TMI Blog1997 (2) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... onthly returns for April, 1986 to November, 1986 in respect of Central sales tax assessment for the year 1986-87 were also filed only on January 19, 1987 and the tax due as per those returns was remitted only on March 19, 1987. According to the petitioner, he has paid penal interest under section 23(3) of the Act in respect of the defaulted amounts. 2.. It is the case of the petitioner that the first respondent-assessing authority-had issued notice to him under section 45A of the K.G.S.T. Act proposing to levy penalty for the delay in filing the returns and payment of tax under the provisions of the K.G.S.T. Act for the assessment years 1985-86 and 1986-87 and also under the provisions of the C.S.T. Act for the assessment year 1986-87. According to the petitioner, though he had brought to the notice of the assessing authority the circumstances in which he was disabled from filing the returns accompanied by the receipt for payment of the tax in time, the assessing authority without considering the said explanation issued three separate orders all dated April 4, 1987 imposing penalty of Rs. 40,000 and Rs. 20,000 for the assessment years 1985-86 and 1986-87 respectively under the K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessing authority has initiated proceedings under section 45A of the Act, that the petitioner has not even paid the collected tax, that the non-payment of the tax in time was a wilful action on the part of the petitioner and that the assessing authority was perfectly justified in invoking the penal provision of section 45A of the Act. It is averred that the petitioner was fully aware of the obligations under section 17 of the Act read with rule 21(7) of the Rules and that the petitioner has thus violated the statutory provisions and delayed the payment of tax legitimately due to the Government. Regarding the quantum of penalty also it is stated that the first revisional authority has granted substantial relief. 4.. The learned counsel appearing for the petitioner submitted that in the instant case the petitioner could not file the monthly returns as well as the annual returns for the assessment years 1985-86 and 1986-87 under the K.G.S.T. Act as well as for the period from April, 1986 to November, 1986 in respect of the assessment year 1986-87 under the C.S.T. Act for the reasons that petitioner s sales were mostly credit sales, that during the aforesaid two years several cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied by the Deputy Commissioner, did not keep in mind the principles laid down by the Supreme Court and by this Court in the abovementioned cases. The learned counsel submitted that there is no justification for the imposition of penalty and that at any rate, the maximum penalty that can be imposed in this case is only Rs. 5,000 for each year. 5.. I have also heard the Special Government Pleader for Taxes. He submitted that the petitioner was statutorily bound to file monthly returns in respect of the turnover as contemplated under section 17 of the Act read with rule 21(7) of the Rules and also to pay the tax due as per the said returns on or before the 20th of the succeeding month and that in the instant case, the petitioner has not remitted even the tax collected by him from the customers. The learned Government Pleader, however, admitted that the petitioner had filed the returns both monthly as well as annual for both the years under the K.G.S.T. Act as well as for the assessment year 1986-87 under the C.S.T. Act and had also paid the tax due as per the returns though belatedly. The learned Government Pleader also admitted that the penal interest under section 23(3) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the tax due as per the said returns as provided under the said provisions were not made within the time stipulated under the said provisions. Same is the case with regard to the C.S.T. assessment for the year 1986-87. 7.. The question arising for consideration is as to whether the authorities under the Act were justified in imposing penalty under section 45A of the Act and if so, as to the quantum of penalty to be imposed. Section 45A(1) of the Act without the two Explanations reads as follows: 45A. Imposition of penalty by officers and authorities.-(1) If the assessing authority or the Appellate Assistant Commissioner is satisfied that any person,- (a) being a person required to register himself as dealer under this Act, did not get himself registered; or (b) has failed to keep true and complete accounts; or (c) has failed to submit any return as required by the provisions of this Act or the rules made thereunder; or (d) has submitted an untrue or incorrect return; or (e) has failed to comply with all or any of the terms of any notice or summons issued to him by or under the provisions of this Act or the rules made thereunder; or (f) after purchasing any goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in section 45A of the Act and the concerned authority is also satisfied about the same, the levy of penalty is not compulsive, but only enabling or permissive. The maximum amount of penalty that can be levied is alone indicated. Before penalty is imposed the authorities are bound to give the assessee an opportunity of being heard. This Court further observed that the quantum of penalty should depend upon the gravity of the offence. The guidelines to be borne in mind with regard to such penal provisions have been stated by the Supreme Court in Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 at 214 as follows: .........An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judiciall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns and the annual return for the year 1986-87 under the C.S.T. Act and to remit the tax due as per the said returns along with the returns within the time stipulated under the Act and the Rules is due to any bona fide circumstances. It has to be held that the failure on the part of the petitioner to file the returns and to remit the tax is wilful. 10.. However, while considering the question of quantum of penalty it is not necessary to consider the gravity of the offences and other circumstances. In this case, as already stated, the petitioner had filed the monthly returns as well as the annual returns for the years 1985-86 and 1986-87 under the K.G.S.T. Act as well as for the assessment year 1986-87 under the C.S.T. Act though belatedly and tax due as per the said returns was also remitted. The petitioner has also paid the penal interest due on account of the delay in filing the returns. Thus, the loss, if any, caused to the State on account of the delay in making the remittance of the amount due to the State is compensated by the payment of penal interest. However, it cannot be said that the offence committed by the petitioner is only technical or venial. It is really of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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