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TMI Blog1976 (2) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents failed. The respondents then went by way of further revision before the Sales Tax Tribunal but there also their application met with the same fate and was dismissed. All this was prior to 7th August, 1959. By 7th August, 1959, the respondents had deposited the full amount of tax of Rs. 7,923.28 in instalments as directed by the Collector of Bombay in recovery proceedings. After the papers went back to the lower authorities on 11th September, 1965, the Sales Tax Officer issued a demand notice in form XVII directing the respondents to pay the penalty set out therein under section 16(4) of the said Act for late payment of tax. The respondents preferred an appeal against this order of the Sales Tax Officer to the Assistant Commissioner of Sales Tax, who dismissed the same. The respondents then went in revision before the Deputy Commissioner of Sales Tax, who reduced the penalty but declined to set aside the same. The respondents then went by way of further revision before the Tribunal. The Tribunal came to the conclusion that on a proper construction of the provisions of section 16(4) of the said Act and, in particular, the proviso thereto once the respondents had filed an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able unless there is anything repugnant in the subject or context. Subsection (4) of section 16 of the said Act reads thus: "(4) If the tax is not paid by any dealer within the prescribed time, the dealer shall pay, by way of penalty in addition to the amount of tax, a sum equal to- (i) one per cent of the amount of tax for each month for the first three months after the expiry of the prescribed time, and (ii) two and one-half per cent for each month subsequent to the first three months as aforesaid, during which he continues to make default in the payment of the tax: Provided that where the tax has not been paid by any dealer within the prescribed time but the dealer has filed an appeal or an application for revision in respect of such tax, the authority hearing the appeal or the application for revision may direct that the penalty in respect of any period shall be paid at such rate as it may think fit, the rate being not less than one per cent and not more than two and one-half per cent of the amount of tax for each month: Provided further that the Collector may, subject to such conditions as may be prescribed, remit the whole or part of the amount of the penalty payable by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the ambit of the term "tax" in so far as a penalty levied under the provisions of section 16(4) is concerned. Some support for this view, which we are inclined to take, is found from the decision of the Supreme Court in Khemka & Co. v. State of Maharashtra[1975] 35 S.T.C. 571 at 581 (S.C.). There the question was whether the assessees under the Central Sales Tax Act, 1956, could be made liable to pay a penalty under the provisions of the said Act, viz., the Bombay Sales Tax Act, 1953. It has been held by the majority decision of the Supreme Court that there is no provision in the Central Sales Tax Act, 1956, for the imposition of a penalty for delay or default in payment of tax and the provision in the State Sales Tax Act imposing penalty for non-payment of tax within the prescribed time is not attracted to impose penalty on dealers under the Central Act in respect of tax payable under the Central Act. In connection with this question, the Supreme Court has observed as follows: "Penalty is not merely sanction. It is not merely adjunct to assessment. It is not merely consequential to assessment. It is not merely machinery. Penalty is in addition to tax and is a liability under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal[1974] 33 S.T.C. 271., where it has been held that the word "tax" used in section 22(1) of the Punjab General Sales Tax Act, 1948, includes both the tax assessed and the penalty imposed and, therefore, a reference on a question of law arising out of the order of the Sales Tax Tribunal imposing a penalty can be made under that section to the High Court. In our view, this decision is not very helpful in the determination of the question before us, because there was no definition of the term "tax" contained in the Punjab General Sales Tax Act, 1948, with which the Division Bench of that High Court was concerned in that case, whereas in the present case, the term "tax" has been defined in the said Act with which we are concerned. Moreover, in view of the decision of the Supreme Court in Khemka & Co. v. State of Maharashtra[1975] 35 S.T.C. 571 (S.C.)., referred to earlier, the authority of the aforesaid decision of the Division Bench of the Punjab and Haryana High Court has been considerably watered down. Mr. Bhabha next referred us to the decision of a Division Bench of the Gujarat High Court in Viswa & Co. v. State of Gujarat[1966] 17 S.T.C. 581 at 590-591. In that case, there w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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