Madras High Court
Khivraj Motors Ltd. vs Commercial Tax Officer (Ct) Iv, Madras ... on 10 December, 1981
Equivalent citations: [1982]50STC141(MAD)
ORDER Ramanujam, J.
1. The petitioner-company is a dealer in motor cars, automobile spares and other allied items. It has opted for payment of sales tax on the basis of the monthly returns in form A-2. While re-examining the figures given in the monthly returns for the year 1977-78, it was discovered that there was a discrepancy in the monthly returns filed for the month of December, 1977, and therefore, on 28th July, 1981, it filed a revised return for the month of December, 1977. In accordance with the said revised return the petitioner also paid sales tax, surcharge and additional tax amounting of Rs. 66,698. On receipt of the revised return, the first respondent passed an order dated 31st August, 1981, under section 24(3) of the Tamil Nadu General Sales Tax Act stating that the petitioner should have paid the amount of tax for December, 1977, on or before 25th January, 1978, and since the payment has been delayed from 25th January, 1978 to 28th July, 1981, the petitioner has to pay a penalty of Rs. 57,360 under section 24(3) of the said Act. The petitioner has now challenged the said communication dated 31st August, 1981, received from the first respondent.
2. As against the impugned proceedings dated 31st August, 1981, the petitioner has got a right of revision to the Deputy Commissioner, Commercial Taxes, under section 33 of the Tamil Nadu General Sales Tax Act, hereinafter referred to as the Act, and a further revision under section 35 of the Act. The learned counsel for the petitioner says that since the petitioner is questioning the validity of section 24(3) of the Act, those questions cannot be urged before the revisional authorities.
3. The contention urged by the petitioner is that section 24(3) in so far as it does not give an opportunity to the assessee to put forward his objections to the levy of penalty, the said section is void and inoperative. The learned counsel for the petitioner says that whenever a penalty is sought to be levied a prior opportunity to the assessee to object the levy of penalty should be provided in the statute as has been done in section 274(1) of the Income-tax Act, 1961, which says that no order imposing a penalty under Chapter XXI shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. Chapter XXI of the Income-tax Act provides for levy of penalty, for failure to furnish returns, failure to comply with notices, concealment of income, failure to answer questions, failure to keep, maintain or retain books of account, etc. In those cases discretion is given to the authorities concerned to levy penalty up to a certain limit. Since discretion is given to the authorities to levy penalty up to a particular limit according to the circumstances of each case, naturally under section 274(1) a reasonable opportunity of being heard has been given to the assessee. But in this case section 24(3) of the Act however does not give any discretion to the assessing authorities in the matter of levy of penalty. Therefore no purpose is served in giving an opportunity to the petitioner to put forward his objections. Section 24(3) of the Act is as follows :
"If the tax assessed under this Act or any instalment thereof is not paid by any dealer or person within the time specified therefor in the notice of assessment or in the order permitting payment in instalments, the dealer or person shall pay by way of penalty, in addition to the amount due a sum equal to a sum calculated at the rate of two per cent of such amount for each month or part thereof after the date specified for its payment."
4. According to the said section if the tax assessed is not paid within the time specified, the dealer shall pay the penalty prescribed in that section. Thus the section does not give any room for exercise of any discretion by the assessing authority. When the quantum of penalty is fixed by the section itself and is directed to be collected without giving any discretion to the assessing authority there is no question of the assessing authority giving any opportunity to the assessee to show that the case does not warrant any levy of penalty. When the legislature has provided that any tax assessed is not paid within the date specified penalty should be collected for the delay in payment of the tax assessed, the section cannot be said to be invalid. If the section provides for certain contingency under which the assessing authority is enabled to waive the penalty, an opportunity should be given to the assessee, but where the statute says that if the tax assessed is not paid within the specified date, an additional amount by way of penalty shall be paid by the assessee, there is no question of the assessee being given an opportunity to put forward his objections not to levy the penalty. That the legislature has power to make such a provisions cannot be doubted. It is true the provision in section 24(3) is very stringent but the legislature has got the power to enact such a provision for the effective recovery of the tax assessed. Section 24(3) is therefore quite valid and enforceable.
5. The writ petition is therefore dismissed. The petitioner is, however, given liberty to approach the revisional authority under section 33. The learned counsel for the petitioner says that any revision filed before the Deputy Commissioner of Commercial Taxes now will be out of time. It cannot be disputed that the time taken by the petitioner for prosecuting the writ petition should have to be excluded. Even if there is any delay the petitioner can move the Deputy Commissioner for condonation of the delay and the Deputy Commissioner will consider the question of condonation of the delay, if any, in filing the revision sympathetically after taking into account the bona fides of the petitioner.
6. Petition dismissed.