TMI Blog1984 (12) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... ealer, the resale quantum was shown at Rs. 2,93,268. After the commencement of the assessment proceedings, but before the passing of the order of assessment by the Sales Tax Officer, the applicant-assessee paid an amount of Rs. 5,934.25 towards sales tax for the aforesaid period. The payment of this amount was made on 4th July, 1973. As per the order of assessment which was passed on 17th July, 1973 taxes due were determined at Rs. 6,034 and after giving credit for the aforesaid amount of Rs. 5,934.25 paid on 4th July, 1973 the balance tax due was determined at Rs. 99.77 (this is admitted by both counsel as the correct figure, although there is a slight error in this connection in the statement of facts). The Sales Tax Officer issued a notice dated 10th August, 1973 under section 36(2)(c) of the Act calling upon the dealer to show cause why a penalty under the explanation to the said section should not be imposed and after hearing the dealer, the Sales Tax Officer imposed a penalty of Rs. 2,604 under the explanation to section 36(2)(c) of the Act by his order dated 16th September, 1974. The appeal preferred by the dealer to the Assistant Commissioner against the order imposing pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appears to the Commissioner that such dealer (a) ............................ (b) ............................ (c) has concealed the particulars of any transaction or knowingly furnished inaccurate particulars of any transaction liable to tax, the Commissioner may, after giving the dealer an opportunity of being heard by order in writing, impose upon the dealer by way of penalty, in addition to any tax assessed or reassessed or found due in the appeal or revision proceeding, as the case may be, a sum not exceeding one and one-half times the amount of the tax. Explanation.-(1) Where a dealer furnishing returns has been assessed by the Commissioner under sub-section (3) or (4) of section 33....................and the total amount of tax paid by the dealer for any year is found to be less than eighty per cent of the amount of tax as so assessed or reassessed or found due in appeal or revision, then, for the purpose of clause (c), he shall be deemed to have concealed the turnover, or knowingly furnished inaccurate turnover liable to tax, unless he proves to the satisfaction of the Commissioner that the payment of a lesser amount of tax was not due to gross or wilful neglect on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be borne in mind. The first is that we are dealing with a taxing statute. The second is that section 36 does not deal with the assessment of tax, but with the levy of penalty. Explanation (1) with which we are primarily concerned does not by itself directly deal with the levy of penalty, but merely raises a presumption in certain circumstances. The expression in the said explanation which we have to consider is "the total amount of tax paid". On a plain and grammatical reading of the said phrase in the context in which it is used, it would mean the total amount of tax paid up to a certain point of time. The only point of time to which reference has been made in the said explanation (1) is the point of time when tax is assessed or reassessed or found due in appeal or revision. The phrase must then mean the total amount of tax paid till that time. Thus, in the present case, that phrase would mean the total amount of tax paid by the dealer up to the time when the order for assessment was made. It is true, as suggested by Mr. Jetly that in some cases, a dealer, in the course of assessment proceedings, might realise that he was likely to be assessed in a particular amount and make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1)(a)(i). If we find that language to be ambiguous or capable of more meanings than one, then we have to adopt that interpretation which favours the assessee, more particularly so because the provision relates to imposition of penalty." 7. Mr. Jetly fairly stated that he had no quarrel with the well-accepted principles reproduced by the Supreme Court in the case of Commissioner of Incometax, West Bengal v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC). According to him, however, the interpretation put by him upon the phrase "total amount of tax paid" was the only reasonable interpretation which could be given to that phrase in the said explanation. We are unable to accept this contention. In our view, on a plain reading of the language of the said explanation, the only meaning which can be given to the said phrase is "the total amount of tax paid till the date of assessment or reassessment or order in appeal or revision, as the case may be". To interpret the said phrase as suggested by Mr. Jetly, would be to read after the word "paid" in the said phrase the words "within the time permitted by the Bombay Sales Tax Act, 1959, and the Bombay Sales Tax Rules, 1959", and it is sure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered dealer to the person from whom he had purchased goods during the period under assessment, but nevertheless the fact remains, the expression "tax paid" has been interpreted by the Division Bench so as to include therein the amount of set-off granted to the dealer. This might suggest that the phrase "the total amount of tax paid" cannot be restricted to the amount of tax paid to the Government treasury within the prescribed time, although the question before the Division Bench was different from the question with which we are concerned. We may clarify that as the question in that case was different, we have not relied on this decision in coming to our conclusion in this case. In the aforesaid judgment, the Division Bench has pointed out what the explanation does is to raise a presumption against the dealer and throws upon him the burden of satisfying the assessing authority that the payment of lesser amount of tax by him was not due to gross or wilful neglect on his part. 9.. We may next refer to a decision of a Division Bench of the Gujarat High Court in State of Gujarat v. Sakurbhai Abedbhai [1975] 35 STC 57. The provision which came up for interpretation in that case was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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