TMI Blog1986 (2) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... edings were again dropped in respect of this show cause notice. 2.. Ultimately the Assistant Commissioner, Sales Tax, issued a notice dated 20th December, 1973 under section 57 of the Bombay Sales Tax Act, 1959 to revise the order of the Sales Tax Officer dated 18th April, 1973. In these proceedings by his order dated 15th April, 1974, the Assistant Commissioner levied a penalty of Rs. 450 on the applicants. The applicants preferred an appeal from this order. In appeal, the order of the Assistant Commissioner was confirmed by the Deputy Commissioner on 11th August, 1976. The applicants preferred a revision application against the order of the Deputy Commissioner to the Sales Tax Tribunal. The Tribunal referred the question relating to interpretation of the relevant provisions of section 36(2)(c) arising in this case to a Special Bench. The Special Bench held that under Explanation (1) of section 36(2)(c) of the said Act penalty can be levied for a part of the year also. On this finding, the Tribunal dismissed the revision application preferred by the applicants. 3.. From the decision of the Tribunal dated 4th December, 1978, the following question has been referred to us unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation in the present case. 4.. The Explanation has been interpreted by the department to cover cases where the assessment pertains to a part of the year. Penalty is levied on the basis of the tax paid being less than 80 per cent of the tax assessed for an assessment period which is a part of the year. It is the contention of the respondents that the phrase "the total amount of tax paid by the dealer for any year" would include the total amount of tax paid by the dealer for any part of the year. 5.. To examine the validity of this contention it is necessary to refer to some of the provisions of the Bombay Sales Tax Act, 1959. 6.. Section 2, sub-section (37) defines "year" as follows: "2(37). 'year' (a) means the financial year; (b) in relation to any particular registered dealer for the purpose of this Act (except section 3 and Chapter IV thereof) means the year by reference to which the accounts of that dealer are ordinarily maintained in his books, but the dealer may by written declaration made by him in this behalf opt for the financial year:" 7.. Under section 3 of the Bombay Sales Tax Act, 1959, every dealer whose turnover of all sales or of all purchases mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 33 there is a power to assess the tax due from a dealer during a part of the year. Section 35 which deals with reassessment expressly refers to the turnover in respect of "that year or part thereof" which has escaped assessment. The Act, therefore, when it uses the term "year" refers to the financial year or the year by reference to which the accounts of a given dealer are ordinarily maintained in his books as specified in section 2, sub-section 37. Where a section covers a part of a year also, an express provision is made to that effect, as for example, in sections dealing with assessment or reassessment. 10.. The explanation to section 36(2)(c) refers to the total tax paid during the year. The plain language of the explanation, therefore, does not cover a part of the year. Under the explanation in cases where the total amount of tax paid by the dealer for any year is found to be less than 80 per cent of the amount of the tax so assessed, he is deemed to have concealed the turnover or knowingly furnished inaccurate particulars of turnover. This attracts penal provisions of section 36. 11.. It was submitted by Mr. Thakore, learned counsel for the respondents, that the Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the year will have to be taken into account before invoking the deeming provisions of the Explanation. 15.. The first part of the Explanation refers to a dealer furnishing returns who has been assessed or reassessed under the various sections set out in the Explanation. This part does not prescribe that the assessment or reassessment should be for the entire year. There is, therefore, no requirement of a yearly assessment or reassessment. The second part of the Explanation sets out that the total amount of tax paid by the dealer for any year should not be less than 80 per cent of the amount of tax so assessed or reassessed. In other words before the penalty is levied the department has to consider the tax paid by the dealer for the entire "year" as defined in section 2(37) as also the tax assessed or reassessed for period or periods covering the entire "year". In other words even if the assessment or reassessment is for a part of the year, penalty can be levied only after the tax paid and the tax assessed or reassessed for the entire year are ascertained. Penalty proceedings may be initiated at the stage of assessment or reassessment. The Explanation does not prevent initia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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