Kania, J.
1. This is a reference purported to be made, under section 34(1) of the Bombay Sales Tax Act, 1953, (hereinafter referred to as 'the said Act') at the instance of the Commissioner of Sales Tax.
2. The facts giving rise to this reference are as follows :
The respondents were a registered dealer under the said Act. In respect of the assessment period from 1-4-1954 to 31-3-1956 the respondents were assessed by the Sales Tax Officer in respect of the tax payable by them under the said Act and demand notices were issued against them on 30-11-57. These demand notices determined the respondent's liability to pay tax at Rs. 7,923.28. The respondents preferred an appeal against this assessment to the Assistant Commissioner of Sales Tax and thereafter filed a revision application before the Deputy Commissioner of Sales Tax. In both these proceedings the respondents failed. The respondents then went by way of further revision before the Sales Tax Tribunal but there also their application met with the same fate and was dismissed. All this was prior to 7th August, 1959. By 7th August, 1959 the respondents had deposited the full amount of tax of Rs. 7,923.28 in instalments as directed by the Collector of Bombay in recovery proceedings. After the papers went back to the lower authorities, on 11th September, the Sales Tax Officer issued a demand notice in Form XVII directing the respondents to pay the penalty set out therein under section 16(4) of the said Act for late payment of tax. The respondents preferred an appeal against this order of the Sales Tax Officer to the Assistant Commissioner of Sales Tax who dismissed the same. The respondents then went in revision before the Deputy Commissioner of Sales Tax who reduced the penalty but declined tos et aside the same. The respondents then went by way of further revision that on a roper construction of the provisions of section 16(4) of the said Act and in particular the proviso thereto once the respondents had filed an appeal or a revision application, the Sales Tax Officer no longer had any authority or jurisdiction to impose any penalty under section 16(4) of the said Act and that the said power could thereafter only be exercised by the superior authorities. Arising from the judgment and order of the Tribunal the following question has been referred to us for our determination :
'Whether on the facts and in the circumstances of the case, the Sales Tax Officer had acted without Jurisdiction in issuing the notice Form XVII for levy of the penalty under section 16(4) of the Bombay Sales Tax Act, 1953, in respect of the tax not paid in time, after the appellate and revisional authorities had passed their respective orders ?'
3. At the outset, Mr. Patil, learned counsel for the respondents, raised a preliminary objection to the maintainability of the reference. It was submitted by him that the impugned order of the Tribunal did not affect any liability of the respondents to pay the tax under the said Act but related merely to the liability of the respondents to pay a penalty and hence no reference could be made to this Court under section 34 (1) of the said Act. In order to appreciate this contention, it is desirable to set out the provisions of section 34(1) of the said Act at this stage :
'34 (1). Within ninety days from the passing by the Tribunal of any order under sub-section (2) of section 30 or sub-section (1) of section 31 affecting any liability of any person to pay the tax, such person or the Collector by any person (other than the Collector by a fee of one hundred rupees, require the Tribunal to refer to the High Court any question of law arising out of such order, and where the Tribunal agrees it shall drew up a statement of the case and refer it to the High Court.'
Certain other relevant provisions of the said Act may also be conveniently noticed at this stage. Clause (18) of section 2 of the said Act as it read prior to 7-4-1957 defined the word 'tax' thus :
'tax means the sales tax, general sales tax, purchase tax or outside goods purchase tax payable under this Act.'
From 7-4-1957 the said clause read thus :
''tax' means sales tax, general sales tax or purchase tax payable under this Act.'
The opening part of section 2 makes it clear that this definition is applicable unless there is anything repugnant in the subject or context. Sub-section (4) of section 16 of the said Act reads thus :
'(4) If the tax is not paid by dealer with the prescribed time, the dealer shall pay, by way of penalty in addition to the amount of tax, a sum equal to -
(i) one per cent. of the amount of tax for each month for the first three months after the expiry of the prescribed time and
(ii) two and one-half per cent. for each month subsequent to the three months as aforesaid,
during which he continues to make default in the payment of the tax :
Provided that where the tax has not been paid by any dealer within the prescribed time but the dealer has filed an appeal or an application for revision in respect of such tax, the authority hearing the appeal or the application for revision may direct that the penalty in respect of any period shall be paid at such rate as it may think fit, the rate being not less than one per cent. and mere than two and one-half per cent. of the amount of tax for each month :
Provided further that the Collector, may, subject to such conditions as may be prescribed remit the whole or part of the amount of the penalty payable by a dealer in respect of any period under this sub-section.'
4. The question which really arises for our consideration in determining the preliminary objection urged by Mr. Patil is whether the word 'tax' used in section 34 (1) of the said Act includes a penalty levied under section 16(4) of the said Act. In connection with this question, it significant to note that the definition of the term 'tax' in the said Act, to which we have already referred, is an exclusive definition and that definition no where refers to any penalty. This definition, therefore, shows that a penalty levied under the said Act is not to be included in the term 'tax' unless there is something repugnant in the context or subject-matter. Quite apart from this, it is also significant that in section 16(4) of the said Act itself, the word 'penalty' has been used distinctly from the word 'tax'. Even the opening part of sub-section (4) states that in the circumstances mentioned in that sub-section mentioned in that sub-section, a dealer shall pay by way of penalty to sub-section (4) of section 16 also uses the word 'tax' and the word 'penalty' distinctly or separately. The second proviso shows that the power of the Collector to remit only relates to the amount of the penalty payable by a dealer and not the amount of tax, which would also suggest that the two terms are used in different senses. The provisions pertaining to the incidence and levy of tax under the said Act are contained in Chapter III, whereas the provisions to penalty are mostly contained in Chapter V which deals with the topics of returns, assessment, payment, recovery, composition and refund of tax. These two terms have been used in distinct senses also in clause (iii) of sub-section (2). of section 48, clause (iii) of sub-section (1) of section 49 and clause (ii) of sub-section (2) of section 50 of the said Act. These provisions, in our view, make it clear that the term 'tax' has been used in the said Act in a distinct or different sense from the one conveyed by the term 'penalty' in the said Act. In view of this it appears to us that there is nothing in the context or subject-matter which requires that the terms 'tax' in section 34(1) should be given any other meaning than the one contained in clause (18) of section 2 of the said Act, which excludes penalty from the ambit of the term 'tax' in so far as a penalty levied under the provisions of section 16(4) is concerned. Some support for this view, ... ... which we are inclined to take, is found from the decision of the Supreme Court in Khemka & Co. vs. State of Maharashtra 35 S.T.C. 571. There the question was whether the assessee under the Central Sales Tax Act, 1956, could be made liable to pay a penalty under the provisions of the said Act viz., The Bombay Sales Tax Act, 1953. It has been held by the majority decision of the Supreme Court that there is no provision in the Central Sales Tax Act, 1956, for the imposition of the penalty for delay or default in payment of tax and the provision in the State Sales Tax Act, imposing penalty for non-payment tax within the prescribed time is not attracted to impose penalty on dealers under the Central Act in respect of tax payable under the Central Act. In connection with this question, Supreme Court has observed as follows (page 581) :
'Penalty is not merely sanction. It is not merely adjunct to assessment. It is not merely consequential to assessment. It is not merely machinery. Penalty is in addition to tax and is a liability under the Act.'
Moreover, it has to be noticed that this was the view taken by the Supreme Court, although the term 'tax' is not defined in the Central Sales Tax Act, 1956, whereas in the case before us the term 'tax' has been defined under the said Act and the definition of that term excludes penalty from its ambit.
5. It was submitted by Mr. Bhabha, learned counsel for the Department, that the jurisdiction of this Court under section 34(1) of the said Act is an advisory jurisdiction and that we should give a liberal construction to the word 'tax' used in section 34(1) so as to advance the remedy provided by that sub-section. All these considerations referred to by Mr. Bhabha may very well be generally correct. But, these considerations cannot enable us to overlook the plain language of sub-section (1) of section 34 of to stretch the construction thereof beyond permissible limits. As we have already discussed, in our opinion, the word 'tax' has been used by the Legislature in the said Act in a sense distinct form the sense in which the term 'penalty' has been used and it is not open to us merely on such general considerations as advanced by Mr. Bhabha to unduly enlarge the meaning of the term 'tax' used in the said sub-section so as to include within its ambit a penalty levied under section 16(4) of the said Act. It was submitted by Mr. Bhabha that the penalty under section 16(4) of the said Act is inherently connected with the payment of tax in the sense that it is late payment of the tax which led to the liability of an assessee to pay the penalty, and hence, a penalty levied under section 16(4) should be included within the meaning of the terms 'tax' used in section 34(1) of the said Act. In our view, this submission must also be rejected. Merely because the liability to the penalty arises by reason of the payment of tax, it does not mean that there is such inherent connection between the penalty and the tax that one should be deemed to include the other. The provisions of section 16(4) of the said Act merely show that the liability to pay a penalty is a consequence which might follow upon the late payment of tax. But, this in no way indicates that the term 'tax' includes a penalty levied under section 16(4).
6. Mr. Bhabha placed strong reliance on the decision of a Division Bench of the Punjab and Haryana High Court in Charanjit Lal Des Raj vs. Sales Tax Tribunal 33 STC 271, where it has been held that the word 'tax' used in section 22(1) of the Punjab General Sales Tax Act, 1948, includes both the tax assessed and the penalty imposed and, therefore, a reference on a question of law arising out of the order of the Sales Tax Tribunal imposing a penalty can be made under that section to the High Court. In our view, this decision is not very helpful in the determination of the question before us, because there was no definition of the term 'tax' contained in the Punjab General Sales Tax Act, 1948, with which the Division Bench of that High Court was concerned in that case, whereas in the present case the term 'tax' has been defined in the said Act with which we concerned. Moreover, in view of the decisions of the Supreme Court in Khemka & Co. vs. State of Maharashtra, referred to earlier, the authority of the aforesaid decision of the Division Bench of the Punjab and Haryana High Court has been considerably watered down.
7. Mr. Bhabha next referred us to the decision of a Division Bench of the Gujarat High Court in Viswa & Co. vs. State of Gujarat 17 STC 581. In that case, there was a composite order under which there was an imposition of tax and a levy of penalty. This order was passed by the Sales Tax Officer and was upheld by the by the appellate authorities and the revisional authority including the Tribunal. A reference was made to the High Court under section 34(1) of the said Act from this order. A preliminary objection was taken to the maintainability of the reference and that objection was repelled by the Division Bench. This decision also is of no assistance in the determination of the question before us, because in that case, the order from which the reference arose was one which affected the liability of the assessees to pay the that as well as a penalty, and hence the provisions of section 34(1) of the said Act were clearly attracted. In fact, what the learned Judges of the Gujarat High Court have observed is as follows (page 590) :
'..... What the section 34(1) require is that the order of the Tribunal in respect of which the reference application is made must be an order affecting any liability of any person to pay the tax. Once there is such an order, then any question of law arising out of such order can be referred by the Tribunal to the High Court.'
It is true that the learned Judges in the above case have raised some doubt as to whether an order imposing penalty can be regarded as an order affecting the liability to pay tax on the ground that a penalty is in the nature of an additional tax, but that question has not been determined not are there any observations in the judgment which would suggest as to what was the view of the Division Bench regarding that question. Hence, this decision also is of no assistance to Mr. Bhabha in his contention before us.
8. In our view, for the reasons which we have already given the present reference is not maintainable under the provisions of section 34(1) of the said Act, under which it purports to have been made. We accordingly decline to answer the question referred to us and return the reference to the Tribunal. In view of the fact that the assessees had not raised this point before the Tribunal. In view of the fact that the assessee had not raised this point before the Tribunal, on which point they have succeeded before us, there will be no order as to the costs of this reference.