TMI Blog1976 (12) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied with the books of account produced before it. It came to the conclusion that the sales had been suppressed by the petitioner. It made best judgment assessments under section 11(1) of the Act and raised additional demands against the petitioner for each of the four years. The petitioner preferred appeals to the Assistant Sales Tax Commissioner. His appeals were heard in 1968. In all the appeals the appellate authority reduced the amount of tax by a few thousands of rupees in each of the four cases. The petitioner went in revision to the Sales Tax Commissioner. The revision petitions could not be heard as they were withdrawn by the petitioner. This happened sometime in December, 1968. On 11th February, 1969, a different Sales Tax Officer, Mr. U.R. Jain, issued for each assessment year a penalty notice under section 22A(1) of the Act. He required the petitioner to show cause why penalty be not imposed on him. In answer the petitioner submitted his reply on 17th February, 1969. He denied that there was any case for imposition of penalty on him. His main contention was that the original assessment orders were passed by Mr. R.K. Bhatia and Mr. Madan Mohan, Sales Tax Officers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urate particulars or making false representations.-(1) If the Commissioner or any person appointed under sub-section (1) of section 3 to assist him, in the course of any proceedings under the Act is satisfied that a dealer has concealed the particulars of his sales or has furnished inaccurate particulars of his sales and has thereby returned figures below the real amount, he may, after giving the dealer a reasonable opportunity of being heard, direct that the dealer shall, in addition to the tax payable by him under this Act, pay, by way of penalty, a sum not exceeding one and a half times the amount of tax which would have been avoided if the figures returned by the dealer were accepted as correct." While dealing with section 28 of the Income-tax Act, 1922, the Supreme Court had occasion to deal with penalty provisions which in incometax law are very much similar to section 22A of the Bengal Finance (Sales Tax) Act. In Commissioner of Income-tax v. Angidi Chettiar[1962] 44 I.T.R. 739 (S.C.)., the Supreme Court laid down that the power to impose penalty depends upon the satisfaction of the Income-tax Officer in the course of the proceedings under the Act. Satisfaction before comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has furnished inaccurate particulars and has thereby returned figures below the real amount. The phrase "satisfied" occurs in many taxing statutes and is a familiar one for a great many years: see for example section 271 of the Income-tax Act, 1961, and section 56 of the Delhi Sales Tax Act, 1975. The phrase "is satisfied" means, in my view, simply "makes up its mind": per Lord Pearson in Blyth v. Blyth[1966] 1 All E.R. 524 at 541. Dixon, J., defined it as "actual persuasion". That means a mind not troubled by doubt or to adopt the language of Smith, J., "a mind which has reached a clear conclusion": see Angland v. Payne[1944] N.Z.L.R. 610 at 626. Now the Sales Tax Officer under section 22(1) has to make up his mind. But make up his mind for what? What for does he reach a clear conclusion in his mind? It means, in the context it is used, that the authority has to form a prima facie view that it is a case where, subject to what the dealer may have to say, it should initiate action under section 22A so that the majesty of the law is upheld and the dealer finds it unprofitable to conceal sales. It reaches a clear conclusion that a good ground exists for launching penalty proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the dealer. If the authority has not directed its mind to the question of imposition of penalty how can it be said that it was satisfied that it was a case where action for penalty ought to be taken. Satisfaction for purposes of section 11(1) is one thing. Satisfaction for purposes of section 22A is quite a different thing. Under section 11(1): "If no returns are furnished by a registered dealer in respect of any period by the prescribed date, or if the Commissioner is not satisfied that the returns furnished are correct and complete, the Commissioner shall, within eighteen months after the expiry of such period, proceed in such manner as may be prescribed to assess to the best of his judgment the amount of the tax due from the dealer and in making such assessment shall give the dealer a reasonable opportunity of being heard..............." Here for the purposes of best judgment assessment the Commissioner has to be satisfied that the returns furnished are not "correct and complete". Concealment of sales and furnishing of inaccurate particulars are the ingredients of section 22A. The result of these ingredients must be that the dealer has returned figures below the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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