Himachal Pradesh High Court
Mehatpur Filling Station And Anr. vs State Of Himachal Pradesh And Ors. on 16 December, 1998
Equivalent citations: [2003]133STC101(HP)
Author: D. Raju
Bench: D. Raju, Lokeshwar Singh Panta
JUDGMENT D. Raju, C.J.
1. These writ petitions are dealt with together since they involve consideration and decision of identical questions of law of almost similar nature on certain common background of facts except certain variations and differences with reference to either the year of assessment of the petitioners who have come before this Court or the amount of tax involved as also the stage and manner in which they approached this Court. To illustrate, though in all cases the relief sought for is in the nature of writs of certiorari to quash the assessment orders, as also the appellate orders, passed by the appellate authority in these cases. It is stated that on earlier occasion the matter has been brought to this Court and this Court, in those matters, was pleased to set aside the order of the appellate authority on the ground of the same having not been passed by the competent authority and that the Commissioner also thereafter on suo motu action remitted the proceedings to the original authority for considering the matter afresh and thereafter the original authority adopted the same method and common formula of assessment, as in other cases.
2. For appreciating the grievance of the petitioners, it would not only be useful but necessary to advert to the facts in C.W.P. No. 555 of 1998. The petitioner is said to be running a petrol pump at Mehatpur in Una district and he has been issued with the licence by the Petrol Taxation Officer under the Himachal Pradesh Motor Spirit (Taxation of Sales) Act, 1968 (hereinafter referred to as "the Act") and the Himachal Pradesh Motor Spirit (Taxation of Sales) Rules, 1969, made thereunder. The petitioner in this case was subjected to assessment for the year 1992-93 vide order filed as annexure P-1 and for the year 1993-94 vide order filed as annexure P1/A of the Act under which apart from assessing the total tax due and payable penalty in a sum of Rs. 83,200 at 10 per cent and Rs. 400 p.m. for the months of April, 1992 to July, 1992, in all a sum of Rs. 83,600 was imposed. Similarly, for the year 1993-94 penalty in a sum of Rs. 1,46,200 was imposed, invoking the provisions contained in Section 5-A(5), and in addition thereto interest also appears to have been levied invoking power under Section 5-C of the Act. As against the said order of assessment imposing penalty and levy of interest, the petitioner filed an appeal before the prescribed appellate authority. The appellate authority also concurred with the conclusion of the assessing authority and rejected the appeal. Hence the above writ petition. It may be pointed out at this stage that there is no controversy or dispute over the amount of tax as such determined and the challenge as well as dispute is only with reference to the levy of penalty and interest.
3. The stand taken for the petitioners in all these cases including the present petitioner was that Section 5-A which enabled the imposition of penalty as also Section 5-C which empowered the levy of interest for belated payment of tax could not be invoked by the respondents-authority concerned in these cases in the absence of appropriate prescription of rules as envisaged therein, the manner and intervals in which the tax has to be paid and the returns which have to be submitted is contemplated under the main provisions of the Act as also the provisions contained in Section 24(2)(aa) and (h). As a matter of fact, the petitioners contend in all these writ petitions that though under Rule 15 of the Rules the procedure for filing the returns and deposit of tax, etc., has been prescribed for a retail dealer, yet, they were not applicable to the cases of the petitioners because the word "retail dealer" was deleted simultaneously with the insertion of Sections 5-A to 5-C in the Act and as the provisions stood after such amendment with effect from June 1, 1992, the petitioners no longer could be said to be a retail dealer and consequently in the absence of any specific rules framed under the Act prescribing the manner and intervals and the authorities to which such returns are to be furnished the question of reading into the machinery provisions any time-limit or imposing any penalty or levying any interest for the alleged non-compliance of such provisions fixing any time-limit does not arise. Therefore, according to the petitioners, the penalty imposed as also the interest levied is totally illegal, arbitrary, unjust and without jurisdiction. The further stand taken for the petitioners is that because no time-limit or period for filing the returns as well as the stipulation of any date by which the same was to be submitted have been prescribed by any statutory rules after the insertion of Section 5-A to Section 5-C in the main enactment and the authority to which such returns were to be filed has not been prescribed and notified, the petitioners cannot be attributed with any lapse warranting imposition of penalty or levying of any interest, as has been done in all these cases. The said stand taken by the petitioners in their pleadings have been reiterated by the learned counsel Mr. M.M. Khanna at the time of arguments. In addition thereto, the learned counsel for the petitioners also placed reliance upon Rule 16 of the Rules wherein it has been stipulated that if the amount of tax due is not deposited within the time prescribed under Rule 15 the Petrol Taxation Officer shall cause a notice in form PF appended to the rules to be issued and served upon the retail dealer requiring him to make payment of the unpaid amount of tax within ten days of the service of the said notice and that every said notice may be given to the retail dealer at an ordinary place or places of business and in case he was not found to be present on the said premises, to any person in the employ of the retail dealer who may be found upon the said premises and if inspite of such efforts taken the service could not be effected in the said manner it be left at the said premises or affixed in a conspicuous position upon some building or erection in the occupation of the retail dealer. It is further stipulated therein that if the tax is not paid within the time fixed by such notice issued, the retail dealer may be called upon to show cause and thereupon proceed to impose a penalty under Section 9 of the Act. Relying upon the said rules, it is contended by the learned counsel for the petitioners that the said procedure not having been followed in this case, there was no scope for levying penalty against the petitioners.
4. The respondents, through the second respondent have filed a common reply contending that the orders passed by the Petrol Taxation Officer, Una as also by the appellate authority, namely, the Deputy Excise and Taxation Commissioner are strictly in accordance with the provisions of the Act and Rules made thereunder. It is contended for the respondents in their reply that the power to levy penalty is ancillary to the taxing power and therefore cannot be said to be unconstitutional and the penalty is leviable on account of the deliberate failure on the part of the dealer to comply with the statutory provisions intended to ensure the timely realisation of a valid tax. It is also stated that the petitioners in this writ petition is a licensee in form P-1 since 1989-90 and in terms of the condition 4 of the licence read with Rule 15(a)(b) of the Rules the petitioner is statutorily liable to submit punctually, the monthly return and to deposit the amount of tax chargeable within the stipulated period of 21 days. A reference is also made to condition No. 4 which stipulated that the retail dealer shall submit punctually the monthly return of sales in form PC and also deposit the amount of tax chargeable within the stipulated period of 21 days. It is further contended that Sections 5-A to 5-D introduced with effect from June 1, 1992, created a statutory liability in the petitioner to act in accordance with those provisions and any one who fails to comply with them is rendered liable to penalty in a sum which shall not be less than 10 per cent but which shall not exceed one and a half times of the amount of tax to which he is assessed or is liable to be assessed. The petitioner, it is averred by the respondents not having ensured that this tax stood credited to the Government account within the stipulated period of 21 days, no exception could be taken to the levy of penalty under Section 5-A(5) of the Act. The respondents also contend that inasmuch as, Rule 15 of the Rules are still in force and provide for the manner in which the returns showing the sales of motor spirit are to be filed and tax paid in respect thereof, the petitioner who has not submitted the return and paid the tax in accordance therewith is liable to be proceeded against.
5. Reference is also made to the factual details stated in the order under challenge to substantiate the stand taken for the respondents-authority. Reference and reliance is made to the terms of Rule 15, condition No. 4 of the licence and the provisions contained in Section 5-A(3) of the Act about the manner of submission of the returns and payment of tax into the Government Treasury, not less than 10 clear days before the expiry of the date prescribed under Sub-section (2) for filing the return. Emphasis is made also to the prescription contained in Rule 15(b) about the payment of the amount within 21 days before the closure of the month to which it relates to.
6. The further stand taken for the respondents is that the rules particularly Rule 15 has not been rendered redundant with the introduction and insertion of Section 5-A of the Act and inasmuch as the said rule not only provides for the filing of the returns but also prescribe the manner in which it has to be submitted and the tax to be remitted, the said rule holds the field and continued to be in force. The omission/deletion of the word retail in the Act does not, according to the respondents, either curtail or delete the liability of the petitioners to pay the tax on the sale of the motor spirit by retailer or wholesaler and as long as the statutory liability to pay the tax under the charging Section 3 is not in dispute, the petitioners cannot avoid their liability for payment of penalty as well as interest in case of defaulted or belated payments. The rules framed under the Act invoking the powers under Section 25 of the Act are stated to be sufficient in law for he purpose on hand. The provision of Rule 15, as it existed, is said to be in consonance with the provisions contained in Section 5-A, in so far as the rules provided for filing of monthly returns in form PC which the petitioners/dealers have been filing throughout in all the years including the year of assessment under consideration. Strong reliance is placed on Section 5-A(5) of the Act for necessary power and authority to levy penalty. As for the plea based on Rule 16, it is contended for the respondents that the said rule had become redundant in view of the amendment and insertion of Section 5-A as well as Section 9 with effect from June 1, 1992 and to that extent the rule according to the respondents has to yield to the statutory provisions of the Act. It is also stated that the respondent-department has already been accepting the returns within the period of 21 days as contemplated under the existing Rule 15. While referring to Section 9 and Section 5-A(5), it is contended that Section 9 is a general provision and Section 5-A(5) being a special provision, Section 9 can be applied only in respect of contravention of provisions other than those in respect of which specific penalty provision is provided in the very provision the violation of which has been dealt with and therefore, the imposition of penalty and levy of interest is said to be justified.
7. The learned Advocate-General while reiterating the stand taken as above in the reply invited our attention to the relevant provisions of the Act as also to some of the decisions in response to the attempt made by the learned counsel for the petitioners and the reliance placed by him on the provisions of the Act and the Rules as also some of the decisions cited in support thereof.
8. Before adverting to a consideration of the relevant submissions by the learned counsel on either side, it would be appropriate to refer to the provisions of the Act and the Rules on which the learned counsel on either side placed strong reliance. The main Act, namely, the Himachal Pradesh Motor Spirit (Taxation of Sales) Act, 1968 (Act 10 of 1968) provided, as it was originally enacted, for the levy of tax on the retail sale of motor spirit and it contained a definition of retail dealer in addition to making at all relevant places about retail sales of motor spirit by a retail dealer and the levy of tax thereon. The Himachal Pradesh Motor Spirit (Taxation of Sales) (Amendment) Act, 1992 (Act No. 11 of 1992) which came into effect from June 1, 1992, paved way for the levy, under the Act, on all the sales of motor spirit and for that purpose deleted reference to retail dealers and retail sales by omitting the word retail wherever occurring in the Act vide Section 2 of Act 11 of 1992. The definition of dealer in Clause (g) of Section 2 also came to be substituted and so far as the payment of tax and filing of returns are concerned as well as assessment of tax and levy of penalty and payment of interest, Sections 5-A to 5-D were inserted for the first time. The provisions of Sections 5-A and 5-C read as follows:
"5-A. Payment of tax and returns.--(1) Tax payable under the Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed.
(2) Every dealer shall furnish such returns by such dates and to such authority as may be prescribed.
(3) Before a dealer furnishes the return required by Sub-section (2), he shall, in the prescribed manner, pay into a Government Treasury or the State Bank of India, or at the office of Assistant Excise and Taxation Commissioner or Excise and Taxation Officer-in-charge of the district, the full amount of tax due from him under the Act according to such returns and shall furnish along with the returns a receipt from such treasury, bank or office of the Assistant Excise and Taxation Commissioner or Excise and Taxation Officer-in-charge of the district showing the payment of such amount :
Provided that no payment of such amount shall be accepted at the office of the Assistant Excise and Taxation Commissioner or Excise and Taxation Officer-in-charge of the district save through a crossed cheque or bank draft payable at a local branch of a Scheduled Bank in favour of the Petrol Taxation Officer :
Provided further that where the payment is made through a crossed cheque, such crossed cheque must be delivered in the office of the Assistant Excise and Taxation Commissioner or Excise and Taxation Officer-in-charge of the district concerned, not less than ten clear days before the expiry of the due date prescribed under subsection (2) for filing the return, and the dealer shall be deemed to have made the payment only on the date on which such crossed cheque, after its presentation in the bank, is actually credited in to the Government account and necessary receipt is issued by the bank in favour of the dealer :
Provided further that where the payment is made through a crossed cheque and the cheque is dishonoured, the dealer shall be deemed to have not made the payment and shall be liable to any action which may be taken for not making payment under the Act or the Rules framed thereunder, Explanation.--For the purposes of this sub-section "Scheduled Bank" means a bank included in the Second Schedule to the Reserve Bank of India Act, 1934.
(4) If any dealer discovers any omission or other error in any return furnished by him, he may, at any time, before the date prescribed for the furnishing of the next return by him, furnish a revised return, and if the revised return shows a greater amount of tax to be due than was shown in the original return, it shall be accompanied by a receipt showing payment, in the manner prescribed in Sub-section (3) of extra amount.
(5) If a dealer fails without sufficient cause to comply with the requirements of the provisions of Sub-section (2) or Sub-section (3) the Commissioner, or any person appointed to assist him under subsection (1) of Section 20, may, after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum which shall not be less than ten per centum but which shall not exceed one and a half times of the amount of tax to which he is assessed or is liable to be assessed under Section 5-B in addition to the amount of tax to which he is assessed or is liable to be assessed, and where no tax is payable, a sum not exceeding one hundred rupees.
(6) If a dealer has maintained false or incorrect accounts with a view to suppressing his sales, purchases or stocks of motor spirit or has concealed any particulars of his sales or purchases or has furnished to, or produced before, any authority under this Act or the Rules made thereunder any account, return or information which is false or incorrect in any material particular, the Commissioner, or any person appointed to assist him under Sub-section (1) of Section 20, 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, an amount which shall not be less than twenty-five per centum, but which shall not exceed one and a half times of the amount of tax to which he is assessed or is liable to be assessed."
..........................
"5-C. Payment of interest.--(1) If any dealer fails to pay the amount of tax due from him under this Act except to the extent mentioned in Sub-section (2), he shall, in addition to the amount of tax, be liable to pay simple interest on amount of tax, due and payable by him at the rate of one per centum per month, from the date immediately following last date on which the dealer should have either filed the return or paid the tax under this Act, for a period of one month and thereafter at the rate of one and a half per centum per month till the default continues.
(2) If the amount of tax or penalty due from a dealer is not paid by him within the period specified in the notice of demand or, if no period is specified within thirty days from the service of such notice, the dealer shall, in addition to the amount of tax or penalty, be liable to pay simple interest on such amount at the rate of one per centum per month from the date immediately following the date on which the period specified in the notice or the period of thirty days, as the case may be, expires, for a period of one month and thereafter at the rate of one and a half per centum per month till the default continues :
Provided that where the recovery of any tax or penalty is stayed by an order of the High Court, or the Supreme Court or any authority appointed under this Act, the amount of tax or penalty shall, after the order of stay is vacated, be recoverable along with interest at the aforesaid rate on the amount ultimately found to be due and such interest shall be payable from the date the tax or penalty first become due.
(3) The amount of interest payable under this section shall,--
(i) be calculated by considering if part of a month is more than fifteen days as one month and any amount if more than fifty rupees but, less than one hundred rupees as one hundred rupees ;
(ii) for the purposes of collection and recovery, be deemed to be tax under this Act ; and
(iii) be in addition to the penalty, if any, imposed under this Act."
9. Likewise it is necessary to refer to some of the rules on which the submissions of the learned counsel on either side, require to be appreciated. Rules 15 and 16 read as follows :
"15(a). Before the submission of the monthly return required by Sub-rule (b) or (c), every retail dealer licensed in form P1, P2 or P3 shall pay the full amount of tax due under Section 3 of the Act on all retail sales of motor spirit as shown in the monthly return, into a Government Treasury or the branch of the State Bank of India through a challan form in form P.M., or at the office of the District Excise and Taxation Officer, provided that no payment shall be accepted at the office of the District Excise and Taxation Officer save through a bank draft or a crossed cheque, payable/drawn at a local scheduled bank in favour of the assessing authority :
Provided that where the payment is made through a crossed cheque and the cheque is dishonoured, the dealer shall be deemed to have not made the payment and shall be liable to any action which may be taken for not making payment under the Act or the Rules framed thereunder :
Provided further that the deposit in respect of retail sales made in each district shall be made under separate challans.
(b) Every retail dealer licensed in form P1, shall prepare or cause to be prepared a return in form P.C. appended to these Rules, of all motor spirit sold during the preceding month and shall lodge the said return with the Petrol Taxation Officer of the districts in which his licence has been issued, within 21 days of the close of the month to which it relates.
(c) Every retail dealer licensed in form P2 or P3, shall prepare or cause to be prepared separate return in form P.D., appended to these Rules of all motor spirit sold in retail during the preceding month in each district and shall lodge the said returns with the Petrol Taxation Officer of the district in which the sale took place within 30 days of the close of the month to which it relates.
(d) Every retail dealer licensed in form P1, P2 or P3 shall subscribe at the foot of the monthly return, a declaration duly signed by himself or by his duly authorised manager or agent, to the effect that the particulars set out therein are to the best of his knowledge and belief true, accurate and complete.
(e) Every monthly return submitted under Sub-rule (b) or (c) above shall be accompanied by the treasury or the State Bank receipt or other evidence of the payment of tax having been made in the manner prescribed under Sub-rule (a) above.
(f) The Petrol Taxation Officer, after satisfying himself that the payment of the amount shown in the monthly return has duly been made, shall cause to be issued a certificate in form P.E., appended to these Rules, and have it delivered to the retail dealer or his authorised manager or agent submitting the return, number and date of the certificate issued shall also be recorded at the foot of the return.
16. (a) If the amount of the tax due has not been deposited within the time prescribed under Rule 15, the Petrol Taxation Officer shall cause a notice in form P.F., appended to these Rules, to be issued and served on the retail dealer, requiring him to make payment of the unpaid amount of tax within 10 days of the date of service of the said notice.
(b) Every notice issued tinder Sub-rule (a) may be given to the retail dealer at his ordinary place or places of business or if the retail dealer be not found on the said premises, to any person in the employ of the retail dealer, who may be found upon the said premises, or if no such person be found, the same may be left at the said premises or affixed in a conspicuous position upon some building or erection in the occupation of the retail dealer.
(c) If the tax is not paid within the time fixed by the notice issued under Sub-rule (a), the Petrol Taxation Officer, may after calling upon the retail dealer to show-cause, proceed to impose a penalty under the provisions of Section 9 of the Act."
10. The learned counsel for the petitioners relied upon the following decisions in support of the stand taken for the petitioners. In Lohia Machines Ltd. v. Union of India [1985] 152 ITR 308 (SC), it was held that a rule made beyond the rule-making power or authority cannot be sustained to be a valid one notwithstanding the fact that the rule has been laid before the Parliament and that in the absence of any power conferred by means of a specific provision and guidelines in the Act itself there could be no delegation to the rule-making authority to prescribe any period of limitation. Adverting to the phrase "in the prescribed manner" occurring in Section 8(4) of the Central Sales Tax Act, 1956, it was construed by the apex Court in its earlier decision reported in Sales Tax Officer v. K.I. Abraham [1967] 20 STC 367, that the expression "in the manner" would denote only the mode in which the act was to be done and if any time-limit was to be prescribed for doing of the Act, specific words such as "the time within which" were also necessary to be engrafted in the statute itself. The apex Court held that the rule which provided for exclusion of borrowed monies and debts particularly long time borrowings in the computation of the "capital employed" by a new industrial undertaking for the purpose of the tax exemption could not be said to be outside the rule-making authority conferred under the Act. Reference has also been made to the decisions reported in Sales Tax Officer [1967] 20 STC 367 noticed by the apex Court in the earlier noticed decision. In Santosh Kumar Harlalka v. State of Assam [1995] 99 STC 615, a learned single Judge of the Gauhati High Court has held that Section 27(b) of the Assam General Sales Tax Act, 1993, made special provision relating to deduction of tax at source in certain cases and in the absence of any prescription as to the rate and manner of deduction, the authority concerned therein was held to have no jurisdiction to direct the Railway administration to deduct tax at 2 per cent from the payments made to the petitioners therein. Same view was taken by the very learned Judge in another decision reported in O.C. Corporation v. State of Bihar [1996] 102 STC 33 (Pat). A Division Bench of the Patna High Court held, while considering Section 31 of the Bihar Finance Act, 1981, as substituted by Bihar Ordinance 20 of 1993, which laid down that the transporters shall carry a declaration in a prescribed form in respect of the goods carried and produce the declaration and bill before the prescribed authority and which conferred power on the authority to search and seize in case of transportation in a manner likely to lead to the evasion of tax, observed that after the amendment to the provisions by substituting certain new provisions by virtue of the amendment ordinance if no forms were prescribed under the new provisions and no notification by the Commissioner adopting the old forms was also made, there was no scope for initiating any proceedings under the new amended provisions on account of any failure to produce such documents or any defect in the old forms. Reference has also been made to the memorandum regarding delegated legislation appended to the bill which preceded the Amendment Act 11 of 1992 in which it was stated, while referring to Clause 8 of the Bill as introduced, that it proposes to authorise the State Government to prescribe the form and manner in which certificate under Sub-section (3) of Section 3 shall be furnished by the dealer, the manner of furnishing security under Section 5, the manner and intervals at which and the authority to which the returns are to be furnished under Sub-sections (1) and (2) of Section 5-A together with the manner of payment of tax under Sub-sections (3) and (4), the manner of service of notice and of payment of tax, penalty or interest under Sub-sections (2) and (7) of Section 5-B, etc. Inspiration is also drawn from the passages from the text book on the Principles of Statutory Interpretation by Justice G.P. Singh, Sixth Edition, 1996 under the caption "Requirement of Laying of the Rules".
11. Per contra the learned Advocate-General invited our attention to some of the decisions to which a reference can now be made. In Chunilal Vallabhaji Gandhi v. State AIR 1959 Bom 554, a division Bench of the Bombay High Court held that the Bombay Drugs Rules, 1946, framed under the unamended Section 33(1) of the Drugs Act, 1940, must, in view of Section 24 read with Section 3(19) of the General Clauses Act, 1897, be deemed to have been made under Section 33(1) as amended by Act 11 of 1955 and remained in force till they were repealed by the rules framed by the Central Government in Act 10 of 1957 under the amended Section 33(1). In North Eastern Railway v. Ram Lal Golcha AIR 1960 Patna 489, relying upon Section 24 of the General Clauses Act which lays down that when any Act or regulation is repealed and re-enacted with or without modification then any form, etc., shall continue in force and be deemed to have been made or issued under the provision so re-enacted and held that although the phrase "Central Government" in Section 72(2) of the Railways Act has taken the place of the phrase "Governor-General-in-Council" after the Adaptation of Laws Order of 1948, any risk note form issued before in the name of the Governor-General-in-Council which occurred in Section 72(2) before its adaptation in 1937 must be deemed to have been approved by the Central Government. In Chief Inspector of Mines v. Karam Chand Thapar AIR 1961 SC 838 reliance once again came to be placed on Section 24 of the General Clauses Act, 1897, to hold that Coal Mines Regulations, 1926, made under the Mines Act, 1923, continued to be in force and have to be deemed to be Regulations made under the Mines Act, 1952. In State of Uttar Pradesh v. Batuk Deo Pati Tripathi [1978] 2 SCC 102, it was held that the powers to do a thing carries with it the powers to regulate the manner of doing it subject, however, to ensuring that the essence of the power is not thereby diluted. In A.S. Narayana Deekshitulu v. State of A.P. (1996) 9 SCC 548 while dealing with A.P. Charitable and Hindu Religious Institutions and Endowments Act, 1987 it was observed that the existence of rules is not always a condition for the Act to become operative. In Surjit Singh Kalra v. Union of India (1991) 2 SCC 87, the apex Court was dealing with the amendment introduced by the Amendment Act, 1957 of 1988 to the Delhi Control Act, 1958 and while dealing with the omission to prescribe new forms of summons to be issued, it was observed that the provisions of the Act ought to receive always a purposeful construction and that though it is not permissible to read words in a statute which are not thereout where the alternative lies between either supplying by implication words which appear to have been accidently omitted, or adopting a construction which deprives certain existing words of all meaning, it is permissible to supply the words, having regard to the context in which the amended provision appeared and the object of the statute in which the said provision is enacted the court should construe it in a harmonious way to make it meaningful. In Directorate of Enforcement v. Deepak Mahajan (1994) 3 SCC 440, the apex Court was dealing with the question of resolving difficulties in the implementation of the intention of the Legislature and the spirit of the law by emphasising upon or by making emphasis upon the duty of the Court to interpret legislation in consonance with the intention of Legislature by liberally interpreting the statute and in this connection quoted with approval a passage from Maxwell on Interpretation of Statutes, where it is found stated that where the language of a statute, in its ordinary meaning and grammatical construction leads to defeat the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended by the Legislature itself a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence and where the main object and intention of a statute are clear, it must not be reduced to a nullity by the draftsman's unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used.
12. The plea on behalf of the petitioners that in the absence of a new rule which specifically applied to dealers, in contrast to retail dealers to whom the Act and Rules as it stood earlier applied, the provisions of Rule 15 will have no application after June 1, 1992 has no merit. Equally untenable is the plea that after the insertion of amendments made to the Act as also the substitution of certain new provisions, rules afresh ought to have been made and Rule 15 made earlier will not enure for the purpose of working out the new provisions. Section 23 of the Himachal Pradesh General Clauses Act, 1969, which is in pari materia with Section 24 of the Central General Clauses Act, 1897, provides that where any Himachal Pradesh Act is repealed and re-enacted with or without modification, then unless otherwise provided all notifications, orders, rules, forms, bye-laws or appointments made or issued under the repealed Act shall be, so far as it is not inconsistent with the provisions re-enacted, deemed to have been made or issued and unless and until it is superseded by any such rules, orders or appointments made or notifications issued under the provisions so re-enacted. Consequently Rule 15 will continue to be in force and enforceable as such and cannot be considered to have been either abrogated or rendered nugatory or otiose. The contention of the learned counsel that the amendment introduced by Act 11 of 1992 is not by way of repeal and re-enactment and therefore the provisions of Section 23 will not therefore, be attracted is not correct. Repeal and/or amendment as a legislative practice is effected in different forms depending upon the exigencies necessitated to be met and it has been observed by the apex Court in AIR 1988 SC 740 (Bhagat Ram Sharma v. Union of India) as hereunder :
"17. It is a matter of legislative practice to provide while enacting an amending law that an existing provision shall be deleted and a new provision substituted. Such deletion has the effect of repeal of the existing provision. Such a law may also provide for the introduction of a new provision. There is no real distinction between 'repeal' and an 'amendment'. In Sutherland's Statutory Construction, Third Edn., Vol. 1 at p. 477, the learned author makes the following statement of law :
'The distinction between repeal and amendment as these terms are used by the courts is arbitrary. Naturally the use of these terms by the court is based largely on how the Legislature have developed and applied these terms in labelling their enactments. When a section is being added to an Act or a provision added to a section, the Legislatures commonly entitled the Act as an amendment...... When a provision is withdrawn from a Section, the Legislatures call the Act an amendment particularly when a provision is added to replace the one withdrawn. However, when an entire Act or Section is abrogated and no new Section is added to replace it, Legislatures label the Act accomplishing this result a repeal. Thus as used by the Legislatures, amendment and repeal may differ in kind--addition as opposed to withdrawal or only in degree--abrogation of part of a Section as opposed to abrogration of a whole Section or Act ; or more commonly, in both kind and degree--addition of a provision to a Section to replace a provision being abrogated as opposed by abrogration of a whole Section of an Act. This arbitrary distinction has been followed by the courts, and they have developed separate rules of construction for each. However, they have recognised that frequently an Act purporting to be an amendment has the same qualitative effect as a repeal--the abrogration of an existing statutory provision--and have therefore applied the term "implied repeal" and the rules of construction applicable to repeals to such amendments.'
18. Amendments in fact, a wider term and it includes abrogration or deletion of a provision in an existing statute. If the amendment of an existing law is small, the Act professes to amend ; if it is extensive, it repeals a law and re-enacts it. An amendment of substantive law is not retrospective unless expressly laid down or by necessary implication inferred."
13. In AIR 1971 SC 1358 (State of Assam v. Assam Tea Co. Ltd.) also it was held as hereunder :
"3. It is unnecessary to consider whether, as suggested by counsel for the State of Assam, by virtue of Section 336(3) once a notification under Section 4 of the Act of 1923 was issued, for all purposes a Town Committee became a municipality and on that account the notification continued to remain in operation. In our judgment, under the provisions of the Assam General Clauses Act, 1915, Section 26 saves the notification in question. Section 26 provides, inter alia :
'Where any enactment is repealed and re-enacted with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule, form or, bye-law, made or issued under the repealed enactment, shall so far as it is not inconsistent with the provisions re-enacted, continue in force and be deemed to have been made or issued under the provisions so re-enacted, ........................' There is no express provision in the Act 15 of 1957 which supersedes the notification issued in 1951 under the Act of 1923, nor is the continuance of the notification inconsistent with any provision in the new Act. The notification, must, therefore, be deemed to have remained in force and the State Government was competent in exercise of the power conferred upon it by Section 4 of Act 15 of 1957 to include within the area of Town Committee any local area contiguous to the same."
14. Once the provisions of Rule 15 are held to continue to be in force, by virtue of Section. 19 of the Himachal Pradesh General Clauses Act which stipulates that wherever by any Act of the State Legislature power to issue a notification, order or scheme, rule, form or bye-law is conferred then the expression used in the notification, order, rule or, bye-law shall unless there is anything repugnant in the subject or context, have the same respective meaning as in the Act conferring the power and the words in the Rules also to be construed in the same manner as meant under the Act and notwithstanding the omission to specifically delete the word "retail" in the Rules, the same have to be construed as though it meant only to refer to dealers or sales. This consequence also would result from Section 2 of the Amending Act 11 of 1992 providing for omission of the word "retail" wherever it occurred. Further, though the newly introduced provision envisaged and enabled the making of rules on certain aspects, if the rules already in existence were considered to serve the purpose and needs of the newly enacted/amended provisions, the mere omission to prescribe any rule after the new provision came into force will not operate as an impediment in enforcing the new provision in the Act together with the Rules already in force. The reliance placed on the memorandum regarding delegated legislation appended to the Bill introduced before an enactment was passed is not appropriate and in our view does not in any manner lend support to the plea projected that the Rules must have been necessarily made afresh under the newly enacted provision or that the omission to make rendered the provision newly inserted unworkable or unenforceable. The said memorandum, in our view, is by way of explanation to the legislators highlighting the provisions whereunder powers of delegated legislation are conferred in contrast to any conditional legislation contemplated by the Act and has a clarificatory object only to emphasise that the delegation is essential and normal in character and is not of any essential legislative powers as such.
15. The learned counsel for the petitioners drawing inspiration from the decision reported in [1967] 20 STC 367 (SC) (Sales Tax Officer v. K.I. Abraham) and [1985] 152 ITR 308 (SC) (Lohia Machines Ltd. v. Union of India), contended that a statutory provision in the Act which enabled the rule-making authority to prescribe the manner in which a declaration has to be filed cannot be construed to enable or empower the rule-making authority to prescribe any time-limit within which the declaration could be filed. The apex Court was construing in the said decision the expression "in the prescribed manner" occurring in Section 8(4) of the Central Sales Tax Act, 1956. So far as the case on hand is concerned the said reasoning cannot be successfully invoked to challenge the prescription made in the Rules to file the returns or pay the tax within the stipulated time. Section 5A enabled the rule-making authority to prescribe as to the manner in which as also the intervals at which the tax payable under the Act shall be paid. Clause (a) of Sub-section (2) of Section 24 also enables the rule-making authority to make rules for recovery of the tax leviable under Section 3, including the fixing of the time when the tax is to be paid. Likewise, Clause (c) of the said provision also enables the rule-making authority, by rules imposing on the dealers the duty of furnishing returns and of keeping records and registers of stocks and daily sales, etc., etc., and the manner in which they have to be verified and "all such other conditions thereof as may be necessary and prescribing a period within which such returns must be submitted". These provisions, in our view, are sufficient in law to confer upon the rule-making authority the required power to prescribe a limit within which the return is to be submitted and tax is to be paid, unlike the provision which fell for the consideration of the apex Court in a decision relied upon for the petitioners. Consequently, the challenge to the period of limitation prescribed within which the returns have to be submitted or the tax has to be paid cannot merit our acceptance. If the rules to that extent stipulating the time-limit within which the returns have to be submitted and tax has to be paid are held valid, the levy of penalty or the collection of interest for non-compliance or omission made, by virtue of the provisions contained in Section 5-A(5) or Section 5-C becomes inevitable.
16. The question that requires to be next considered by us is as to what extent the new provisions introduced and brought into effect by virtue of the Amending Act 11 of 1992 and the existing rules particularly Rules 15 and 16 could be enforced and with what consequence. We are concerned in these writ petitions only with reference to the challenge made to the penalty imposed against the petitioners under Sections 5-A(5) and the levy of interest made under Section 5-C. Section 5-A obliges on every dealer to furnish such returns by such dates and to such authority as may be prescribed and before a dealer furnishes the return he is required to pay into a Government Treasury or the State Bank of India or the authorities specified in Sub-section (3), the full amount of tax due from him under the Act according to such returns and shall furnish along with the returns a receipt for such payments. The proviso makes it clear that where the payment is made through a crossed cheque, it must be delivered in the office of the Assistant Excise and Taxation Commissioner or Excise and Taxation Officer-in-charge of the district concerned, not less than ten clear days before the expiry of the due date prescribed for the submission of return. Sub-section (5) provides that if a dealer fails without sufficient cause to comply with the requirements of subsection (2) or Sub-section (3), the Commissioner or any person appointed to assist him under Sub-section (1) of Section 20, may, after giving such dealer a reasonable opportunity of being heard, direct him to pay by way of penalty, a sum which shall not be less than ten per centum but which shall not exceed one and a half times of the amount of tax to which he is assessed or is liable to be assessed under Section 5-B in addition to the amount of tax to which he is assessed or is liable to be assessed. A reference to Rule 15 would show that before the submission of the monthly return it is required of a dealer licensed in form P1, P2, or P3 to pay the full amount of tax due under Section 3 of the Act on all sales of motor spirit as shown in the monthly return, into a Government Treasury or the branch of the State Bank of India or at the office of the District Excise and Taxation Officer. It also provides specifically that a retail dealer licensed in form P1 shall prepare or cause to be prepared a return and shall lodge the said return with the Petrol Taxation Officer of the districts in which his licence has been issued, within 21 days of the close of the month to which it relates. A combined reading of the statutory provisions of the Act and in the rules would mean that the return obliged to be filed by the petitioners ought to have been lodged within 21 days of the close of the month to which it related and though under the rules the deposit or payment of tax in the manner envisaged therein was to be before the submission of the monthly return, the statutory provision enacted under the second proviso to Sub-section (3) of Section 5-A would stipulate that where the payment is made through a crossed cheque, such crossed cheque must be delivered in the office of the Assistant Excise and Taxation Commissioner or Excise and Taxation Officer-in-charge of the district concerned, not less than ten clear days before the expiry of the due date prescribed under Sub-section (2) for filing the return, and the dealer shall be deemed to have made the payment only on the date on which such crossed cheque, after its presentation in the bank, is actually credited into the Government account and necessary receipt is issued by the bank in favour of the dealer. Therefore, if a dealer, after June 1, 1992, chose to effect payment of the tax due as per the return through a crossed cheque, he should do so within 10 days before the expiry of the period of 21 days of the close of the month to which the tax related. The penalty envisaged for being levied in case of default of compliance under Sub-section (5) of Section 5-A is not the same thing as the penalty contemplated under Section 9 of the Act. This is made clear from a reading of the amended provision of Section 9 which came into force on June 1, 1992 by stipulating therein that the penalty under Section 9 becomes leviable for any contravention or failure to comply with any of the provision of the Act or the Rules made thereunder or any order or direction made or given therein, if no other penalty is provided under the Act for such contravention or failure and the levy under Section 5-A(5) being one such provision which provided for a levy of penalty itself, Section 9 has no relevance to such cases. Viewed in this context the grievance of non-compliance with Rule 16 has no merit since the penalty contemplated to be imposed by issue of notice under Rule 16 is the one to be levied under Section 9. Consequently, it becomes necessary for the original authority to redetermine the question of levy and quantum of penalty to be levied in each of these cases in the light of the construction placed on the provisions by us in this order. So far as the levy of interest under Section 5-C of the Act is concerned, it is rendered possible if any dealer fails to pay the amount of tax due from him and inasmuch as we have indicated that on a combined reading of Section 5-A and Rule 15 the time within which the return should have been submitted or tax should have been paid, the quantum of interest to be levied also has to be reviewed or reconsidered in the light of the same in respect of the petitioners with reference to the orders under challenge before us. The authority concerned who passes any order under the Act has been conferred with the power of review under Section 23 of the Act and we direct the concerned taxing authorities in these cases to take up on their own a review and reconsideration of the orders in the light of our orders to redetermine and revise, if need be, the quantum of penalty and interest and till such review and determination directed by us is made and revised orders, if any, are communicated to the petitioners concerned the taxing authorities shall withhold their hands for recovering any of the amount remaining due from the respective petitioners, under the orders under challenge.
17. For all the reasons, we reject the claim of the petitioners that in the absence of any fresh rules made under Section 5-A or Section 24(2)(aa)(c) and (h) no penalty or interest could be levied and collected from the petitioners and the writ petitions fail and shall stand rejected, subject to the directions given by us to the taxing authorities concerned in all these cases to review and reconsider the quantum of penalty or interest in the light of the principles laid down by us as to the time-limit within which the obligation to submit the return and pay the tax is fixed with the petitioners and pass revised or confirmatory orders in the light of the directions issued.
18. CMP No. 1099 of 1998 in CWP No. 555 of 1998.
In view of the disposal of the writ petition, the present application is dismissed.