TMI Blog1981 (12) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... n 4 thereof. The said schedule, which has a bearing on the decision of this case, is reproduced hereunder: SCHEDULE Period of return Last date of Amount to be paid Last date for submission of payment towards returns tax 1 2 3 4 1st April, to 30th November. (a) Rs. 451.00 or 31st August. Asho Vad Amas. the tax due according to the dealer's account from 1st April, to Asho Vad 30. (b) Tax due accord30th November. ing to the dealer's account for the period from 1st April, to Ashvin Vad 30, less the tax already paid under item (a).Kartak Sud 1 to 30th April. (c) Rs. 451.00 or the 28th or 29th 31st March. tax due according February. to the dealer's accounts for the period from Kartak Sud 1 to Posh Vad Amas. (d) Tax due according to the dealer's account for the period from Kartak Sud 1 to 31st March, less the tax already paid under item (c). The Bombay Act was in force up to 5th May, 1970. On and with effect from 6th May, 1970, the Gujarat Sales Tax Act, 1969 (hereinafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs for imposition of penalty under section 9(1) of the Central Act read with section 36(3) of the Bombay Act were initiated against the assessee by the Sales Tax Officer. In the course of penalty proceedings, the case of the assessee, inter alia, was that it was under a bona fide impression that the permission granted on 4th January, 1967, under the Bombay Act was still operative because it was not informed about the enactment of rule 23A and its consequences by the service of a notice. The Sales Tax Officer rejected the contentions advanced on behalf of the assessee, including the one mentioned above, and he imposed upon the assessee a penalty in the sum of Rs. 2,695.26. The assessee preferred an appeal before the Assistant Commissioner of Sales Tax. The appeal was dismissed. The assessee carried the matter in second appeal before the Gujarat Sales Tax Tribunal (hereinafter referred to as "the Tribunal"). The Tribunal found that having regard to the enactment of rule 23A, which superseded the permission granted on 4th January, 1967, under the Bombay Act, the return for the period 1st April, 1970, to 5th May, 1970, was required to be furnished and the tax due according to such retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances of the case, the Tribunal was right in law in holding that the permission granted to the applicant by the sales tax authorities to file six monthly returns instead of quarterly returns under section 32(l) of the Bombay Sales Tax Act, 1959, read with rule 22 of the Bombay Sales Tax Rules, 1959, no longer remained valid or operative after the enforcement of rule 23A of the Bombay Sales Tax Rules, 1959, and that, therefore, the applicant was required to file the relevant return and to pay tax payable thereon latest by 30th June, 1970?" In the present case, on the view which we are inclined to take on the second question, it is not necessary for us to answer the first question. We shall proceed to deal with the second question on the assumption that the permission granted to the assessee under the Bombay Act on 4th January, 1967, no longer remained valid or operative after the enactment of rule 23A and that the assessee was required to furnish the return and pay the tax due under the Central Act in respect of the period from 1st April, 1970, to 5th May, 1970, on or before 30th June, 1970. For the purpose of levy of penalty for non-payment of tax under the Central Act withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty under section 271(1)(a) of the Income-tax Act, 1961, which authorises the levy of penalty if the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under the Act, is satisfied that "any person has without reasonable cause failed to furnish the return of total income which he was required to furnish.........". It was there held that failure "without reasonable cause" to furnish the return is an ingredient of the offence under. section 271(1)(a) and that penalty is attracted thereunder when the assessee has either acted deliberately in defiance of law or is guilty of conduct contumacious or dishonest, or acted in conscious disregard of his obligation. The legal burden is on the department to establish by leading some evidence that Prima facie the assessee has, without reasonable cause, failed to furnish the return within the time specified in section 271(1)(a) read with the other relevant sections referred to in that section. Once this initial burden, which may be slight, has been discharged by the department, it is for the assessee to show, as in a civil case, on balance of probabilities, that he had reasonable cause for failing to fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that behalf was required to be tested on probabilities as in a civil case. We find that the Tribunal has nowhere applied its mind to these relevant factors and that it appears to have treated the very factum of default in payment of tax within the time limited as itself sufficient to attract penalty. Indeed, while considering the assessee's submission that it was prevented by "reasonable cause" within the meaning of sub-section (3) of section 36 of the Bombay Act in not filing the return and in not paying the tax payable in accordance with the return within the prescribed time because of its erroneous belief that the permission granted under the Bombay Act to file two periodical returns for the accounting period in question and to pay tax in accordance with the conditions imposed in the permission still continued to operate, the observations which the Tribunal made clearly disclose that it was not at all conscious of the approach which it was required to adopt in a quasi-criminal proceeding such as the one with which it was concerned. The Tribunal, in this connection, observed as follows: "There is no dispute between the parties that the appellant was required to pay an amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty was not attracted at all, for the assessee entertained the erroneous but bona fide belief that the permission granted under the Bombay Act still remained operative, and that therefore, it was not liable to submit the return for the period from 1st April, 1970, to Asho Vad Amas 2026 before 30th November, 1970, and to pay the first instalment of tax on or before 31st August, 1970. The overall impression left on our mind by the decision of the Tribunal therefore, is that though it has failed to apply the correct test and has failed to take into consideration all the relevant aspects, it has ultimately reached the conclusion which operates in favour of the assessee and takes him out of the net of the penalty provision itself. Be it noted in this connection that the finding of the Tribunal on which the reduction of penalty is based is not challenged by the department by seeking a question. The finding has become final and conclusive. On that finding, it is clear that the Tribunal was satisfied that the tax was not paid by the assessee within the time limited on account of its bona fide though wrong belief as regards the continued validity of the permission or on account of it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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