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. 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 subsection (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 gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said. The courts cannot aid the legislatures’ defective phrasing of an Act; they cannot add or mend, and by construction make up deficiencies which are left there. [Para 6.11][501-E-H; 502-A]
3. On strict interpretation of Section 45 and Section 47 of the Act, 1969, the only conclusion would be that the penalty and interest leviable under Section 45 and 47(4A) of the Act, 1969 are statutory and mandatory and there is no discretion vested in the Commissioner/Assessing Officer to levy or not to levy the penalty and interest other than as mentioned in Section 45(6) and Section 47 of the Act, 1969. It is needless to observe that such an interpretation has been made having regard to the tenor of Sections 45 and 47 of the Act, 1969 and the language used therein. [Para 6.12][502-B-C]
Chairman, SEBI v. Shriram Mutual Fund and Anr. (2006) 5 SCC 361; Competition Commission of India v. Thomas Cook (India) Limited and Anr. (2018) 6 SCC
549 – relied on.
Union of India and Ors. v. Dharamendra Textile Processors and Ors. (2008) 13 SCC 369 : [2008] 14 SCR 13; Commissioner of Central Excise, Chandigarh v. Pepsi Foods Ltd. (2011) 1 SCC 601 : [2010] 14 SCR 836; Brooke Bond India Limited v. State of Gujarat; 1998 JX (Guj) 128 – held inapplicable.
Hindustan Steel Ltd. v. State of Orissa; (1969) 2 SCC
627 : [1970] 1 SCR 753; State of Gujarat v. Arcelor Mittal Nippon Steel India Limited; (2022) 6 SCC 459; Guljag Industries v. Commercial Taxes Officer (2007)
7 SCC 269; J. K. Cotton Spg. and Wvg. Mills Co. Ltd. v. CCE; (1998) 3 SCC 540 : [1998] 2 SCR 102; BHEL v. Mahendra Prasad Jakhmola; (2019) 13 SCC 82 : [2019] 4 SCR 504; Elecon Engineering Vs. State of Gujarat (1994) 93 STC 397; Director of Elementary Education v. Pramod Kumar Sahoo (2019) 10 SCC 674; Nandlal Wasudeo Badwaik v. Lata Nandlal Badwaik; (2014) 2 SCC 576 : [2014] 1 SCR 120; Bhuwalka Steel Industries Ltd. v. Union of India; (2017) 5 SCC 598 : [2017] 2 SCR 993; State of M.P. v. Bharat Heavy Electricals (1997) 7 SCC 1 : [1997] 3 Suppl. SCR 435; Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax, Indore and Ors. 1980 (6) ELT 295 (S.C.) – referred to.
Riddhi Siddhi Gluco Biols Ltd. v. State of Gujarat (2017)
100 VST 305 (Guj); State of Gujarat v. Oil and Natural Gas Corporation Limited (2017) 97 VST 506 (Guj); Jyoti Overseas P. Ltd. v. State of Gujarat; 2017 SCC Online Guj 2511 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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