the period for submission of any return is extended under sub-section (3) and the dealer nevertheless fails, without reasonable cause, to furnish the return within the extended period, he shall be liable to penalty as aforesaid for each day after the expiry of the prescribed or fixed period. (5) Any penalty imposed under sub-section (4) shall be without prejudice to any action which is or may be taken under clause (b) of sub-section (1) of section 38." Sub-sections (1), ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urns shall be filed within one calendar month of the expiry of the period to which they relate and shall be signed and verified in the manner provided in the form, by the appropriate person mentioned in clause (a) of sub-rule (2) of rule 4 or by the manager, if any, declared under section 10." Sub-rule (1) of rule 18 reads thus: "(1) Every dealer, liable to pay tax under the Act, shall make quarterly payment of such tax, if he is a registered dealer or is liable for registration: Provided that the authority prescribed in rule 12 may, for reasons to be recorded in writing, require any dealer to make payment of such tax at such shorter intervals as may be specified by the said authority." 7.. Having reproduced the relevant provisions of the Central Act and the Rules and the relevant provisions of the Bihar Act and the Rules, I proceed to deal with the contentions which were raised by Mr. Asok Kumar Sen. Broadly stated, the contentions which were raised by Mr. Sen are the following-(1) that respondent No. 1 had no jurisdiction to ask petitioner No. 1 to file monthly returns and to make assessment for the broken period, namely, 1st April to 30th November, 1968, instead of for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to submit monthly returns and to make assessment for a broken period. As provided under rule 8(1) of the Central Sales Tax (Bihar) Rules, 1957, every registered dealer is required to furnish to the prescribed authority quarterly returns in form I and also an annual return in the same form on the basis of the quarterly returns for the year. Such returns are required to be filed in the manner and by the date prescribed in respect of returns under the Bihar Act and the Rules framed thereunder. Thus, rule 8 makes specific provision for filing of quarterly returns and annual return in the case of a registered dealer. Sub-rule (2) of rule 8, which empowers the prescribed authority to direct furnishing of return in respect of such period as may be specified in that direction, is not applicable in the case of a registered dealer. It was rightly contended by Mr. Sen that the expression "such return shall be furnished in the manner and by the date prescribed in respect of returns under the Bihar Sales Tax Act of 1959 (Bihar Act XIX of 1959) and the rules framed thereunder" occurring in sub-rule (1) of rule 8 does not make the provisions of the Bihar Act and the Rules framed thereunder relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish returns for the prescribed period within such time or period other than the prescribed period as may be fixed by the said authority. The learned Advocate-General, however, contended that the proviso not only gives power to the prescribed authority to vary the period during which the return is to be filed but also authorises him to vary the period for which the return is to be filed. On a plain meaning of the expression "to furnish such returns within such period as may be fixed by the said authority", the construction put by Mr. Sen appears to be more sound. If the intention of the Legislature was to give power to the sales tax authority to vary the prescribed period of returns, there should have been a clear provision authorising the tax authority to ask a dealer to furnish return for such period as may be fixed by the authority or in any event there should have been the word "and" after "such returns" and before "within such period". I am, therefore, inclined to accept the contention raised by Mr. Sen and to hold that the proviso to section 14(1) of the Bihar Act does not empower the sales tax authorities to vary the prescribed period for which the returns are to be filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction of the provisions of section 9(3) of the Central Act [section 9(3) of the Act as it stood before amendment has been substituted by section 9(2) with retrospective effect] held that under sub-section (3) of section 9, only the local procedure is applied for the assessment, collection and enforcement of penalty which is payable by a dealer under the Central Act. It was further held that the penalty levied under section 12(3) of the Madras General Sales Tax Act, 1959, was not valid as the only provision in the Central Sales Tax Act providing for penalty is section 10 and that does not cover a penalty of the type contemplated by section 12(3) of the Madras Act. 13.. In the case of State of Madras v. M. Angappa Chettiar and Sons[1968] 22 S.T.C. 226., the same view was upheld and it was held that the power to collect penalty under section 9(3) of the Central Sales Tax Act will cover only the penalty payable under that Act and will not include a power to impose the penalty itself, for a contravention or omission for which that Act does not contain a provision apart from the Madras General Sales Tax Act. 14.. In a recent decision of the Calcutta High Court in the case of Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Mysore Sales Tax Act, 1957, in the same way in which a defaulting dealer under the Mysore Act incurred that liability. The Mysore High Court, however, subsequently in Guldas Narasappa Thimmiah Oil Mills v. Commercial Tax Officer, Raichur[1970] 25 S.T.C. 489., took a contrary view holding that the provisions relating to the imposition of penalty in a taxing statute are substantive in character and they cannot reasonably be said to form part of the procedural law and unless such penal provisions in the local Sales Tax Act are expressly adopted by the provisions of section 9(2) of the Central Act, they cannot be relied upon for the purpose of the recovery of tax due under the Central Act. In that case, it was observed that section 9(2) of the Central Act, as amended by the Central Sales Tax (Amendment) Act [28 of 1969], has effected changes so as to exclude any idea of adoption of the substantive provisions of a State Act relating to assessment and recovery of tax and penalty. 18.. Thus, it will appear that the majority of the High Courts have taken the view that the provisions relating to imposition of penalty in the local Sales Tax Act would not apply by the provisions of sectio ..... 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