Indian Coffee Workers Co-Operative Society Limited vs Deputy Commercial Tax Officer and Others

K. Raviraja Pandian, J.—The petitioner is a co-operative society running a canteen for selling food and drinks. The petitioner seems to have

applied to the Government for granting exemption from sales tax in respect of the sales turnover for food and drinks in the said canteen. As a

matter of fact, such an exemption has also been granted by the Government in G.O.P. No. 669 CT & RE dated November 21, 1990 in

Notification No. 11(1)/CTRE/205/90 Gazette dated December 5, 1990 with effect from April 1, 1990 with reference to Thiruvalargal Indian

Coffee Worker''s Co-operative Society Limited, Pondicherry, on the sale of food and drinks in their branches in the State of Tamil Nadu by

exercising the power conferred u/s 17(1) of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as ""the Act"").

In respect of the assessment year 1989-90, as the application for exemption u/s 17 of the Act is pending before the Government, the assessee

has not paid the tax. However, subsequently tax amount has been paid. In view of the belated payment of tax under the sales turnover of food and

drinks by the assessee, the first respondent levied penalty in a sum of Rs. 3,58,537 u/s 12(5)(iii) of the TNGST Act. The petitioner thereafter filed

an application u/s 16B of the TNGST Act for waiver of penalty imposed to the Commissioner to whom the power was vested. The Commissioner

by his order dated January 3, 2003 has rejected the application on the ground that the assessee has not fulfilled the condition prescribed u/s 16B of

the Act. That order was carried on in original petition before the Taxation Special Tribunal. The Special Tribunal, however, declined to interfere

with the order. Hence, the present writ petition.

We heard the learned Counsel for the petitioner as well as the learned Special Government Pleader.

On a reading of the order dated January 3, 2003 we are of the view that the order is per se a non-speaking order. Section 16(B) of the TNGST

Act empowers the authorities to reduce or waive the penalty in certain cases. It is rather apt to quote the provision 16B, which reads as follows:

16B. Power to reduce or waive penalty in certain cases.--(1) Notwithstanding anything contained in Sub-section (3) of Section 12 or Sub-section

(2) of Section 16, the Commissioner of Commercial Taxes may, in his discretion, whether on his own motion or otherwise, reduce or waive the

amount of penalty imposed or imposable on a dealer, if he is satisfied that such dealer has-

(a) voluntarily and in good faith made full and true disclosure of his turnover prior to the detection by any officer of the Commercial Taxes

Department;

(b) co-operated in any inquiry relating to the assessment of such turnover; and

(c) either paid or made satisfactory arrangements for the payment of any tax or any other amount payable in consequence of an order passed

under this Act in respect of the relevant assessment year.

(2) Every order made under Sub-section (1) shall be final and shall not be called into question by any other authority.

From the order of the Commissioner it is clear that the Commissioner has come to the conclusion that the condition for exercise of such power

is not existed in the case of the petitioner and stated that the 16B condition has not been complied with in a cryptic manner. It has not been stated

that in what way the condition has not been complied with. As already stated the petitioner is a co-operative society and applied for exemption

from payment of tax in respect of sale of food and drinks in its canteen and the Government, also considering the case, granted the exemption from

April 1, 1990. Hence it presupposes that the petitioner''s application for granting of exemption from payment of tax in respect of sale of food and

drinks ought to have been pending before the Government during the relevant assessment year in which the petitioner was levied penalty.

It is not the case of the respondent that the petitioner has not filed the returns by disclosing the sales turnover. On the contrary the sales turnover

has been disclosed, but the tax amount has not been paid on the fond hope and in good faith that an order would be passed immediately. But, as

usual the Government has passed the order only after an year on November 21, 1990 however with retrospective effect from April 1,1990.

Hence, we are of the prima facie view that the condition contemplated for considering the case of the petitioner for reduction or waiver of penalty

has not been considered in the correct perspective in the case of the petitioner. In fact the respondent, in a non-speaking order, has just rejected

the request of the petitioner for reduction or waiver. The action of the respondent is not in conformity with the established legal principles of law

that whenever an order is passed, the order must be supported with a reason for coming to such a conclusion. The discretion conferred on the

Commissioner has to be exercised in a judicial manner on satisfying the conditions contemplated therein. The provision is incorporated in the

statute only to exercise the same and not to put the same just ornamental to the statute. It is a settled law that ""If a statute invests a public officer

with authority to do an act in a specified set of circumstances, it is his duty to exercise that power which is invested in aid of enforcement of a right

as held in L.Ar. Arunachalam Pillai and Sons Vs. State of Tamil Nadu, .

We, therefore, constrained to set aside the order, however remit the same to the respondent/Commissioner to consider the matter afresh with a

direction to the respondent to dispose of the petition dated March 18, 2002 of the petitioner in accordance with law by a speaking order within a

period of 8 weeks from the date of receipt of a copy of this order. With this observation, the writ petition is disposed of. No costs. Consequently,

W.P.M.P. No. 20823 of 2003 is closed.