STATE OF RAJASTHAN AND OTHERS versus GHASILAL

Citation: [1965] 2 S.C.R. 805 · Decided: 21-01-1965 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
STATE OF RAJASTHAN AND OTHERS 
v. 
GHASILAL 
January 21, 1965 
B 
[K. N. WANCHOO, M. HIDAYATULLAH, J.C. S~. 
J. R. MUDHOLKAR AND S. M. SIKRI JJ.] 
Ra;asthan Sales Tax Act, 1955, ss. 7(2), 16(1)(b) and Raiasthan Sale~ 
Tax Rules, r. 31-Scope of. 
On a petition of the assessee challenging the validity of Rajasthan 
Sales Tax Rules, the High Court passed an interim order that the assessee 
C 
would keep proper accounts and file the prescribed returns, but that 
he should not be assessed till further orders. 
While the petition was 
pending an ordinance was promulgated validating the rules, 
and the 
assessee withdrew the petition. 
The sales tax officer sent a show cause 
notic~ and the assessee filed the return ao<I deposited tai. 
The Sales 
Tax Officer assessed tax and imposed a penalty under s. 16(1)(b) of 
the Act and justified and imposition on the ground that the High Court 
D 
did not say that the assessee was allowed to withhold the tax, but that 
on the contrary the order of the High Court showed that the assessee 
should have filed returns in time and according to s. 7(2) of the Act 
the Treasury challan of the deposit should have accompanied them. TM 
ruisessee's appeal to the Deputy Commissioner of Sales Tax (Appeals) 
was dismissed. 
The Sales-tax Officer, for a subsequent period, imposed 
another penalty on the same grounds. 
The assessee filed two writ peti-
tions in the High Court which were allowed. In appeal 
E 
HELD: (i) There had been no breach of s. 16(l)(b) of the Act, 
F 
G 
H 
and consequently the orders imposing the penalties could not be sus-
tained. [809 H] 
Till the tax payable was ascertained by the assessing authority under 
s. 10, or by the assessee under s. 7(2), no tax could be said to be due 
withins. 16(1)(b) of the Act, for, till then there was only a liability to 
be assessed to tax. [810 B.(;] 
Rule 31 of the Rajasthao Sales Tax Rules comes into the picture 
only when an assessment has been completed. [81 () D] 
(ii) Section 7(2) of the Act could not be attracted till the assessee 
filed the returns. [810 F] 
CML APPELLATE JURISDICTION: Civil Appeals Nos. 408-409 
of 1964. 
Appeal by special leave from the judgment and order dated. 
February 5, 1963 of the Rajasthan High Court in D.B. Civil Writ 
Petitions Nos. 172 and 111 of 1961. 
G. C. Kasliwal, Advocate-General, for the State of Ra;asthan, 
K. K. Jain and R. N. Sachthey, for the appellant. 
R. K. Garg, S. C. Agarwala, D. P. Singh and M. K. Rtul'Ur 
murthi, for the respondent. 
( 
I 
I 
I 
806 
SUPREME COURT REPORTS 
[ 1965( 2 S.C.R. 
The Judgment of the Court was delivered by 
Sikri, J. These two appeals by special leave are directed 
against the judgment of the Rajasthan High Court allowing Civil 
Writ Petitions Nos. 111 and 172 of 1961, and quashing orders 
A 
of the Sales Tax authorities imposing penalties on the respondent, 
Ghasilal, for delay in payment of tax due. The High Court came 
B 
to the conclusion that the penalties had been imposed in violation 
of Art. 20(1) of the Constitution, but it is not necessary to deal 
with this question because we are inclined to accept the conten-
tion raised by the learned counsel for· the respondent, Mr. Garg, 
that the penalties have been imposed in violation of the relevant 
statutory provisions. 
C 
The relevant facts are these. On March 28, 1955, Rajasthan 
Sales Tax Rules (hereinafter referred to as the Rules) were pub-
lished in the Rajasthan 'Gazette. 
The Rajasthan Sales Tax Act 
(hereinafter referred to as the Act) came into force on April 1, 
1955. The respondent filed Civil Writ Petition, No. 11 of 1958, D 
in the High Court challenging the making of assessments on the 
turnover of the respondent for the year 1955-56 on the ground 
that the said Rules were invalid. On January 9, 1958, the High 
Coµrt passed an interim order that 'the petitioner will keep proper 
accounts and file the prescribed returns but he shall not be assessed 
till further orders'. While the petition was pending in the High E 
Court, an Ordinance (No. 5 of 1959) was promulgated on Novem-
ber 6, 19 5 9, validating the Rules. 
Thereupon the respondent 
withdrew Writ Petition No. 11of1958. On December 17, 1959 
the Rajasthan Sales Tax Validation Act (Rajasthan Act 43 of 
1959) replaced the Ordinance. It is common ground that the 
effect of the said Ordinance and the said Act was to validate the F 
Rules, even if any defect existed in the making of the Rules. We 
may mention that according to the app

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