SHIV DUTT RAI FATEH CHAND ETC. ETC. v. UNION OF INDIA & ANR. ETC

Citation: [1983] 3 S.C.R. 198

Court: Supreme Court of India

Bench: A.P. SEN, E.S. VENKATARAMIAH

Case summary

For the purpose of understanding the points of dispute raised in the3e cases, it is necessary to deal with the history of the fogislation relating to taxes on inter-State Sales and purchases of goods during the post-Constitution period....

Judgment text

SHIV DUTT RAI FATEH CHAND ETC. ETC. v. UNION OF INDIA & ANR. ETC. May 6,1983 (A. P. SEN AND E. S. VENKATARAMIAH, JJ. ] Central Sales Tax Act, 1956-Sub-section (2-AJ ofsection 9 introd. "Jced by Ceritral Sales Tax (A1nendment) Act, 1976-Applicability ofprovisions relating to penalties leviab/e under general sales tax laws of the States to the proceedings under the Act-And seltion 9 ofthe Central Sales Tax (An1end111ent) Act, 1976- RelroSpective opera/ion-Whether sub_-section (2'-A) ofsection 9 of the Act suffers from vice ofexcessive delcgation-iVhether sub-section (2-A) and section 9 of tfie Amending Act· violative ofArticle 19 (I) (f) and (g) and Article 20 (I) of the ConStitution. · .... Haryana General Sales Tax Act, 1973-Section 48-Whether confers D. 1111canalised, unguided and arbitrary power-Validity of~ Constitution oflndia-Arifr! e 20 gives const(tutional prot~ctio11 lo pe,-sot1s charged with crin1e before crin1in,al court.

Words and phrases-Penalty-Meaning of-A Word of wide sfgnificailce-· Used in Article 20 (J) ofthe Constitution in a narrow sense. Section 9 of the Central Sales Tax Act, 1956 as ariiended retrospe·::tively by the Central Sales Tax (Amendment) Act, 1969 provided for levy aiid collection of tax. and penalties on sale of goods effected by a dealer in the course of inter-State trade or commerce. It further provided tt~at the authorties for the tin\c being empowered to assess, re-assess, collect and enforce payment of. any tax under the gener8. I sales tax law of the· apprOpriate State shall, on behalf of Govern1nent of India, assess, re-assess, collect and enforce payment of tax including any penalty, payable by a dealer under Lhis ACt as if the tax or penalty payable by such a-dealer umil. cr this Act is a tax or penalty undef the general sates tax Jaw of the State; and for this purpose they 1nay exercise all or any of , ..

the powers they have under the general sales tax 13:W of the State. Consequent . - upon the decision of this Court in Khe111ka & Co. v. State of Maharashtra; [1975) 3 S. C. R. 753 l1olding by a majority that it was not open to the authorities under the State law to levy and recover penalty for delay or default in payment of tax under the Central Sales Tnx Act, 195_6, section 9, of the Act came -to be amended by the Central sales Tax (Amendn1ent) Act, 1976 introducing sub-section (2-A) in it. Sub-section (2-A) of section 9 provided that all the provisions relating to offences and penalties (with certain_ exceptions) of H. the g,~TI. eral sales tax Jaw of each State shatt with necessa,ry modification, apply in rela1ion to the assessment, re-assessment, colkction and the enforcement or 'I. payment of any ta~ required to be collected under thjs Act in such State as if the tax under this Act were a tax ·under such sales tax law. SillV DUTT v.

UNION 199 Section 9 of the Amending Act, 1976 declared that the provisions of section 9 of the 1956 Act would have effect and should be deemed· always to have had effect in relation to the period commencing from January 5, 1957 (the date of coming into force of 1956 Act) and ending with the date imrrtediately proceeding the date of com1nencement of the Amending Act. The petitloners in these two batcl1es of petitions filed under Article 32 of the Coflstitution are dealers under the Central Sales Tax. Act, 1956 (herein-after referred to as 'the Act') having their places of business at.. Maharashtra, Haryana etc. They have questioned the const. itutional validity of sub-section (2-A) of section 9 of the Act as introduced by the Central Sales Tax (Amendment) Act, 1976 (herein-after referred to as 'the Amending Act' and section 9 of the Amending Act validating _.

the levy of penalties under thC Act with retrospective effect on the following grounds : • (1) That th'e introductioO of sub-section (2-A) in secticin 9 of the Act b)' the Arr. ending . Act, 1976 does. not have the effect of- making the provisiolls relating to p. ::nalties leviab! e under the general sales tax laws of the States applicable to the assessees under the Act asThe word 'penalties' is not found along with the words 'assessment, re-assessment, collection and the enforcem·ent of payment of any tax' in sub-section (2-A. ); the lacuna in the Act, which was pointed out by this Court in Kehmka's case nainely. that there is no specific proviSion lev·ying penalties in the Act remaias unfilled up even now and hence no penalties can be recovered by utilising the provisions o( the ge_neral sales tax laws of the respec! ive States.

(2) Sub-section (1-A) of section 9 suffers from the vice Of excessive delegation of legislative power; the Parliament by ado"'ting the proyisions relatiDg to offences· and penalti~s referred to in. the various general sales tax laws of ! he States has abdicated its essentjal legislative function. ' (3) That sub-section (2-A) of section 9 of the Act and section. 9 of the Amending Act are violative of Article 20 (I) of the Constitiution; that any act or omission which is considered to be a default under the Act for which penalty is leviable is an offence, that such act or omission was not . an ofrence, "'and no penalty was payable under the law in force at the time when it was committed and hence they cannot be punished by the levy o~ penalty under a law which is given retrsopective effect.

(4) The levy and collection of penalties with retrorpectiVe effect itmo-Unts to an imposition of an unreasonable restriction on t}le funda~Cntal right ofthe petitioners to own property: and to ·carry on business guamteed under Article 19 (I) (f) and (g) of the Constitution. (5) That in the case of assessees of the State of itaryana, section 48 or the Haryana General Sales Tax Act, 1973 which authorises the levy of penalty of 'a sum of not less than twice arid mor~ than ten times t. he amount ·of tax' on proof of the defaults mentioned therein is violative of Article 14 of th~ \ ~oil sti~REME cbtil e deemed to have had effect in relation to the period commencing on January 5,. 1957 and ending with the date immediately preceding the date of commencement of the Amending Act. That is obvious from the similarity of the language between sub-section (2·A) of section 9 of the Act and section 9 (I) of the Amending Act.

Section 9 (2J of the Amending Act also contained the usual provision validating the levy of penalties completed prior to the commencement of the Amending Act and authorising the continuance of the proceedings for levy of penalties in respect of the period commencing from January 5, 1957. In the instant case it may be noted that in all the general sales tax laws of the States, there were provisions requiring every dealer to comply with statutory requirements. such as the filing of returns, the payment of the tax due within the specified time e'tc. and they were applicable to the dealers under the Act by reason of section 9 (2) of the Act. Notwithstanding such statutory provisions many dealers failed to perform their statutory duties.

They would have been liable to penalties mentioned in the relevent statutory provisions if the defaults committed by them were those committed under the said statutory provisions On the basis of the language of sub-section (2) of section 9 of the Act in many States proceeding for levying penalties in accordance with the provisions relating . to penal! ies in their respective general sales tax laws were commenced against such ein~ in for~~. The marginal note of our Article 20 is 'protection in respect of convic· lion for offences'. The presence of the words 'convition' and 'offences', in the marginal note 'convicted of an offence'' 'the act charged as an offence' and 'commission of offence' in clause (I) of A1ticle 20, 'prosecuted aud punished' in clause (2) of Article 20 and 'accused of an offence' and 'compelled to be a Witness against himself' in clause · (3) of Article 20 clearly suggests that Article 20 rcla.

tes to the constitutional protection given to persons· who are charged with a crime before a criminal court. (See. H. M. Seervai : Constitutional Law of India (3rd Editiqn) Vol. I, page 759). The word 'penalty' is a word of wide significance. Sometimes it means recovery of an amount as a penal measure even in a civil proceeding. An exaction which is not of compensatory character is also termed as. a penalty even though it is not being recovered pursuant to an order finding the person concerned guilty of a crime. In Article 20 (I) the expression 'penalty' is used iu the narrow sense as meaning a payment which has to be made or a deprivation of liberty which has to be ~uffered as a consequence of a finding that the person accused of a crime is guilty of the charge. In Maqbool Hussain v. The State of Bombay. (!

) the question for consideration was whether when the customs authorities confiscated certain goods under the Sea Cμstoms Act there was a prosecutson and the order of confiscation constituted a punishment within the meaning of clause (2) of Article 20. Negativing the said plea, the Court observed at pages 738-739 : "·The very wording of article 20 and the weirds used therein :-" convicted "commission of the act charged a. s an offence", "be subjected to a penalty", "commission of / . the offence'', "prosecuted and punished", "accused of any offence", would indicate that the proceedings therein contemplated are of the ·nature of criminal proceedings before a court of law or a judicial tribunal and the prosecution in this context won. Id mean an initiation or starting of proceedings of a criminal nature before a court of law or a judicial tribunal in accordance with the procedure prescribed· in the statute which creates thi: offence and regulates the procedure. " SHIV DUTI v.

UNION (Venkataramiah, J. ) 221 The levy of charges for 'unauthorised use' of water enforced with retrospective effect was held to be not offending Article io . (I) in 1Jawala Ram v. State of Pepsu. (1) Similarly in State of West Bengal v. S. K. Ghosh,(') the forfeiture provided under sectiO'n 13 (3) of the Criminal Law Amendment Ordinance 1944 (38 of 1944) was held to be not a penalty within the meaning of Article 20 ( l) of the Constitution and in that connection this Court observed at pages 130-131 thus:- "Article 20(1) deals with conviction of persons for offences and for subjection of them to penalties~ It provides firstly that "no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence". Secondly, it provides that no person shall b,e "subjected to a penalty greater than that ,which might have been inflicted under the law in force at the time of the commission of the offence". Clearly, therefo!

'e, Art. 20 is dealing with punishment for offences and provides two safeguards namely, (! ) that no one shall be punished for an act which was not an offence under the law in foq;e when it was committed. and (ii) that no one shall be subjected to a greater penalty for an off~nce than what was provided under the law in force when the offence was committed. The provision for forfeiture under s. 13(3) has nothing to do with the infliction of any penalty on any person for an offence. If the forfeiture provided ins. 13(3) we're really a penalty on a convicted person for commission of an offence we should have found it provided in the 1943 Ordinance and that penalty of forfeiture would have been inflicted by ihe criminal court trying the offender.

~· Again while upholding section 25 FFF(l) (which came into force on June 6, 1957) of the Industrial Disputes Act, 1947 which directed compensation to workers who had been retrenched earlier ori and after November 28, 1956, this Conrt observed in Hatisingh Mfg. Co. Ltd. & Anr. v. Union ~f India & Ors. (') at pages 536 and 545 thus: (1) [1962] 2 S. C. R. 503. (2) [1963]2 $. C. R. 111. \3) [l960j 3 S. C. R,. S~, "A law which creates a civil liability in respect of a transaction which has· taken place before the date on which the Act was enacted does not per se impose an unreasonable restriction ...... (page 536) If the statute fixes criminal liability for contravention of the prohibition or the command which is made appli· cable to transactions which have taken place before the date of its enactment the protection of Art. 20(1) may be attracted........ By s. 33(c) liability to pay compensation may be enforced by coercive process, but that again does not amount to infringement of Art.

20(1) of the Consti· tution. Undoubtedly for failure to discharge liability to pay compensation, a person may be imprisoned, under the statute providing for recovery of the amount, e. g. , the Bombay Land Revenue. Code, but failure to discharge a civil liability is not unless the statute expressly so provides, an offence. The protection of Art. 20(1) avails . only against punishment for an act which is treated as an offence which when done was not an offence. " (page 545) The petitioners have relied upon certain decisions in support of their contention. We shall deal with some of them. It is true that in Rai Bahadur Hurdut Roy Moti Lall Jute Mills v. The State of Bihar & Anr. (') the High Court of Patna held that the amendment of section 14A of the Bihar Sales Tax Act, 1947 by Bihar Act IV of 1955 in so far as it. authorised the imposition of the p0malty of forfeiture of the amounts collected earlier by dealers in contravention "of the provisions of section 14A, without.

prejudice to any punish· ment for an offence under that Act, was violative of Article 20(1) of the Constitution. We have gone through that decision. We do not find any tenable reason given by the High Court in support of its view. It may be added here that in the appeal filed against that decision before this Court in The State ofBihar v. Rai Bahadur Hurdut Roy Moti Lall Jute Mills & Anr. (') the judgment of the High Court was confirmed on the ground that the penalty of forfeiture was not (! ) [195617 S. T. C. 609. (2) A. I. R.. 1960 S. C. n~. SHIV DU1'T V. UNION (Venkataramiah, J. ) 229 imposable on the facts of that case; but on the question of the applicability of Article 20(1) to the case, this Court declined to express any opinion on the ground that it was. purely an academic 1 issue. In Shew Bhagwan Goenka v. Commercial Tax Officer & Ors.

( ) the Calcutta High Court observed that the retrospective operation of an amendment to the Bengal Finance (Sales Tax) Act, 1941 which imposed an unexpected liability in respect of certain transactions ti which when they took place· were not subject to any charge or liability under that Act was opposed to Article 20(1) of the Constitution. In that case the facts were that. as a result of the modifica- • lion of the definition of the word ~business' with retrospective effect, the assessee became liable to pay tax on the turnover . relating to sales of certain old and discarded machineries and equipments. The assessee had not been prosecuted for any offence or punished by any · criminal court as a consequence of such amendment. It was open to the High Court to hold that· if there was any such prosecuti. pn for any offence it was violative of Article 20(1). But in so far as , realisation of tax was concerned Article 20(1) did not in terms apply.

Reference to Article 20(1) was, therefore, unnecessary for deciding that case. The observations made by this Court in Commissioner of • Wealth Tax, Amritsar v. Suresh Seth('! at page 430 to the effect: ... "In the case of acts amounting to crimes the punishment to be imposed cannot be enhanced at all under our Constitution by any subsequent legislation ·by reason of Article 20(1) of the Constitution which declares that no person shall be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the com. mission of the offence. In other --... cases, however, even though the liability may be enhanced it can only be done by a subsequent law (of course subject to the Constitution) which either . by express ' Words or by necessary implication provides for such enhancement. '' are obviously of no assistance to the petitioners. On the other hand, a ·Full Bench of the High Court of Allahabad has held in Raghunandan. Prasad Mohall Lal v.

Income-tax II (I) [1973] 32 S. T. C. 368. (2) (1981] 3 S. CR: 419, Appal/ate Tribu110/, Delhi Bench & Ors. ( ) that Article 20 of the Constitution contemplates proceedings in the nature of criminal proceedings and it does not. apply to penalty proceedings under the Income-tax Act, 1961 which have a civil sanction and are revenue in nature. The High Court of Madhya Pradesh has held in Central India Motors v. C. L. Sharma, Assistant Commissioner of Sales Tax, Indore Region, Indore Anr. ('Y that Article 20(1) is not attracted to the case of a levy of penalty made with retrospective effect· under the . Madhya Pradesh General Sales Tax Act, 1958. After giving an anxious consideration to the points urged before us, we feel tbat the word 'penalty' used in Article 20( I) cannot ·C be construed as including a 'penalty' levied nnder the sales tax laws by the departmental authorities for violation of statutory provisions.

A penalty imposed by the sales tax authorities is only a civil liability, th9ugh penal in character. It may be relevant to notice that subsection (2-A) of sectioi;1 9 of the Act specifical]y refers to certain acts and omissions which are offences for which a ·crimina! prosecution would lie and the provisions relating to offences have not • been given retrospective effect by section ·9 of the Amending Act. The argument based on Article 20(1} of the Constitution is, there. fore, rejected. · ·:The next point to be considered is whether the imposition and collection of penalty with retrospective effect amounts to an imposition of an unreasonable restriction on the fundamental right of the petitioners to own' property and to carry on business guaranteed under Article 19(1) (f) and (g) of the Constitution.

We have already indicat~d above the circumstances under which it becomes necessary to levy pehalties with retrospective effect and to validate all the proceedings relating to levy of penalties and recovery thereof. The scope of the power of a legislature to ·make a law validating the levy of a tax or a duty retrospectively was considered by this Court 3 in Chhotabhai Jethabhai Patel & Co. v. The Union of India & Anr. ( ) The Court held that Parliament acting within its legislative field had the power and could by law both prospectively and retrospectively levy· excise duty under the Central Excises and Salt Act 1944 even where it was established. that ·by reason of the retrospectwe effect (I) [J9;0j 75 I. T. R, 741. (2) [1980] 46 S. T. C. 379. (3) [1962] Supp. 2 S. C. R. I. SHIV DUTT v. UNION (Venkataramiah, f. ) 23i being given to the law, the assessees. were incapable elf passing on the excise duty to the buyers. After considering certain American decisions, Ayyangar J. observed.

at page 37 thus : "It would thus be seen that even under the constitu· tion of the United States of America the unconstitutiona-· lity of a retrospective tax is rested on what has been --_j termed "tlie vague contours of the 5th Amendment. Whereas under the Indian Constitution that grounds on which infraction of the rights to property is to be tested not by the flexible rule of "due process" but on the more precise criteria set out in Art. 19(5). Mere retrospectivity in the imposition of the tax cannot per se render the Law unconstitutional on the ground of its infringing the right to hold property under Art. 19(l)(f) or depriving the person of property under Art. 31(1). If on the one hand, the tax enactment in question were beyond legislative competence of the Union or a State necessarily different considerations arise. . Such unauthorised imposition would. undoubtedly riot be a reasonable restriction on the right to hold property besides being an unreasonable .

restraint on the carrying on of business, if the tax in question is one which is laid on a person in . respect of bis business activity. " 'E The Court was more emphatic "in Rai Ramkrishan & Ors. v. 1 The State of Bihar( ) about the power of the legislature in India to enact retrospective taxation laws. It held that if in its essential features a taxing statute is within the competence of the Legislature, it would not cease to be so if retrospective effect is given to it. A power to make a law, therefore, includes within its scope to make all relevant provisions which are ancillary or incidental to it. The provision for levying of interest and to levy penalties retrospectively and to validate earlier proceedings under laws which ,have been declared unconstitutional after removing the clement of unconstitutionality is included within the scope of legislative power. In the above mentioned case of Rai Ramkrishna·& Ors.

(supra), a Bibar Act levying a tax on ~assengers and good~ passed in 1950 was declared to be u. nconstitut1onal by thJS Court m December, 1960. An Act validating the said levy after removing constitutional deficiencies in it was passed with (I) [1964] I S. C. R. 897, 232 SUPREME COURT REPOR'tS t19! \3l ~ s. c. R.. the assent of the President in ,September 23, 1961 and thl! t Act was . A given retrospective effect from April 1, 1950 on which date the earlier Act which had been declared as unconstitutional had come into force. The limited challenge mounted against the. validating Act was that the provisions contained in section 23(b) thereof which provided that any proceeding commenced or purported to have been conimenced for the assessment, collection and recovery of any amount as tax or penalty under the provisions of the earlier Act which had been declared as unconstitutional or the rules made ihereunder during the period from April 1, 1950 to July 31, 1961 i. e.

till the date on which an Ordinance which was replaced by the validating Act in question came into force, should be deemed to have been commenced and conducted in accordance with the provisions of the validating . Act and ·if not alroady completed should be continued and completed in accordance with the validating Act was opposed to Article 304(b) and Article 19(l)(f) and. (g). H was urged in that case on the basis of the observation made in Sutherland on 'Statutes and Statutory Constructions' to the effect that : "Tax statutes may be retrospective if the legislature clearly so intends. If the retrospective feature of a law is arbitrary and burdensome the statute will not be sustained" that the length of retrospectivity, that is, eleven years was an un• ,-. reasonable restriction on the rights guaranteed under Artide 19(I)(f) (g).

This contention was rejected by this Court at pages 915 and 916 of the Report as follows : •'We do not think that such a mechanical test c:an be applied in determining the validity of the retrospective operation of the Act. It is conceivable that casei may arise in which the retrospective operation of a taxing or other statute may introduce such an element of unreason· ableness that the restrictions imposed by it may be open to serious challenge as unconstitutional; but. the test of the length of time covered by the retrospective op•~ration cannot, by itself, necessarily be a decisive test. We may have a statute whose retrospective operation covers a comparatively short period and yet it is possible that the nature of the restriction imposed by it may be of such a character as . to _introduce a serious infirmity in the sHiv DUTT v. UNION (Venkataramiah, J. ) . ~33 retrospective operation.

On the other hand, we may get cases where the period covered by the retrospective operation of the statute, though long, will not introduce any such infirmity. Take the case of a Validating Act. If a statute passed by the legislature is challenged in proceedings before a court, and the challenge is ultimately sustained and the statute is struck down, it is not unlikely that the judicial proceedings may occupy a fairly long period and the legislature may well decide to await the final decision in the said proceedings ·before it uses its legislative power to cure the alleged infirmity in the earlier Act. In such a case, if after the final judicial verdict is pronounced in the matter the legislature passes ·C a validating Act, it may well cover a long period taken by the judicial proceedings in Court and yet it would be . inappropriate to hold that because· the retrpspective operation covers a long period, therefore, the restriction imposed by it is unreasonable.

That ii why we think the test of the length of time covered by the retrospective operation cannot by itself be treated as a decisive test. Take the present case. The earlier Act was passed in 1950 and came into force on April 1, 1950, and the tax imposed by it was being collected until an order of injunction was passed in the two suits to which we have already referred. The said suits were dismissed on May 8, 1952, but the appeals preferred by the appellants were pending. in this Court until December 12, 1960. ln other words, between 1950 and 1960 proceedings were pending ·in Courl in which tbe · validity of the Act was being examined and if a Validating Act had to be passed, the legislature cannot be blamed for having awaited the final decision of this Court in the said proceedings.

Thus the period covered between the institution of the said two suits and their final disposal by this Court cannot be pressed into service for challenging the reasonableness of the retrospective operation of the Act. " In the instant case, the facts are one shade better. There is no dispute in this case about the validity of the tax payable under the Act during the period between January I, 1957 and the date of commencement of the Amending Act. It has to. be presumed that ! • all the tax has been collected by the dealers from their customers. There is also no dispute that the law required' the dealers to pay the tax within the specified time. The dealers had also the knowlflge of the provisions relating to penalties in the general sales tax laws of their respective States. It was only owing to the deficiency in the Act pointed out by this Court in Khemka's case· (supra) the penalties became not payable. In ·this situation, where the dealers.

have utilised the money which should have been paid to the Government . ' and have comr'nitted default in performing their duty, if Parliament ~calls upon them to pay penalties in accordance with the law as amended with retrospective 'effect it cannot be said that thf:re has . been any unreasonable restriction imposed on the rights guaranteed c. under Article 19(1) (f) and (g) of the Constitution, even though the period of retrospectivity is nearly ninteen years. It is also pertinent to refer here to sub-section (3) of section 9 of the Amending Act which. provides that the provisions contained in sub-section (2) thereof would not prevent a person from questioning the imposition or collection of any penalty or any proceeding, act or thing in connection therewith or:for claiming-any refund in accordance with the Act as amended by the Amending Act read with sub-section (I) of section 9 of the Amending Act. Explanation to su.

b-section (3) to section 9 of the Amending Act also provides for exclusion of the period between February 27, 1975 i. e. the date on which the judg- ·ment in Khemka's case (supra) was delivered upto the date of the commencement cif the Amending Act in computing the period of 1imitation for questioning any order levying penalty. In those proceedings the authorities concerned are sure to consider all aspects of the case before passing orders levying penalties. The contention that the impugned provision is violative of Article 19(1J(f1 and (g) of the Constitution has, therefore, to be rejected. The next contention relates to the validity of· section 48 of the Haryana General Sales Tax Act, 1973 (Act No. 20 of 1973). It reads: "48. Failure to maintain correct accounts and· to furnish correct returns.

-If a dealer has maintained false or incorrect accounts with a view to suppressing his sales, purchases or stocks of goods, or has concealed any particulars of his sales, 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 particnlar, the • SHIV DUTT v. UNION (Venkataramiah, J. ) . Commissioner or any person appointed to assist him under sub-section (I) 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 any tax payable by him, a sum not Jess than twice and more than ten times the amount of tax which would have been avoided' if the turnover returned by such dealer had been accepted as correct and where no tax is payable a sum not ress than one hundred rupees but not exceeding one thousand rupees.

" The argument urged on behalf of the dealers in the State of Haryana is thlt this section which authorises the levy of penalty at 'a sum of not less than twice and more than ten times the amount of tax' on proof of the defaults mentioned therein is violative of Article 14 as there is no guidance given to the authority levying the penalty aboui the quantum of penalty. There is no substance in this plea. The provision in question itself suggests that the levy to be made under it is in the nature of a penalty which requires the authority . concerned to apply his mind to all relevant aspects of the default alleged to have been committed by a dealer. First the default committed by the dealer should be established at an· enquiry after giving the dealer concerned an opportunity of being heard. The degree of remissness involved in the default is a relevant factor to be taken into account while levying penalty.

The section provides both the minimum and the maximum amount of penalty leviable and it is correlated to the amount of tax which would have been avoided if the turnover returned by such dealer had been accepted as correct. The order levying penalty is quasi judicial in character and involves exercise of judicial discretion. The considerations which should weigh with the authorities while imposing penalty are well known and have been settled by many decisions. Hindustan Steel Ltd. v. 1 State of Orissa( ) is one such deCision. An order levying penalty under section 48 of the Haryana General Sales Tax Act is also subject to the provisions relating to appeal, etc. set out in Chapter VII thereof. In the circumstances, it. is not possible to hold that section 48 of the Haryana General Sales Tax Act, 1973 confers an · uncanalised,"unguided and arbitrary . power on the authority lev)ing "penalty. This contention should, therefore, fail. (I) ! 191011 s. c. R, 753. , In Writ Petition No.

7220 of 1982 it was 'faintly suggested that the order of penalty had been passed by an authority not authorised by law. We find from the record that the said order is passed by the Assessing Authority-cum-Excise and Taxation Officer, Hissar authorised by the State Government apparently under section 2(a) read with section 3 of the Haryana General Sales Tax Act, 1973 and Rule 4(1) oft4e Haryana General Sales Tax Rules, 1975. We do not find any substance in this contention too. In the result these petitions fail and they are. dismissed. In the circumstances· of these cases, there will be no order as to <:osts. H. S. K. Petiti1ms dismissed.