ORDER
Bishambhar Dayal, C.J.
1. This is a petition by Sardar Mahinder Singh who was doing the work of repairing and building bodies on customers' chassis. He had not registered himself as a dealer under a bona fide belief that he was not a dealer at all and that he was merely doing contract works. Proceedings were, however, started against the petitioner for assessment under the M. P. General Sales Tax Act for periods from 1st January, 1963, to 31st December, 1963, and 1st January, 1964, to 3rd November, 1966. The petitioner contested his liability as a dealer. Ultimately, his plea was rejected by the Sales Tax Officer and in his appeal against the first period it was held that he was liable to be registered as a dealer. This appeal was decided by order dated 29th August, 1966, which was served on the petitioner on 8th September, 1966. On this date, according to the petitioner, the matter having been finally decided, he applied for registration on 1st November, 1966, and was soon registered as a dealer. However, the petitioner was assessed to sales tax and the Sales Tax Officer after assessment for the second period imposed a penalty on him of Rs. 22,500. But on revision the Deputy Commissioner of Sales Tax reduced the penalty to Rs. 16,000. It is against these orders imposing a penalty by the Sales Tax Officer and the reduced amount of penalty of Rs. 16,000 by the Deputy Commissioner of Sales Tax that the present writ petition has been pressed. The matter of assessment of sales tax was not pressed.
2. The contention of the learned Counsel for the petitioner is that the petitioner was not a wilful defaulter and, therefore, a penalty could not be imposed on him under Section 18(6) of the M.P. General Sales Tax Act because he bona fide believed that he was not a dealer and that he need not be registered. As soon as in appeal the point was decided against him, he got himself registered.
3. In this connection provisions of Section 15(5) and Section 18(6) are relevant. Under Section 15(5) a penalty up to Rs. 100 can be imposed on a dealer for not getting himself registered within the prescribed time 'without reasonable cause'. Under Section 18(6) if the Commissioner is satisfied that the dealer has 'wilfully failed to apply for registration', he may 'direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed, a sum not exceeding one and a half times that amount.' It will be seen that there is a difference in language between Section 15(5) and Section 18(6). Section 15(5) deals with a case where the failure of a dealer is without reasonable cause so that if there is a reasonable cause for a dealer for not getting himself registered within time, penalty cannot be imposed against him. There the maximum penalty is Rs. 100. But under Section 18(6) the penalty is one and a half times the tax which has been avoided and the penalty can be imposed if an opinion is formed that the dealer has wilfully failed to apply for registration. This necessarily means that the finding must be about the intentional avoidance of registration by the dealer in order to avoid payment of tax, and it is for that reason that the penalty here is proportionate to the tax tried to be avoided. In the present case, the penalty has been imposed under Section 18(6) of the Act. Therefore, this penalty could be imposed only if the Commissioner was satisfied that the dealer was wilfully avoiding registration in order to avoid payment of tax and that he knew fully well that he was liable to be registered as a dealer.
4. In the circumstances of the present case we think that the dealer had a bona fide cause to believe that he was not a dealer within the meaning of the Act and that he was not liable to sales tax and to be registered as a dealer under the Act. He cannot, therefore, be treated as having wilfully failed to apply for registration.
5. Learned counsel for the State contended that this is a matter of discretion with the sales tax authorities whether to accept the explanation or not to accept it. We do not agree with this contention. The jurisdiction to impose penalty arises only under the pre-existing conditions provided by the section. If those conditions do not exist, the jurisdiction to impose penalty does not arise. This being a jurisdictional fact, this Court has always the right to intervene if a Tribunal wrongly decides in favour of its having jurisdiction when it does not possess it.
6. Learned Counsel for the State also contended that the petitioner had a right of appeal and a second appeal which he did not avail and, therefore, the writ petition should not be entertained. He submitted that the matter could have been brought through a reference to this Court. That was a matter which might have been taken into consideration at the time of admitting the petition. After the petition has been admitted and this Court has found that there was no jurisdiction to impose a penalty, this Court will not reject the petition merely because of the existence of an alternative remedy and perpetuate a wrong against the petitioner. Payment of such a large sum of penalty infringes a fundamental right of the petitioner when there was no jurisdiction in the Tribunals to impose a penalty.
7. The result, therefore, is that this writ petition is allowed. The order of the Sales Tax Officer dated 16th April, 1968 (exhibit P. 2) and that of the Deputy Commissioner of Sales Tax dated 12th January, 1970 (exhibit P. 3) are quashed to the extent that they impose a penalty on the petitioner for non-registration within time. In all the circumstances of the case we direct the parties to bear their own costs. The outstanding amount of the security deposit shall be refunded to the petitioner.