Consent to the levy of penalty under section 45(6) of the Gujarat Sales Tax Act, 1969, given by the assessee's representative, includes the quantum of the penalty and cannot be limited to the legal aspect only.

The judgment of the Court was delivered by

A. P. RAVANI, J. - Under section 69 of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Act") the Gujarat Sales Tax Tribunal has referred two questions to this Court - one at the instance of the Revenue and another at the instance of the dealer. Applicant-dealer is a private limited company. It is manufacturing and selling radio and its spare parts and also television and its spare parts. For the assessment year commencing from April 1, 1975 to March 31, 1976, the Sales Tax Officer held that there was breach of declaration given in form 19 against which the dealer had purchased certain goods. Section 13(1)(B) of the Act, inter alia, provides for deduction of tax in certain cases. For availing of such deduction declaration in form 19 stating that the goods purchased shall be used in manufacture of taxable goods and that the taxable goods shall be sold within the State should be filed. The Sales Tax Officer found that the taxable goods were not sold within the State and thus there was breach of declaration. Therefore, the Sales Tax Officer levied purchase tax and also imposed penalty of Rs. 7,500 under section 45(1) of the Act. The Sales Tax Officer also imposed penalty of Rs. 64,500 by invoking the provisions of section 45(5) of the Act which provides for penalty in cases where the dealer did not pay the amount of tax, without reasonable cause, within the time prescribed for payment.

2. The dealer preferred appeal against the said order. The Assistant Commissioner of Sales Tax removed the penalty under section 45(5) of the Act. However, the Assistant Commissioner found that the amount of tax paid was less than 80 per cent of the tax assessed. Therefore there was deemed failure to pay tax as per the legal fiction created under section 45(6) of the Act. Hence he exercised his suo motu powers under section 67 of the Act and ordered to issue notice in prescribed form No. 49 and which also contained a gist of the order proposed to be passed. It was proposed to levy a penalty of Rs. 27,263.10 under section 45(6) of the Act. The representative of the assessee who received the notice made an endorsement on it and consented to the proposed order. The endorsement which is in Gujarati reads as follows :

* * *

It means order as per the above details is acceptable.

3. The Assistant Commissioner partially allowed the appeal as per order dated August 2, 1981 and he removed the penalty under section 45(5) of the Act. However, as proposed by him in the notice, he ordered to levy penalty of Rs. 27,263.10 under section 45(6) of the Act. The levy of purchase tax under section 16 of the Act and also the penalty imposed under section 45(1) were confirmed by him.

4. The dealer preferred second appeal in so far as it related to penalty under section 45(1) and 45(6) of the Act. The Tribunal in its judgment and order dated May 7, 1983, held that the consent given by the representative of the assessee was on legal aspect only and was not on facts. Therefore, according to the Tribunal it was open to it to examine the question as regards the quantum of penalty imposed under section 45(6) of the Act. The Tribunal directed that the penalty under section 45(6) of the Act be reduced to Rs. 9,100 only from Rs. 27,263.10. As regards penalty under section 45(1) of the Act, the Tribunal reduced the same from Rs. 7,500 to Rs. 1,500 only.

5. Both, the Revenue and the dealer felt aggrieved by the decision of the Tribunal and requested it to refer questions suggested to this Court. The questions referred and our answers to the questions are as follows :

1. Question at the instance of the Revenue. Answer

Whether, on the facts and in the circumstances of In negative. In

the case, the Tribunal was right in proceeding to favour of the

consider the question of penalty under section Revenue and

45(6) of the Gujarat Sales Tax Ac