STATE OF GUJARAT AND ANR. versus M/S. SAW PIPES LTD.

Citation: [2023] 6 S.C.R. 479 · Decided: 17-04-2023 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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STATE OF GUJARAT AND ANR.
v.
M/s. SAW PIPES LTD.
(Civil Appeal No. 3481 of 2022)
APRIL 17, 2023
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Gujarat Sales Tax Act, 1969 – s. 55A, 45, and 47 –
Respondent-assessee was engaged in business of executing
indivisible works of undertaking contract of coal tar and enamel
coating on pipes – Respondent deposited tax at rate of 2%, however,
the Assessing Officer (AO) held that the composition amount was
not payable at the rate of 2% as deposited but it fell under residuary
entry-8 to the notification dated 18.10.1993 – Demand of difference
in tax as well as the levy of interest u/s.47(4A) and penalty u/s.
45(6) of the Act, 1969 was made – By the impugned judgment and
order, the High Court has set aside the penalty and interest levied
u/s.45(6) and s.47(4A) of the Act, 1969 on the ground that the
respondent-assessee was under the bonafide opinion and paid tax
at 2% and that thereafter, when the enhanced tax as imposed was
paid by the assessee, the penalty and interest was not required to be
paid by the assessee – Issue before the Supreme Court: Whether
while levying penalty and interest leviable u/s 45(6) and s. 47(4A)
mens rea on the part of the assessee is required to be considered –
Held: The language used in s.45 is precise, plain and unambiguous
that the moment any eventuality as mentioned in s. 45(5) occurs,
the penalty shall be leviable as mentioned in s. 45(6) – There is no
question of considering any mens rea on the part of the assessee –
The language employed in a statute is the determinative factor of
legislative intent – The Court cannot read anything into a statutory
provision which is plain and unambiguous – On strict interpretation
of s. 45 and s. 47, the only conclusion would be that the penalty
and interest leviable u/ss. 45 and 47(4A) are statutory and mandatory
and there is no discretion vested in the Assessing Officer to levy or
not to levy the penalty and interest other than as mentioned in s.
45(6) and s. 47 – Judgment of High Court set aside.
[2023] 6 S.C.R. 479
479
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SUPREME COURT REPORTS
[2023] 6 S.C.R.
Allowing the appeal, the Court
HELD:1. From the language of Section 45(6) of the Act, it
can be seen that the penalty leviable under the said provision is
a statutory penalty. The phrase used is “shall be levied.” The
moment it is found that a dealer is deemed to have failed to pay
the tax to the extent mentioned in sub-section (5) of Section 45,
there shall be levied on such dealer a penalty not exceeding one
and one-half times the difference referred to in sub-section (5).
As per sub-section (5), where in the case of a dealer the amount
of tax assessed or re-assessed exceeds the amount of tax already
paid by the dealer in respect of such period by more than 25% of
the amount of tax so paid, the dealer shall be deemed to have
failed to pay the tax to the extent of the difference between the
amount so assessed or re-assessed and the amount paid.
Therefore, the moment it is found that a dealer is to be deemed
to have failed to pay the tax to the extent mentioned in sub-section
(5), the penalty is automatic. Further, there is no discretion with
the assessing officer either to levy or not to levy and/or to levy
any penalty lesser than what is prescribed/mentioned in Section
45(6) of the Act, 1969. In that view of the matter, there is no
question of considering any mens rea on the part of the assessee/
dealer. [Para 6.4][495-G-H; 496-A-C]
2. The word used in Section 45(6) is “shall be levied”. The
dealer shall be liable to pay the penalty not exceeding one and
one-half times of the difference of the tax as mentioned in sub-
section (5) of Section 45 of the Act, 1969. The language used in
Section 45 is precise, plain and unambiguous. The intention of
the legislature is very clear and unambiguous that the moment
any eventuality as mentioned in Section 45(5) occurs, the penalty
shall be leviable as mentioned in sub-section (6) of Section 45.
No other word like mens rea and/or satisfaction of the assessing
officer and/or other language is used like in Section 11AC of the
Central Excise Act. It is a well settled principle in law that the
Court cannot read anything into a statutory provision which is
plain and unambiguous. A statute is an edict of the legislature.
The language employed in a statute is the determinative factor
of legislative intent. As per the settled position of law, the intention
of the legislature is primarily to be

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