Citation Codes

Equivalent Citations

citation codes

Case Number

Misc. Civil Case No. 299 of 1966

Advocates

K.K.Dubey
A.P.Sen

Judges

P.V Dixit, C.J
R.J Bhave, J.

Acts

Central Act. styled as "The Madhya Pradesh Sales Tax (Central) Rules, 1957" (hereinafter referred to as the Central Rules), and as Rule 7-A of the Rules
Section 17(3) of the State Act by virtue of Section 9(3) of the Central Act, then the provisions of Section 17(3) of the State Act
Rule 11 of the Central Sales Tax (Registration and Turnover) Rules, 1957,
provisions of the M. P. General Sales Tax Act, 1958. and the Rules
Section 17(3) of the Madhya Pra-desh General Sales Tax Act, 1958,
Section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958,
Rule 10-B: Application of the M. P. General Sales Tax Act, 1958,
Rule 15 of the Madhya Pradesh General Sales Tax Rules, 1959.
M. P. Sales Tax (Central) Rules. 1957. "Rule 7-A: Submission
M. P. General Sales Tax Rules, 1959 "Rule 15: Returns, (1)
Rule 15 of the M P. General Sales Tax Rules. 1959.
Section 13(3) of the Central Sales Tax Act, 1956
II. M. P. General Sales Tax Act, 1958. "Section 17(3):
Madhya Pradesh Sales Tax (Central) Rules, 1957,
provisions of the State Act and the Rules
Section 9(3) of the Central Sales Tax Act.
Central Sales Tax Act, 1936. "Section 9(3):
provisions of the State Act & the Rules
Section 9(3) of the Central Act
Rule 7-A of the Central Rules
Section 17(3) of the State Act.
Rule 12 of the Central Rules
Section 9 of the Central Act,
Rule 15 of the State Rules
Sub-rule (1),
Rule 10-B.

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Smart Summary

Structured Summary of the Provided Opinion

Factual and Procedural Background

This reference was made under Section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958 by the Sales Tax Tribunal (Board of Revenue, Madhya Pradesh) at the instance of the Commissioner of Sales Tax, Madhya Pradesh. The specific question referred to the court was whether a penalty for late submission of returns in Form V (appended to the Madhya Pradesh Sales Tax (Central) Rules, 1957) can be imposed under Section 17(3) of the Madhya Pradesh General Sales Tax Act, 1958.

Facts regarding assessment and appeal (as stated in the opinion):

For the period 15th December 1960 to 7th November 1961, the non-applicant assessee was assessed to Central Sales Tax by the Sales Tax Officer, Gwalior, Circle No. 2.
In that assessment the Sales Tax Officer imposed a penalty of Rs. 1,000 on the assessee under Section 17(3) of the Madhya Pradesh General Sales Tax Act, 1958, on the ground that the assessee failed to file the returns within the period prescribed by Rule 15 of the Madhya Pradesh General Sales Tax Rules, 1959.
On appeal, the Board of Revenue set aside the penalty order, holding that a penalty under Section 17(3) of the State Act could be imposed only if there were no rules framed by the State Government under Section 13(3) of the Central Sales Tax Act and that because rules had been framed under the Central Act (the Madhya Pradesh Sales Tax (Central) Rules, 1957), and Rule 7-A of those Central Rules contained a provision for imposition of penalty for breach of the Central Rules, no penalty under Section 17(3) of the State Act could be imposed.

Legal Issues Presented

Whether the penalty for late submission of returns in Form V (as appended to the Madhya Pradesh Sales Tax (Central) Rules, 1957) can be imposed under Section 17(3) of the Madhya Pradesh General Sales Tax Act, 1958.

Arguments of the Parties

Sales Tax Officer / Revenue Position (as recorded in the opinion)

The Sales Tax Officer imposed a penalty under Section 17(3) of the Madhya Pradesh General Sales Tax Act, 1958, because the assessee failed to file returns within the period prescribed by Rule 15 of the Madhya Pradesh General Sales Tax Rules, 1959.

Board of Revenue's Position (on appeal, as recorded in the opinion)

The Board set aside the Sales Tax Officer's order, taking the view that Section 17(3) of the State Act could be invoked only where the State Government had not framed rules under the relevant provision of the Central Sales Tax Act, and that because the State Government had framed the "Madhya Pradesh Sales Tax (Central) Rules, 1957" (the Central Rules) and Rule 7-A (and Rule 12) of those Central Rules addressed returns and penalties, the penalty could not be imposed under Section 17(3) of the State Act.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The opinion's analysis proceeds through statute and rule construction and application of settled principles governing the relation between Central Act rules and State Act provisions. The court's step-by-step reasoning as contained in the text is summarized below.

Character of Rule 7-A (Central Rules):
The court observes that Rule 7-A of the Madhya Pradesh Sales Tax (Central) Rules, 1957, deals primarily with the form in which a return (Form V) is to be submitted and expressly states that returns shall be furnished "in the manner and by the date prescribed in respect of returns under the general sales tax law in force in the State of Madhya Pradesh and the rules framed thereunder." Thus the Central Rule does not itself fix the manner and the date for submission; it points to the State law and rules for those particulars.
Identification of the actual breach:
If there is non-compliance with respect to the manner or the period of limitation for filing returns, the court says the breach is not of Rule 7-A but of Rule 15 of the M. P. General Sales Tax Rules, 1959 (the State Rules), which prescribes the time limits and manner for filing returns. A breach of Rule 15 is punishable under Section 17(3) of the State Act.
Operation of Section 9(3) of the Central Sales Tax Act:
The court relies on Section 9(3) of the Central Sales Tax Act (reproduced in the opinion) which provides that authorities empowered under the general sales tax law of the State shall assess, collect and enforce payment of any tax under the Central Act "in the same manner as the tax ... under the general sales tax law of the State is assessed, paid and collected" and that provisions of such State law "including provisions relating to returns, appeals, reviews, revisions, references, penalties and compounding of offences, shall apply accordingly." The court holds that by virtue of Section 9(3), the provisions of the State Act and rules govern matters such as returns and penalties in relation to Central tax assessments.
Role of Rule 10-B (Central Rules):
Rule 10-B of the Central Rules makes the provisions of the M. P. General Sales Tax Act, 1958 and the rules made thereunder applicable mutatis mutandis to proceedings incidental to the Central Act. The court notes that this further supports applying the State Act and its rules concerning imposition of penalties for late filing.
Consistency and hierarchy of norms:
The court observes that rules made under the Central Act are "subject to the provisions of the Act" and must be consistent with it; they cannot override statutory provisions of the Central Act. The court also addresses the potential overlap between Rule 12 of the Central Rules (which prescribes penalties for breach of Central Rules) and Section 17(3) of the State Act: if both apply, Section 17(3) being a specific provision relating to imposition of penalty for failing to file returns within time, should prevail over the more general Rule 12 of the Central Rules under the principle generalia specialibus non derogant (general does not derogate from special).
Error in the Board of Revenue's conclusion:
On this combined statutory and textual analysis, the court concludes that the Board of Revenue was in error in holding that the penalty in the present case was governed by Rule 12 of the Central Rules and not by Section 17(3) of the State Act.

Holding and Implications

Holding:

The court concluded that the penalty for late submission of returns in Form V is governed by the provisions of the M. P. General Sales Tax Act, 1958 (specifically Section 17(3)) and the relevant State Rules, rather than being exclusively governed by Rule 12 of the Central Rules. The opinion states that the Board of Revenue's view that Rule 12 of the Central Rules, and not Section 17(3) of the State Act, applied, was erroneous. (The final sentence in the provided opinion is truncated: "For these reasons, our answer to the question placed before us is that the penal ty for late submission of returns in Form V." The opinion's reasoning immediately prior to the truncation makes clear the court's conclusion as summarized above.)

Implications:

Direct effect on the parties: The court's analysis supports the conclusion that a penalty for non-compliance with the State time/manner requirements for filing returns (as in Rule 15 of the M. P. General Sales Tax Rules, 1959) can be imposed under Section 17(3) of the M. P. General Sales Tax Act, 1958. The Board of Revenue's setting aside of the penalty on the basis that only the Central Rules governed penalties in this context was held to be incorrect.
Broader precedent or additional consequences: The opinion does not state broader implications beyond the immediate statutory interpretation and the correction of the Board's approach; it principally concerns the proper statutory and regulatory source for imposing the penalty and the hierarchy/interaction between the Central Rules and the State Act and Rules. No new judicially stated precedent beyond this interpretation is set out in the provided text.

Note: This summary strictly reflects the material contained in the provided opinion. The original opinion text ends abruptly in mid-sentence; the summary above describes the court's reasoning and the explicit conclusions contained in the portions of the opinion that are present.

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Commissioner Of Sales Tax v. Kantilal Mohanlal And Brothers

1. The Sales Tax Tribunal (Board of Revenue, Madhya Pradesh) has made this reference under Section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958, at the instance of the Commissioner of Sales Tax, Madhya Pradesh. The question referred for our decision is:

"Can the penalty for late submission of returns in Form V appended to the Madhya Pradesh Sales Tax (Central) Rules, 1957, be imposed under S 17(3) of thf Madhya Pradesh General Sales Tax Act. 1958?"

2. For the period, 15th December 1960 to 7th November 1961 the non-applicant assessee was assessed to Central Sales Tax by the Sales Tax Officer, Gwalior, Circle No 2. In the said assessment, the Sales Tax Officer imposed a penalty of Rs. 1000 on the assesses under Section 17(3) of the Madhya Pradesh General Sales Tax Act. 1958. on the ground that the assessee failed to file the returns within the period prescribed by Rule 15 of the Madhya Pradesh General Sales Tax Rules, 1959. Tn appeal, the Board of Revenut set asidp the order taking the view that the penalty under Section 17(3) of the Madhya Pra-desh General Sales Tax Act, 1958, could be imposed onlv if there were no rules framed by the State Government under Section 13(3) of the Central Sales Tax Act, 1956 but that as the State Government had framed rules under the Central Act. styled as "The Madhya Pradesh Sales Tax (Central) Rules, 1957" (hereinafter referred to as the Central Rules), and as Rule 7-A of the Rules contained a provision for imposition of penalty for a breach of the Central Rules, therefore no penalty under Section 17(3) of the Madhya Pradesh General Sales Tax Act. 1958, could be imposed.

3. The relevant provisions to consider are:

I Central Sales Tax Act, 1936.

"Section 9(3): The authorities for the time being empowered to assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India and subject to any rules made under this Act, assess, collect and enforce payment of any tax, including any penalty, payable by a dealer under this Act in the same manner as the tax on the sale or purchase of goods under the general sales tax law of the State is assessed, paid and collected; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, appeals, reviews, revisions, references, penalties and compounding of offences, shall apply accordingly:

Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf, make necessary provision for all or any of the matters specified in this sub-section and such rules may provide that a breach of any rule shall be punishable with fine which may extend to five hundred rupees; and where the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues."

II. M. P. General Sales Tax Act, 1958.

"Section 17(3): If a dealer fails without sufficient cause to comply with the requirements of a notice issued under sub-section (1) or a registered dealer fails without sufficient cause to furnish under the said subsection his return for any period, the Commissioner may. after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum not exceeding one-fourth of the amount of the tax which may be assessed on him under Section 18 or where no tax is payable a sum not exceeding one hundred rupees."

III. M. P. Sales Tax (Central) Rules. 1957.

"Rule 7-A: Submission of returns. (1) Every registered dealer liable to pay tax under the Act shall furnish a return in Form V in respect of each period, for which his turnover is required to be determined under Rule 11 of the Central Sales Tax (Registration and Turnover) Rules, 1957, to the assessing authority in the manner and by the date prescribed in respect of returns under the general sales tax law in force in the State of Madhya Pradesh and the rules framed thereunder and to each such return he shall attach one copy of the receipted challan in Form X in respect of the tax due according to the return.

(2) Every registered dealer, referred to in Sub-rule (1), shall along with the return In Form V, furnish a list showing the total sales made to each registered dealer of different States separately during the period covered by the return which shall be duly signed and verified by him. The list, shall be in Form VI serial wise as far as possible.

Rule 10-B: Application of the M. P. General Sales Tax Act, 1958, and the rules made thereunder: Subject to the provisions of the Act, these rules and the Central Sales Tax (Registration and Turnover) Rules, 1957, the provisions of the M. P. General Sales Tax Act, 1958 (2 of 1959) and the rules made thereunder shall apply mutatis mutandis to all proceedings or other matters, incidental to the carrying out of the purposes of the Act.

Rule 12: Penalty; Any person committing a breach of any of the provisions of these rules shall be punishable with fine which may extend to five hundred rupees and when the offence is continuing one, with a fine which may extend to fifty rupees for every day during which the offence continues."

IV. The M. P. General Sales Tax Rules, 1959

"Rule 15: Returns, (1) Every registered dealer other than registered dealer having more than one place of business shall furnish to the appropriate Sales Tax Officer for each quarter of a year a return in Form VIII within 30 days from the expiry of the quarter to which the return relates. A registered dealer, having more than one place of business in the State, shall submit a consolidated return in Form VIII for all places of business in the State, including his principal place of business, and also a return in the same form separately for each of bis place of business in the State in the same manner within 60 days from the expiry of the quarter to which the return relates. Each of such return submitted shall be accompanied by a treasury receipted chalan in Form VI in respect of the tax due according to the return."

A perusal of Rule 12 of the Central Rules indicates that under that rule a penalty can be imposed for a breach of any of the Central Rules. Now, it will be seen that Rule 7-A of the Central Rules does nothing more than provide for the form in which a return has to be submitted. According to that rule, a return is to be submitted in the prescribed form in the manner and by the date prescribed in respect of the returns under the general sales tax law in force in the Slate of Madhya Pradesh and the Rules made thereunder. Thus, the manner and the date within which a return is to be filed is prescribed not by Rule 7-A but by the relevant provisions of the M. P. General Sales Tax Act, 1958. and the Rules made thereunder. If, therefore, there is any non-compliance with regard to the manner and the period of limitation in the filing of a return, then the breach is not of Rule 7-A but is of Rule 15 of the M P. General Sales Tax Rules. 1959. which prescribes the manner in which and the date by which a return should be filed A breach of Rule 15 of the State Rules is punishable under Section 17(3) of the State Act.

4. It may be noted that even if Rule 7-A of the Central Rules had not provided that the returns are to be submitted to the assessing authority in the manner and by the date prescribed in respect of the return under the general law in force in the State and the Rules framed thereunder, still the provisions of the state act & the rules thereunder with regard to the manner & the period of limitation for filing returns would have applied by virtue of Section 9(3) of the Central Sales Tax Act. That provision distinctly lays down that assessment, collection and enforcement of payment of any tax under the Central Act shall be by the authorities for the time being empowered to assess, collect and enforce payment of any tax under the State Sales Tax law and the Rules made thereunder, and has to be in the same manner as the tax on the sale or purchase of goods under the State Act is assessed, collected or paid and that the provisions of the State law including provisions relating to returns, penalties and offences shall apply. In the face of the statutory provision contained in Section 9 of the Central Act, it cannot be contended with any degree of force that Rule 7-A of the Central Rules itself fixes the manner in which and the date within which returns are to be submitted. The Board of Revenue was, therefore, in error in holding that the question of penalty in the present case was governed by Rule 12 of the Central Rules and not by Section 17(3) of the State Act.

5. The applicability of the provisions of the M. P. General Sales Tax Act, 1958, and the Rules made thereunder in regard to the imposition of penalty for not filing a return within the prescribed time also flows from Rule 10-B. Tt is easy to see that if Rule 12 of the Central Rules were taken as authorizing the imposition of a penalty for not filing a return in time, it would be inconsistent with Section 9(3) of the Central Act which expressly makes the provisions of the State Act and the Rules made thereunder applicable in the matter of assessment and collection of tax Those provisions cover matters relating to returns, imposition of penalties etc. Section 9(3) no doubt uses the expression "subject to any rules made under this Act". But the rules made under the Central Act can only be consistent with the provisions of that Act. They cannot override any statutory provision of the Central Act. That apart, even if it be held that the matter of imposition of penaltv for failing to file a return in time has been dealt with by Rule 12 of the Central Rules as well as by Section 17(3) of the State Act by virtue of Section 9(3) of the Central Act, then the provisions of Section 17(3) of the State Act being special provisions relating to imposition of penaltv for failing to file returns within time must prevail over the Rule 12 of the Central Rules on the principle of 'generalfa specialibus non derogant'.

6. For these reasons, our answer to the question placed before us is that the penal ty for late submission of returns in Form V.

Commissioner Of Sales Tax v. Kantilal Mohanlal And Brothers

Structured Summary of the Provided Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Sales Tax Officer / Revenue Position (as recorded in the opinion)

Board of Revenue's Position (on appeal, as recorded in the opinion)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Commissioner Of Sales Tax v. Kantilal Mohanlal And Brothers

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