TMI Blog2005 (2) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court, the Tribunal has, by mistake used the word "concluding" but with the consent of the learned counsel for the parties, we have read the word "confusing" instead of the word "concluding" because the said word does not make any sense). 2.. The petitioner is running a rice sheller at Kaithal and is also doing the business of commission agency. It is registered as a dealer under the Haryana General Sales Tax Act, 1973 (for short, "the 1973 Act"). It has been filing returns under section 25(2) of the 1973 Act on quarterly basis. In the third quarterly return filed for the period ending on December 31, 1975 (assessment year 1975-76), the petitioner did not disclose the purchase of paddy valued at Rs. 9,20,554 and did not deposit the tax, i.e., Rs. 65,727 as required by section 25(3). While finalising the assessment, the Assessing Authority noted that the petitioner had not filed correct return and observed that this was done with a view to avoid the payment of tax. He, therefore, issued notice to the petitioner proposing to levy penalty under section 48 of the 1973 Act. The same was accompanied by a detailed memo containing the facts relating to the incorrect return. In the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals), Ambala (hereinafter described as "the Appellate Authority") vide his order dated March 31, 1983, the relevant extracts of which are reproduced below: "After considering the matter, I am inclined to hold that the dealer had deliberately filed incorrect and false returns and he could not be permitted to say that since the turnover was returned in the later quarter the same had mitigated the offence of filing the third quarterly return falsely and incorrectly. The provisions for filing of revised return under section 48 also needs to be understood at this stage. Section 25(4) contemplates revised returns which may be justified on account of omission or error in the filing of the original return. It is not a case where the dealer has discovered any omission or other error in the original return which he tried to rectify in the later return. Had that been the position, I feel the position of the case would have been different. In this case, the admitted facts are that the dealer had deliberately suppressed the turnover and made up the same in the subsequent quarter on the grounds that he was financially tight which the provisions under section 25(4) neither contempla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by the Assessing Authority for levy of penalty which was confirmed by the Appellate Authority and the Tribunal should be declared as nullity because no evidence was adduced by the department to show that the petitioner had deliberately filed wrong return and withheld the tax payable for the third quarter. He further argued that no penalty could be levied on the petitioner under section 48 of the 1973 Act because the assessment was required to be made for whole of the year, i.e., 1975-76 and in the fourth quarter, it had not only rectified the deficiency in the quantum of purchases which had not been reflected in the third quarter, but also deposited the tax due. Learned counsel emphasised that the return filed by the petitioner for the fourth quarter should be treated as a revised return within the meaning of section 25(4) and argued that rejection of the petitioner's explanation for not showing the total purchases of the third quarter was by itself not sufficient to levy penalty under section 48 of the 1973 Act because no material was available before the Assessing Authority for forming an opinion that the petitioner had intentionally withheld the tax due in the third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax Act, 1956, for the period of one year ending 31st March last or part thereof, equal to or exceeding rupees one lakh, shall pay tax including Central sales tax by the 15th day of every month on his turnover of the previous month, in the manner prescribed: Provided that if he is not able to quantify his tax liability accurately by that time, he shall pay one-twelfth of the tax which he was liable to pay according to the monthly or quarterly returns, as the case may be, filed by him under the Act and the Central Sales Tax Act, 1956, for the period of one year ending 31st March last and in case he was not liable to pay tax for the full year or part thereof for which he has been liable to pay tax, and the balance, if any, he shall pay by the 25th day of the month, and the excess, if any, he may adjust towards the tax payable in the next month or thereafter. (3) Before any dealer as mentioned in sub-section (2) furnishes the returns, he shall, in the prescribed manner, pay into a Government Treasury or the Reserve Bank of India or the State Bank of India the full amount of tax due from him under this Act according to such returns and shall furnish along with the returns rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect in any material particular, the Commissioner or any person appointed to assist him under subsection (1) of section 3 may, after affording such dealer a reasonable opportunity of being heard, direct him to pay by way of penalty, in addition to the tax to which he is assessed or is liable to be assessed, a sum not less than twice and not more than three times the amount of tax which would have been avoided on the basis of aforesaid circumstances and where no tax is payable, a sum not less than one hundred rupees and not exceeding one thousand rupees." 8.. The word "quarter" has been defined in rule 2(q) of the Haryana General Sales Tax Rules, 1975 (for short, "the Rules"). The same reads as under: "(q) 'Quarter' means the period from (i) 1st April to 30th June, (ii) 1st July to 30th September, (iii) 1st October to 31st December, (iv) 1st January to 31st March." 9.. Rule 17 of the Rules (as it was in 1975-76), which too has bearing on this case reads as under: "Payment of tax and submission of returns. (1) Every registered dealer or a dealer on whom a notice in form S.T. 8 has been served under sub-section (2) of section 25 in the State shall furnish return to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for charging of interest. It lays down that if any dealer fails to pay tax as per the requirement of sub-section (2A) or sub-section (3), then he shall be liable to pay simple interest on the amount of tax remaining unpaid at one per cent per month from the date commencing with the date following the last date for the payment of tax, for a period of one month and at one and a half per cent per month thereafter during the period of default. Section 46 provides for levy of penalty if a dealer fails to comply with the requirement of sub-section (2) of section 25 of the 1973 Act. Section 47 provides for levy of penalty if a dealer fails to pay the tax due as per the requirement of sub-section (2A) or sub-section (3) of section 25. Section 48 lays down that if the dealer maintains false or incorrect accounts with a view to suppress his sales, purchases or stocks of goods, or conceals the particulars of his sales or purchases, the Assessing Authority may impose penalty which shall not be less than two times and not more than three times of the amount of tax which had not been paid by the assessee. Rule 17(1) requires filing of quarterly return by every registered dealer. Sub-rule (2) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 89] 177 ITR 455; (1989) 3 SCC 52, their Lordships of the Supreme Court, while dealing with a case involving imposition of penalty under section 271(1)(a) of the Income-tax Act, 1961 (for short, "the 1961 Act"), read that provision in conjunction with section 276C of the said Act and observed: "It is sufficient for us to refer to section 271(1)(a), which provides that penalty may be imposed if the Income-tax Officer is satisfied that any person has, without reasonable cause, failed to furnish the return of total income, and to section 276C which provides that if a person wilfully fails to furnish in due time the return of income required under section 139(1), he shall be punishable with rigorous imprisonment for a term which may extend to one year or with fine. It is clear that in the former case what is intended is a civil obligation while in the latter what is imposed is a criminal sentence. There can be no dispute that having regard to the provisions of section 276C, which speaks of wilful failure on the part of the defaulter and taking into consideration the nature of the penalty, which is punitive, no sentence can be imposed under that provision unless the element of mens rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy. The Appellate Authority and the Tribunal independently examined the matter and confirmed the finding recorded by the Assessing Authority that the petitioner had deliberately filed incorrect return with a view to avoid payment of the tax due. Therefore, we do not find any illegality in the order passed by the Assessing Authority for levy of penalty under section 48 of the 1973 Act which, as mentioned above, was confirmed by the Appellate Authority and the Tribunal. 16.. The deliberateness of the petitioner's part to suppress the figures of purchase made during the third quarter is clearly established from the fact that it had filed correct returns for the first two quarters and the fourth quarter and also paid the additional tax in the last quarter which was withheld while filing incorrect return for the third quarter. The lack of bona fides on the petitioner's part is Here italicised. established from the fact that it did not file revised return under section 25(4) of the 1973 Act and waited till the filing of fourth return. Later on, it tried to justify non-filing of the correct return for the third quarter and non-payment of the tax due by claiming that the assessment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und of non-disclosure of business profits from a particular mill. The facts of that case were that the assessment for 1959-60 was made under section 23(3) of the Income-tax Act, 1922. The assessing officer subsequently found that income from the business in the name of M/s. Kohinoor Grain Mills Sales Depot was not included in the return. For the subsequent three years, the assessee himself disclosed 20 per cent share of the profits from Kohinoor Mills. The assessing officer was of the opinion that Kohinoor Mills was not a genuine partnership but was the sole proprietorship concern of the assessee. The income from Kohinoor Mills was, therefore, included in the income of the assessee in all the four years. The non-disclosure of the business profits from Kohinoor Mills was considered by the assessing officer, to represent deliberate concealment. He, therefore, initiated penalty proceedings under section 271. As the minimum penalty leviable under section 271(1)(c)(iii) exceeded the sum of Rs. 1,000, the cases were referred under section 274(2) to the Inspecting Assistant Commissioner. After hearing the assessee, the Inspecting Assistant Commissioner came to the conclusion that he had c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale" and the appellant-company was a "dealer" for the purpose of sales tax under the Orissa Sales Tax Act, 1947. After examining the relevant statutory provisions, their Lordships of the Supreme Court held that supply of building materials constituted "sale". Their Lordships observed that those in-charge of the affairs of the appellant-company had acted in an honest and genuine belief that the company was not a dealer and as such, it was not required to be registered under the Act and held that levy of penalty was not justified. 21.. In the case of Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax, Indore [1980] 45 STC 197, the Supreme Court interpreted section 43 of the Madhya Pradesh General Sales Tax Act, 1958 and held that where the assessee does not include a particular item in the taxable turnover under a bona fide belief that he is not liable so to include it, the return cannot be treated as false warranting imposition of penalty. The facts of that case were that the appellant had effected certain transactions of sale of cement in accordance with the provisions of the Cement Control Order and deducted the amount of freight from the price shown in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1970] 76 ITR 696 and Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 and held that the penalty could not have been imposed on the assessee merely because the explanation given by it was not found satisfactory. 23.. In our opinion, none of the aforementioned judgments support the petitioner's plea because, as mentioned above, the facts brought on the record of this case show that the petitioner had deliberately suppressed the purchase of paddy valued at Rs. 9,20,554 and knowingly did not pay the tax due as per the requirement of section 25(3) before filing the third quarterly return. The admission made by the petitioner's representative before the Assessing Authority that the particulars of purchases were suppressed and the tax was not paid because of the financial stringency leaves no manner of doubt that the petitioner had deliberately acted in violation of section 25(2) and (3) of the 1973 Act and thereby made itself liable for penalty under section 48. We may add that if this Court is to accept the plea, like the one set up by the petitioner as bona fide, then in all cases, the assessees would suppress the particulars of sales and purchases, refrain from paying tax ..... 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