JUDGMENT R.R. Rastogi, J.
1. This is assessee's revision under Section 11(1) of the U. P. Sales Tax Act (hereafter "the Act"). The assessee, a registered firm, carried on business in foodgrains and oil-seeds. It was duly registered with the department under the Act. For the assessment year 1977-78, the assessee did deposit a sum of Rs. 25, being the fee for renewal of the registration certificate but did not submit an application in form XIV for the renewal of this certificate. Rule 58(1) of the U. P. Sales Tax Rules, requires that every registered dealer who continues to be liable to registration shall submit an application in form XIV for the renewal of his certificate before the date of its expiry. The application would be accompanied by the certificate to be renewed and satisfactory proof of deposit of fee. Sub-rule (2) says that if the Sales Tax Officer is satisfied that the application has been duly made and the fee deposited, he shall renew the certificate and return it to the dealer. For non-compliance of this provision penalty is exigible under Section 15-A(l)(g), which reads :
15-A. Penalties in certain cases.-(1) If the assessing authority is satisfied that any dealer or other person....
(g) being liable for registration under this Act, carries on or continues to carry on business without obtaining registration or without furnishing the security demanded under Section 8-C; or ...
it may, after such enquiry, if any, as it may deem necessary, direct that such dealer or person shall pay, by way of penalty, in addition to the tax, if any, payable by him....
(iv) in a case referred in Clause (g), a sum of rupees one hundred for each month or part thereof for the default during the first three months and rupees five hundred for every month or part thereof after the first three months during which the default continues.
2. The assessing authority accordingly issued a notice to the assessee pursuant to which none appeared on its behalf nor was any application for adjournment given nor was any written explanation filed. The assessing authority found that the disclosed turnover exceeded the prescribed limit and since the assessee had not applied for renewal of registration certificate it was liable to penalty under Clause (g) of Section 15-A(1) and it imposed the same in the sum of Rs. 4,800.
3. The assessee filed an appeal and contended before the Assistant Commissioner (Judicial) that there was no mens rea on the part of the assessee in this behalf and the mistake was only due to a bona fide belief that the assessee was not required to do anything further and at best it was a case of technical default only. The Assistant Commissioner (Judicial) did not accept this contention because firstly Clause (g) of Section 15-A(1) like the other clauses of this Sub-section does not say that the default should have been without reasonable cause; secondly as the Supreme Court has, in Joshi, Sales Tax Officer v. Ajit Mills Limited [1977] 40 STC 497 (SC), taken the view that the notion that a penalty or a punishment cannot be cast in the form of an absolute or no-fault liability but must be preceded by mens rea is not correct, existence of mens rea was not relevant and lastly that no explanation whatsoever was submitted by the assessee . before the assessing authority. He thus confirmed the imposition of penalty but reduced the quantum thereof to Rs. 4,300. Being aggrieved, the assessee took up the matter before the Additional Judge (Revisions), Allahabad and submitted before him that the requisite renewal fee was duly deposited by the assessee and since the registration certificate which had been filed before the assessing authority during the preceding year had been lying with the assessing authority, no application in form XIV was given for the year under consideration. According to the assessee it was the duty of the assessing authority to return the registration certificate so as to enable the assessee to file it again with the application for renewal. The learned Additional Judge (Revisions) has not accepted this contention and has held that the act of the assessee in not getting the certificate of registration renewed "is an intentional act and he is to suffer for it". The penalty order has thus been confirmed, hence this further revision.
4. It was submitted before me on behalf of the assessee that the omission on the part of the assessee to file the application for renewal in form XIV was only a technical default at the most. It could not be treated as wilful as the renewal fee was deposited by the assessee well within time and reliance has been placed on Hindustan Steel Limited v. State of Orissa [1970] 25 STC 211 (SC), Cement Marketing Company of India Ltd. v. Assistant Commissioner of Sales Tax, Indore [1980] 45 STC 197 (SC) and an unreported decision of a learned Judge of this Court in Khandelwal Medical Stores v. Commissioner of Sales Tax (Sales Tax Revision No. 1010 of 1978, decided on 19th September, 1979-Allahabad High Court). On the other hand it was contended by the learned standing counsel that the default mentioned in Clause (g) of Section 15-A(1) of the Act is not preceded by any such word as deliberate, reasonable cause or false and therefore, the department is not required to give any proof of the default on the part of the assessee being mala fide or wilful and secondly that the conception that a default cannot be visited with punishment unless proof of guilty intention is given is now no longer correct.
5. After considering the respective submissions made before me, I am of the opinion that in the present case the penalty order has to be sustained. There is no dispute that the assessee is an old dealer registered with the department under the U. P. Act. Registration certificate had been granted to it and year after year it had been applying for renewal of that certificate. This shows that the assessee was conscious of its statutory obligation of getting the registration certificate renewed year after year. For the year under consideration the assessee deposited the renewal fee on 22nd March, 1977, that is, within time, but did not submit any application for renewal. In other words, the assessee carried on business without any registration as required by the statute. The assessee did not submit any explanation whatsoever before the assessing authority. In fact nobody appeared on behalf of the assessee before that authority. For the first time in appeal before the Assistant Commissioner (Judicial), the explanation given was that the assessee was under an impression that at its end nothing was required to be done and thus there was no wilful default on the part of the assessee and the default, if any, was technical one and before the revising authority the contention was that since the registration certificate which had been filed with the application for renewal in the preceding year had not been returned by the assessing authority, the assessee did not file any application in form XIV for the year under consideration. The position, therefore, is that the assessee did not at any stage whatsoever explain the circumstances in which it was prevented from filing application for renewal in form XIV. It cannot be doubted even for a moment that the assessee was conscious of its statutory obligations in this behalf because it deposited the renewal fee in time. It was for the assessee to explain the circumstances in which it could not move an application for renewal of registration and then alone it could be seen as to whether the default on the part of the assessee was wilful or not. I am prepared to agree even for a moment that it was only a technical default (sic). A default may be technical when there is only some formal omission on the part of the party charged with a default. The statute requires the assessee in certain circumstances to obtain registration certificate from the department and to have it renewed year after year. The failure on the part of a dealer to get a registration certificate renewed means that in that year the assessee has carried on business without obtaining any registration and that is a clear breach of the statutory provisions and not only a technical default. The excuse of the assessee that since the registration certificate had not been returned by the assessing authority, it was under no obligation to file an application for renewal has no merit either because the assessee's obligation is to file an application for renewal. The relevant rule requires that the registration certificate should be attached with this application. Now, if the registration certificate is in the possession of the assessing authority, then either the assessee should obtain it back and attach it with the application for renewal or make a note in the application that the certificate is already with the assessing authority. It would be seen, therefore, that there was a clear default committed by the assessee in this case and this was not seriously disputed before me by the learned counsel for the assessee also. All that was urged was that there was no wilful intention on the part of the assessee to commit this default. It is significant to note that almost in all the Clauses of Sub-section (1) except Clause (g) there is some such word which does go to show that the department is required to prove that the default on the part of the assessee was a conscious and deliberate one. Such words are "reasonable cause", "false", "concealed" and the like. In Clause (g) there is no such word mentioned and the contention of the learned standing counsel in this behalf cannot be brushed aside easily. In Khandelwal Medical Stores (Sales Tax Revision No. 1010 of 1979 decided on 19th September, 1979-Allahabad High Court) of course a similar contention advanced on behalf of the revenue was repelled by the learned single Judge following the decision of the Supreme Court in Hindustan Steel Limited [1970] 25 STC 211 (SC). That decision in Hindustan Steel Ltd.'s case [1970] 25 STC 211 (SC) is certainly good law but has been rendered on its own facts.
6. In the case of Ajit Mills Limited [1977] 40 STC 497 (SC) it was a Bench of seven Judges and their Lordships while considering the vires of Sectionss 37(l)(a) and 40(2) of the Bombay Sales Tax Act [there is a forfeiture Clause in Section 37(1) which is a punitive measure in nature enacted to protect public interest in the enforcement of the fiscal legislation] had occasion to observe that the forfeiture Clause in Section 37(1) is a punitive measure to protect public interest in the enforcement of the fiscal legislation and it falls squarely within the area of implied powers. All real punitive measures, including the dissuasive penalty of confiscating the excess collection, are valid, being within the range of ancillary powers of the legislature competent to exact a sales tax levy. The fact that there is arithmetical identity between figures of the illegal collections made by the dealers and the amounts forfeited to the State cannot create a conceptual confusion that what is provided is not punishment but a transference of funds. The notion that a penalty or a punishment cannot be cast in the form of an absolute or no-fault liability but must be preceded by metis rea is not correct. Therefore the contention that Section 37(1) fastened a heavy liability regardless of fault has no force in depriving the forfeiture of the character of penalty. The fact that in Section 37(1) metis rea is excluded and the penal forfeiture can be enormous are germane to the legislative policy, not for judicial compassion.
7. In the present case as well, in my opinion, metis rea is excluded from Clause (g) of Section 15-A(1) and for default on the part of a dealer liable for registration to carry on or continue to carry on business without obtaining registration, a heavy penalty is levied, may be germane to legislative policy but not for judicial compassion.
8. Now I come to the case of Hindustan Steel Limited [1970] 25 STC 211 (SC). It would be necessary to set out the facts of that case in brief. The appellant, M/s. Hindustan Steel Limited, a Government of India undertaking in the public sector, which was registered as a dealer under the Orissa Sales Tax Act, 1947, for the last quarter ending March, 1959, between 1954 and 1959 was erecting factory buildings for its steel plant, residential buildings for its employees and ancillary works such as roads, water supply, etc. Some of the constructions were done departmentally and the rest through contracts. The company supplied to the contractors for use in construction bricks, coal, cement, steel, etc., for a consideration which in addition to the cost price included some additional amounts charged by the company and the question was whether the supply of such materials amounted to sale and the company was a dealer for the purposes of sales tax under the Orissa Sales Tax Act. It was held that the supply of material by the company to the contractors constituted sale and further that if the company had charged a fixed percentage above its cost price only for storage insurance and rental or other incidental charges, it could not be said that the company was carrying on business of supplying material and it would not be a dealer. Since the statement of case submitted by the Tribunal was considered as bald and an important piece of evidence had been ignored, the court could not decide whether the company was a dealer and supplementary statement of the case was called for. It was on the facts stated above that penalty proceedings were started against the company under Section 9(1) read with Section 25(l)(e) of the Orissa Sales Tax Act. Under that provision penalty could be imposed for failure to register as a dealer. As noted above in that case on the basis of the statement of the case submitted by the Tribunal the court could not decide whether the company was or was not a dealer and penalty for failure to register as a dealer could be imposed only after recording the finding that the company was a dealer. While referring to the provisions in Section 9(1) read with Section 26(l)(a) it was observed :
But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is a result of a quasi-criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligations. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in-charge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer.
9. Now, benefit can be taken of these observations if it is found that there was no conscious disregard of the statutory obligation on the part of the dealer or there were relevant circumstances on a consideration of which the authority could exercise its discretion judicially in treating the defult as technical or venial. The defaulter has to show that he acted in an honest and genuine belief in not performing the statutory obligations. Can it be said in the present case that it was not a conscious default on the part of the assessee or that the exercise of discretion on the part of the authorities below was not judicial. Can the assessee claim that it was under an honest and genuine belief that it was not obliged to apply for renewal of certificate of registration. That could have been possible only if there was any doubt whether or not the assessee was a dealer and there could be no such doubt in this case. I have already stated above that it is not disputed that the assessee committed a default and further I have shown that it was a conscious default because the assessee knew of its statutory obligation but rested content with the deposit of Rs. 25 being the renewal fee only. The assessee never explained the circumstances which prevented it from making the application in form XIV. Unless the party concerned places the circumstances, how it can be said that they have not been considered or that the exercise of discretion was not judicial ? I find that the Additional Judge (Revisions) has recorded a finding that the default was an intentional act on the part of the assessee. Therefore, the assessee cannot get any benefit from the decision in Hindustan Steel Limited [1970] 25 STC 211 (SC). Similarly, the case of Cement Marketing Company of India Limited [1980] 45 STC 197 (SC) is also of no help to the assessee because there the plea of the assessee was that the amount of freight did not fall within the definition of "sale price" as given in Section 2(o) of the Madhya Pradesh General Sales Tax Act, 1958 and Section 2(h) of the Central Sales Tax Act, 1956 and therefore, did not include the same in the return. The view taken was that it was a highly arguable contention which required serious consideration by the court and the belief entertained by the assessee that it was not liable to include the amount of freight in the taxable turnover could not be said to be mala fide or unreasonable. In the instant case there was no question of the assessee entertaining a belief that it was not liable to submit an application for renewal of registration in from XIV. It is a clear case of conscious diregard of the statutory obligations on the part of the assessee in this behalf and as such penalty under Section 15 A(l)(g) was attracted.
10. In Khandelwal Medical Stores (Sales Tax Revision No. 1010 of 1978 decided on 19th September, 1979-Allahabad High Court) of course it has been laid down that penalty under this provision cannot be imposed in the absence of metis tea. Since in this case notice was not taken of the Supreme Court decision in Joshi, Sales Tax Officer v. Ajit Mills Limited [1977] 40 STC 497 (SC) it is not binding on this Court.
11. In view of the above discussion, the revision fails and is dismissed with costs to the Commissioner of Sales Tax which are assessed at Rs. 200.