*1* kps IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SALES TAX REFERENCE NO.7 OF 2001. IN REFERENCE APPLICATION NO.24 OF 1998. The Commissioner of Sales Tax, Maharashtra State, Mumbai. ..Applicant -Versus- M/s Nature Laboratories Pvt.Ltd.. ..Respondents ........... Mr.V.A.Sonpal, “A” Panel Counsel for the Applicant. Mr.P.V.Surte, Amicus Curiae, for the Respondents. .......... CORAM : V.C.DAGA & K.K.TATED, JJ. Closed for orders on : 28th January, 2010. Pronounced on : 01st April, 2010. P.C.: 1 Heard the learned counsel for the rival parties. 2 By this Reference under Section 61(1) of the Bombay Sales Tax Act, 1959 (herein after to be referred as “the BST Act, 1959”) made at the instance of the Applicant-Commissioner of Sales Tax, Maharashtra State, Mumbai; the Maharashtra Sales Tax Tribunal, Mumbai vide its judgment dated 05.05.2001 has referred the following questions of law for the opinion of this Court:- “1. Whether on the true and correct interpretation of the Bombay High Court’s judgment in the case of M/s *2* Indoswe Engineers Pvt.Ltd. Vs. State of Maharashtra (101 STC 177), the Tribunal was justified in law, in holding that for explanation (I) of Section 36(2)(c) of the Bombay Sales Tax Act, 1959 read with Section 9(2A) of the Central Sales Tax Act, 1956, gross or willful neglect in making lesser payment, has to be proved by the revenue? 2. Whether, on the true and correct interpretation of explanation I to the section 36(2)(c) of the Bombay Sales Tax Act, 1959, the Tribunal was justified in law in holding that the condition precedent for the levy of penalty under the said section read with the said section explanation is that the short fall must be attributed is neglect on the part of the appellant? 3. Whether, on the true and correct interpretation of the Bombay High Court judgment in the case of M/s Indoswe Engineers Pvt.Ltd. Vs. State of Maharashtra (101 STC 177), the Tribunal was justified in law in holding that, according to the Bombay High Court, the appellant is taken to have rebutted the presumption deemed in Explanation I to section 36(2)(c) of the Bombay Sales Tax Act, 1959, if the result of the books of accounts is accepted? 4. Whether, on the facts and in the circumstances of the case and on the true and correct interpretation of section 36(2)(c) read with Explanation I of the Bombay Sales Tax Act, 1959, the Tribunal was justified in law in holding that the penalty levied under the said section read with the said explanation is not attracted?” 3 In the present case, the Respondent was assessed under the Central Sales Tax Act, 1956 (in short “the CST Act, 1956”) on 31.03.1992. The said assessment resulted in levying tax of Rs. 1,23,957/- and penalty under Section 9(2A) of the CST Act, 1956 read with Explanation-I of Section 36(2)(c) of the BST Act, 1959 at Rs.24,600/- as the Respondent had paid only Rs.45,627/- along *3* with returns i.e. 36.2% of the total tax. The Sales Tax Officer levied the said penalty under Section 9(2A) of the CST Act, 1956 read with Section 36(2)(c) Explanation-I of the BST Act, 1959 as there was difference of more than 20% in tax paid and tax assessed. 4 Against the aforesaid assessment order dated 31.03.1992, the Respondent preferred the first appeal before the Assistant Commissioner of Sales Tax (Appeals) who by an order dated 28.02.1994 gave relief of Rs.15,700/- in tax on production of C-forms and confirmed the rest of tax as the Respondent failed to produce rest of C and E-I forms declarations. Inspite of relief of Rs. 15,700/- net tax payable was Rs.1,08,257/- as against which the Respondent paid Rs.4,56,627/- i.e. 42.2% of the tax assessed. As the Respondent was still under ambit of Section 9(2A) of the CST Act, 1956 read with Section 36(2)(c) Explanation I of the BST Act, 1959, the Assistant Commissioner of Sales Tax (Appeals) retained penalty as levied by the Sales Tax Officer. 5 Being aggrieved by the aforesaid order, the Respondent preferred the Second Appeal No.1272/1994 before the Maharashtra Sales Tax Tribunal, Mumbai. As the Respondent could not produce “C” and “E-I” forms, the Tribunal vide its order dated 09.01.1998 confirmed the tax but deleted penalty levied under Section 9(2A) of the CST Act, 1956 read with Section 36(2)(c) *4* Explanation I of the BST Act, 1959 at Rs.19,400/- relying on the judgment in the case of M/s Indoswe Engineers Pvt.Ltd. Vs. State of Maharashtra (101 STC 177). 6 Being aggrieved by the aforesaid order dated 09.01.1998, the Applicant-Revenue preferred Reference Application No.24/1998 before the Tribunal. The Tribunal vide its judgment dated 05.05.2001 allowed the reference and referred the above questions of law for the opinion of this Court. 7 The questions of law involved in the present Sales Tax Reference, are similar to that of the Sales Tax Reference No.2/2005 which was decided by this Bench on 01.04.2010. In view of the judgment in the Sales Tax Reference No.2/2005, the questions of law referred in this reference are also answered against the Applicant-Revenue and in favour of the Respondent-Assessee. Reference is, accordingly, disposed of. (K.K.TATED, J.) (V.C.DAGA, J.)