# STATE OF U.P v. DYER MEAKIN BREWERIES LTD

- **Citation:** [1973] 3 S.C.R. 649
- **Court:** Supreme Court of India
- **Decided:** 1973-03-08
- **Case number:** CIVIL APPELLATE JURISDICTJON : Civil Appeals Nos. 1655 and 1656 of 1970
- **Bench:** K. S. Hegde, P. Jaganmohan Reddy, H. R. Khanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-u-p-v-dyer-meakin-breweries-ltd-5915
- **Pages:** 6

## Headnote

C•ntral Sales Tax Act, 1956, Section 10-A-A&<es.ree registei·ed ar
d•ar<r in Gaziabad-Penalty proceedings lnitiat<d against asseme-SubS<qu•nt/y, assessee's registration transferred to Luck111)w-Sales Tax Officer
had jurisdiction to impose penalty on assessee even after transfer of regis.
tration.
The assessee was registered as a dealer under the Central Sales Tax
Act, 1956. at Ghaziabad. For the relevant asses•"K!'lt years, he
was
.Ssessed by the Tax Officer at Ghaz.iabad. The Saleo Tax Officer, Ghaziabad, sub5equently came to know that the assessee had misuse<! some of
the 'C' Forms and, therefore, issued a penalty notice u/s 10-A of the Act
on January 8, 1960.
Durin11 the pendency of the penalty proceedings,
the assessee transferred his registration to Lucknow.
The Sales Tax
Officer, Ghaziabad imposed the penalty on the aasessee for the Disuse of
Form 'C'. At the instance of the assessee. the Revisional Authority uoder
the Statute referred three questions of law to High Court under section
11 (I) di the U.P. Sales Tax Act, the principal question being whether
the Sales Tax Officer, Ghaziabad, had jurisdiction to impose penalty when
the registration was transferred to Lucknow.
The High Court answered
the question against the State.
On appeals by special leave, allowing· the appeals,
HELD: Prima facie, the Sales Tax Officer, Ghaziabad was competent
to levy the penalty on the assessee.
Section 10-A definitely says that the
authority who granted the certificate of registration to an assessee ii one
of the authorities competent to levy penalty. Undoubtedly the Sales Tax
Officer, Ghaziaba<l, was the authority
who granted
the certificate of
registration to the assessee and that certificate was in force during the
relevant assessment years.
Even though after 28-3-1960, 'the date
of
transfer of registration, he ceased to be the authority competent to grant
certificate of registration to the assessee he still had the competence to
levy penalty on the assessee in view of the fact, that it was he who had
granted certificate of registration to the asaessee.
The levy of penalty is
one of levying tax.
If the Sales-tax Officer was competent to levy salestax on the assessee in re.•pect of the relevant assessment years, he was
equally competent to levy penalty on the asscssee in reapect of the offences
committed during these years. [653 DJ
CIVIL APPELLATE JURISDICTJON :
Civil Appeals Nos. 1655
and 1656 of 1970.
Appeals bv special leave from !he judgmem: and order dated
l st January 1970 of the Allahabad High Court in Sales Tax Reference Nos. 15 and 16 of 1968.
H
N. D. Karkhanis and 0. P. Rana, for the appellant.
D. P. Singh, S. C. Agarwal, V. J. Francis and R. P. Singlt,
for the respondent.
65G
SUPREME COURT REPORTS
[1973} 3 S.C.R.

## Text

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649
STATE OF U.P.
v.
DYER MEAKIN BREWERIES LTD.
March 8, 1973
[K. S. HEGDE, P. JAGANMOHAN REDDY AND H. R. KHANNA, JJ.]
C•ntral Sales Tax Act, 1956, Section 10-A-A&<es.ree registei·ed ar
d•ar<r in Gaziabad-Penalty proceedings lnitiat<d against asseme-SubS<qu•nt/y, assessee's registration transferred to Luck111)w-Sales Tax Officer
had jurisdiction to impose penalty on assessee even after transfer of regis.
tration.
The assessee was registered as a dealer under the Central Sales Tax
Act, 1956. at Ghaziabad. For the relevant asses•"K!'lt years, he
was
.Ssessed by the Tax Officer at Ghaz.iabad. The Saleo Tax Officer, Ghaziabad, sub5equently came to know that the assessee had misuse<! some of
the 'C' Forms and, therefore, issued a penalty notice u/s 10-A of the Act
on January 8, 1960.
Durin11 the pendency of the penalty proceedings,
the assessee transferred his registration to Lucknow.
The Sales Tax
Officer, Ghaziabad imposed the penalty on the aasessee for the Disuse of
Form 'C'. At the instance of the assessee. the Revisional Authority uoder
the Statute referred three questions of law to High Court under section
11 (I) di the U.P. Sales Tax Act, the principal question being whether
the Sales Tax Officer, Ghaziabad, had jurisdiction to impose penalty when
the registration was transferred to Lucknow.
The High Court answered
the question against the State.
On appeals by special leave, allowing· the appeals,
HELD: Prima facie, the Sales Tax Officer, Ghaziabad was competent
to levy the penalty on the assessee.
Section 10-A definitely says that the
authority who granted the certificate of registration to an assessee ii one
of the authorities competent to levy penalty. Undoubtedly the Sales Tax
Officer, Ghaziaba<l, was the authority
who granted
the certificate of
registration to the assessee and that certificate was in force during the
relevant assessment years.
Even though after 28-3-1960, 'the date
of
transfer of registration, he ceased to be the authority competent to grant
certificate of registration to the assessee he still had the competence to
levy penalty on the assessee in view of the fact, that it was he who had
granted certificate of registration to the asaessee.
The levy of penalty is
one of levying tax.
If the Sales-tax Officer was competent to levy salestax on the assessee in re.•pect of the relevant assessment years, he was
equally competent to levy penalty on the asscssee in reapect of the offences
committed during these years. [653 DJ
CIVIL APPELLATE JURISDICTJON :
Civil Appeals Nos. 1655
and 1656 of 1970.
Appeals bv special leave from !he judgmem: and order dated
l st January 1970 of the Allahabad High Court in Sales Tax Reference Nos. 15 and 16 of 1968.
H
N. D. Karkhanis and 0. P. Rana, for the appellant.
D. P. Singh, S. C. Agarwal, V. J. Francis and R. P. Singlt,
for the respondent.
65G
SUPREME COURT REPORTS
[1973} 3 S.C.R.
The Judgment of the Court was delivered by
HEGDE, J. These are appeals by Special Leave. They related
to penalty proceeding. 1'.he assessee, M/s. Dyer Meakin B~es
Ltd., .is canying on· busmess of mantifacture and sale of wmes,
bear and fruit juices, etc. at Ghaziabad.
The assessee was registered as a dealer under The Central Sales Tax Act, 1956
(hereinafter referred to as the Act) a_t Ghaziabad. During the
assessment years 1958-59 and 1959-60, the assessee submitted its
sales tax returns to the Sales Tax Officer at Ghaziabad and he was
assessed by that Officer.
Subsequently, the Sales· Tax Officer,
Ghaziabad, came to know that the assessee had misused some ot
the 'C' forms issued to it. According to his information, the
assessee, by misusing the 'C' form, had purchased goods worth
Rs. 11,754.62 P. in thi; assessment year 1958-59 and goods worth
Rs. 2,68,242.38 P. in the assessment year 1959-60. Hence, the
Sales Tax Officer, Ghaziabad, issued to the assessee a notice on
January 8, 1960 calling upon him to show cause why he should
not impose penalty on him under Section 10-A of the Act. The
assessee did not give any explanation. Some time thereafter, the
assessee made an aP.Plication praying for condonation of his default, alleging that the defaults were committed due to ignorance
of law. The Sales Tax Officer did not accept that explanation.
The Sales Tax Officer, Ghaziabad again issued a notice to the
assessee on October 31, 1960 requiring it to show cause why it
should not be prosecuted under Section IO (b) of the Act. Thereupon, the assessee submitted an application offering to compound
the offence for a sum of Rs. 7,000/-. That offer was not accepted .. Subsequently, on January 23, 1961, the Sales Tax Officer
again called upon the assessee to show cause why penalty should
not be imposed on him under Section 10-A. After examining the
representation made by the assessee, the Sales Tax Officer imposed
on the assessee a penalty of Rs. 1,000/- in respect of the u.nlawful purchases made by him during assessment year 1958-59 and
a sum of Rs. 23,000/- in respect of the unlawful purchases made
by him during the assessment year 1959-60. On appeal, the
Assistant Commissioner (Judicial) reduced the penalty in respect
of the assessment year 1958-59 to Rs. 750/- and in respect of the
~sment year 1959-60 to Rs.
17,000/-.
Thereafter, the
assessee took up the matter in revision. The Revisional Authority
dismissed the asses5ee's appeal in respect of the assessmept year
1958-59, but reduced the penalty fr0m Rs. 17;000/-
to Rs.
15,000/- in respect of the assessment year 1959-60. Thereafter.
at the instance of the assessee, the Revisional Authority submitted
the following questions to the High Court under Section 11 ( 1 ) of
the U.P. Sales Tax Act :-
"!. Whether on the facts and circumstances of the case
the Sales Tax Officer, Ghaziabad being not seized
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U.P. STATB v. DYBR MBAKIN (Hegde, /.)
651
of the matter at the tin).e of making the penalty order
the jurisdictl?n havin' ~n tramf~ ~~ I:ucknow
circle, was nght and iust. m la'Y 'in m1tialing tlle
penalty pr<>eeMing.o and 1U1posmg the fine ?
2. Whether on the facts and circumstances of the c11Se
the additional Revising Authority, Sales Tax,
Meerut Range was justified in holding that the appli·
cants made the representations with a guilty mind
fraudulently and falsely; with the full knowledge that
the objected goods purchased were not covered by
the registration certificate ?
3. If the answer to question No. 2 is in the negatiye,
whether the imposition of penalty under section
lO(b) of the Central Sales Tax Act was justified an<l
right in law ?"
The High Court answered the first question in favour of the
assessee.
It came to the conclusion that the Sales Tax Officer,
Ghaziabad, had no jurisdiction to initiate penalty proceedings
against the assessee ·as by the time he made his order, the jurisdiction over the assessee had been transferred to the Sales T8.ll.
Officer, Lucknow. Having answered the first question in favour
of the assessee, the High Court thought it unnecessarv to answer
the remaining two questions.
The only question that we have to decide is whether the High
Court was justified in. coming to the conclusion that the Sales Tax
Officer, Ghaziabad, had no' jurisdiction to impose penalty on the
assessee.
As mentioned earlier, the assessee was registered as a
dealer before the Sales Tax Officer, Ghaziabad. The assessee had
submitted his sales tax returns for tile assessment years 1958-59
and 1959-60 to the Sales Tax Officer, Ghaziabad. It is that Offi·
cer who had assessed the assessee. in respect of those assessment
years. The validity of those assessments have not been questioned
at any stage. The registration of the assessee was transferred
from Ghaziabad to Lucknow only on 28-3-1960. Till that dare,
the assessee continued to be registered as a dealer in the office of
the Sales Tax Officer, Ghaziabad. The penalty proceedings had
bee.n ini?-ated on Jan~ary 8, 1960, i.e. IQng before the assessee's
registration was transferred from the Sales Tax Officer, Ghaziabad
to the ~ales Tax Officer, Lucknow. The High Court came to the
conclus10n tl!at when the penalty was actually imposed on the
assessee, the Sales Tax Officer, Ghaziabad, had no jurisdiction
over the assess:e and hence the l!)vy made was invalid. We shall
pr~ent!y c:xanune th~ correctness of that conclusion. But before
doing so, 1t would be convenient to dispose off a new contention
a~vanced by Mr. Singh, the learned counsel for tl!e assessee. Mr.
Smgh contended that the registration of the assessee as a d~ler
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652
SUPP.EME COUl\T P.BPOP.TS
[1973] 3 s.c.a.
before the Sales Tax Officer, Ghaziabad was an invalid registration as the U.P. Sales Tax Act as well as the ·Central Sall:s Tax
Act did not permit double registration of the same assessee.
According to him the assessee's head office was at all time at
Lucknow. . This is an entirely new contention. No such conten-
. ti0n appears. to have been taken either before the authorities under
the Act or before the High Court. On the basis of the material
on record it is not possible to come to a firm conclusion that the
same assessee had been registered at two places. Further there is
no material befor~ us to show that during the relevant assessment
years the assessee's head o.flice was at Lucknow. These are essentially questions of fact.
We cannot go into tlibse questions at
this stage. Hence:, we do not propose to go into the contention
that the assessee's registration at Ghaziabad was invalid. We
have to proceed on the basis that the assessee was properly registered as a dealer at Ghaziabad. If that was not so, the assessee
would not have applied to the Sales Tax Officer, Ghaziabad, for
registration; nor would it have submitted its sales tax returns to
that officer. As mentioned earlier, the sales tax assessments for
the years 1958-59 and 1959-60 were not challenged as being unauthorised.
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This takes us to the question whether under Section 10-A
of the Aot, the Sales Tax Officer, Ghazibad, bad competence to
levy penalty on the asaessee.
We shall first read Section 10 of
the Act to the extent it is material for our present purpose. That
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~ection says :-
"10. Ii any person-
(a)
(b)
(c)
(d)
(e)
(f)
....... •'• ........ .
being a regisl4!£ed dealer, falsely represents when
purchasing any class ol goods
that ,goods of
such class are ~
by his ·certificate of
registration; or
he shall be punishable with simple imprisonment which
may extend to six months, or with fine, or with both; and
when the offence is a continuing offence, with a daily fine
which may extend to fifty rupees for every day during
which the offence continues".
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U.P. STATE v. DYER MEAKIN (Hegde, J.)
653
Secition 10-A(I) says :-
"If any person purchasing goods is guilty of an offence
under clause (b) or.clause (c) .or clause (d) of section
10, the authority who granted to him or, cu the case
ma,v be is competent to grant to him a certificate of
registration under this Act
may, after giving him a
reasonable opportunity of being
heard, by order in
writing, impose upon him by way of penalty a sum not
exceeding one and a half times the tax which would
have been levied under this Act in respect of the sale
to
him of the goods if the offence had not bieen
committed:
Provided that no prosecution for an offence under
seotion 10 ·shall be instituted in respect of the same
facts on which a penalty has been imposed under this
section. " (emphasis supplied) .
There is no dispute that the authority who granted the certiD
ficate of registration was the Sales Tax Officer, Ghaziabad. Therefore, prima facie, he was competent to levy penalty on the assesscc.
But it was contended on behalf of the assessee that on 28.3.1960,
the registra!tion before the Sales Tax Officer, Ghaziabad, stood
cancelled and thereafter the assessee was registered before the
Sa)es Tax Officer, Lucknow, that being so, the Sales Tax Officer,
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Ghaziabad, had no jurisdiction to levy penalty on the assessee.
This contention overlooks the language of Section 10-A. That
section definitely says that the authority who gra.nted the certificate of registration to an assessce is one of the authorities competent to levy penalty.
Undoubtedly, the Sales Tax Officer,
Ghaziabad, was the authority who granted the certificate of registration to the assessee and that certificate was iu force durin11: the
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assessment years 1958-59
and
1959-60.
Even though after
28.3.1960 he ceased to be the authority competent to grant certificate of registration to the assessee he still had the competence to
levy penalty on the assessee in view of the fact that it was he
who had granted certificate of registration to the assessee.
In
this case, we are dealing with the penalty relating to offences
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committed during the assessment years 1958-58 and 1959-60.
In fact the levy of penalty is .one form of levying tax. If the
Sales Tax Officer was competent to levy sales tax on the assessee
in respect of those assessment years, he was equally competent
to levy penalty on the assessee in respect of the offences committed during those years. In our opinion, the High Court did not
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properly appreciate the legal position in this case.
The High
Court was wrong in thinkjng that the proceedings initiated on
January 9, 1960 stood tem1inated as a result of the subsequent
notices issued by the Sales Tax Officer.
The notices issued 1>y
654
SUPREME COURT REPORTS
(1973] 3 S.C.R.
him are not statutory notices.
Under Section 10-A of the Act
tho Sales Tax Officer was only required to give reasonable opportunity to the assessee to show cause why penalty should not be
imposed on him.
In the result, we allow these appeals, set aside the order of
the High Court and remand the case to the High Court for answering the remaining questions.
Costs of these appeals will be
costs in the cause.
S.B.W.
Appeals allowed.
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