JUDGMENT
T.D. Sugla, J.
1. The Sales Tax Tribunal has referred to this Court for opinion the following four common questions of law :
“1. Whether, the amendment of section 36(2)(c) dated September 1, 1969, is of retroactive nature and applies to all cases wherein reassessment orders are passed on or after September 1, 1969, irrespective of the period involved being prior to September 1, 1969 ?
2. Whether, the Tribunal was justified in holding that the amendment being retroactive in nature the penalty under section 36(2)(c) can be levied in any order of reassessment passed on or after September 1, 1969, in respect of the period prior to September 1, 1969, when there was no provision for levy of penalty in reassessment proceedings ?
3. Whether, on the facts and in the circumstances of the case, there was a valid charge and a proper finding that the assessee had knowingly furnished inaccurate particulars of transactions liable to tax so as to attract penalty under section 36(2)(c) of the Act ?
4. Whether, on thep1 facts and in the circumstances of the case, the Tribunal was justified in holding that even in respect of the assessment years 1962-63 and 1963-64, the quantum of penalty would have to be regulated with reference to the provisions of section 36(2)(c) of the Act, as it stood after the amendment dated September 1, 1969 ?”
2. The assessee is a partnership firm. Its business is that of manufacturing house service electrical meters. It is registered under the Bombay Sales Tax Act, 1959 (for short “the Act”). The period of assessment involved is from April 1, 1962 to March 31, 1963 and from April 1, 1963 to March 31, 1964. It is common ground that the returns were filed by the assessee in time and the assessments were originally completed on August 5, 1967 and December 30, 1967, respectively. Subsequently, on July 7, 1969, the Sales Tax Officer, Enforcement Branch, paid a visit to the assessee’s place of business. He compared its turnover with that of Messrs. Havells and found some discrepancy. Having reason to believe that the assessee’s turnover of sales liable to sales tax had, in respect of those two years, been underassessed as a result of concealment of particulars by the assessee, the Sales Tax Officer issued notices under section 35 of the Act on March 29, 1971, which were served on the assessee on April 19, 1971. It is also common ground that the assessments for both the periods resulted in enhanced determination of taxable sales.
3. Being of the view that the penal provisions of section 36(2)(c) were attracted, the Sales Tax Officer, after allowing the assessee opportunity of being heard, imposed certain amounts by way of penalty. The orders imposing penalty were challenged. While upholding the finding of the Sales Tax Officer as regards concealment and the applicability of section 36(2)(c), the Tribunal reduced the quantum of penalty to Rs. 15,000 and Rs. 35,000 for the respective years.
4. Shri Surte, the learned counsel for the assessee, submitted that up to August 31, 1969, the provisions of section 36(2)(c) did not envisage imposition of penalty for concealment in reassessment proceedings under section 35 as distinct from assessment proceedings under section 33. Relying on this Court’s judgment in Commissioner of Sales Tax v. Bombay Company Pvt. Ltd. [1979] 43 STC 261, he submitted that the amendment was not retrospective and penalty under section 36(2)(c) could not admittedly be imposed for concealment under the amended provisions in respect of assessments for the period prior to August 31, 1969. Further he invited our attention to the Supreme Court decision in the case of Brij Mohan v. Commissioner of Income-tax , for the proposition that it is the law ruling at the date on which the act of concealment takes place which is relevant for the purpose of imposition of penalty. He reiterated that the concealment, if any, took place in this case on the dates when the assessee had filed its returns. Section 36(2)(c), as it then stood, certainly did not envisage initiation and imposition of penalty on the basis of concealment during reassessment proceedings. The mere fact that the reassessments were initiated and completed after September 1, 1969, in this case, i.e., after the amendment of section 36(2)(c), it was contended, could not expose the assessee to penalty in reassessment proceedings.
5. Shri Jetley, the learned counsel for the department, on the other hand, stated that the department’s case was not that the amendment in section 36(2)(c) was retrospective in operation. The case only was that it was retroactive, i.e., whenever reassessment, irrespective of the period involved, took place after September 1, 1969, Sales Tax Officer could initiate and impose penalty under section 36(2)(c) if the provisions were otherwise attracted. He made an attempt to distinguish the Supreme Court decision in Brij Mohan v. Commissioner of Income-tax pointing out that in that case the question pertained to the quantum of penalty. A subsequent amendment of the statute provided different and more rigorous mode of penalty. The question was whether penalty was to be imposed on the basis of law obtaining at the commencement of the assessment proceedings, at the time of concealment or at the time of initiating the penalty proceedings. It was held that the penalty will require to be imposed with reference to the law that obtained when the concealment took place and that will be the day when return was filed. In the present case, the mode of imposition of penalty was stated to have remained all through the same. The only question was that prior to September 1, 1969, cognizance of concealment could not have been taken during the reassessment proceedings under section 35, whereas after September 1, 1969, cognizance could be taken. The nature of the amendment, it was urged, is procedural and not substantive. In this context, Shri Jetley relied on the observations in paragraph 17 in the Supreme Court decision in Hardeodas Jagannath v. State of Assam [1970] 26 STC 10. It was pointed out that in that case the assessment was completed after the provisions relating to appeals were amended and the appeal was naturally filed thereafter. The Supreme Court held that the amended provisions would attract and not the provisions that obtained during the period covered by the assessment.
6. The first important question is when did concealment take place or could be said to have taken place. The Supreme Court has held in Brij Mohan v. Commissioner of Income-tax , that law applicable is the law operating on the date when the return or returns not disclosing full income was/were filed. No doubt, that was an income-tax case and under the Income-tax Act, unlike Sales Tax Act, returns are to be filed once again in response to notice issued for reassessment. However, this fact, to our mind, does not make any material change in the situation. Even under the Income-tax Act though there is provision for filing return in response to notice issued for reassessment, the concealment, if any, is considered with reference to the original return. There is no dispute that the original returns in this case were filed on time. It may, therefore, be assumed that the returns for the last quarter of the two periods were filed some time in April/May, 1963/1964. For the present we will assume that it was open to the assessee to file revised returns under section 32(3) and thereby to disclose correct particulars of taxable sales, if there was any omission or wrong statement in the returns filed originally. The concealment, if any, took place in view of the above Supreme Court decision on the expiry of the time for filing the revised returns under that section, i.e., after a period of three months from the date of filing the last quarterly returns. The concealment, if any, thus, took place in this case latest in June/July, 1963 and in June/July, 1964.
7. Assuming that the assessee is guilty of concealment in terms of section 36(2)(c), for reasons stated by us above, the concealment took place before the amendment of section 36(2)(c) with effect from September 1, 1969. The section, as it then stood, admittedly did not provide for initiation and/or imposition of penalty for concealment during the course of or an reassessment, though the notices for reassessment were issued and reassessments were made after the amendment after which section 36(2)(c) did provide for initiation and imposition of penalty during the course of and on reassessment. This is the real question that requires to be decided in these two references. In other words, what is to be considered is whether the power to take cognizance of concealment during the course of and on reassessment is or amounts to a substantive provision or is a mere procedural provision. It is true that the Supreme Court decision in Brij Mohan v. Commissioner of Income-tax , involved amendment pertaining to quantum of penalty and such an amendment was held to be substantive. It is also true that apparently there is some difference between the nature of amendment pertaining to quantum of penalty and of providing power to initiate and impose penalty during the course of and on reassessment under section 35. However, the distinction, to our mind, is not material and the amendments in both cases are and have to be taken as substantive. In the circumstances, the assessee’s liability to penalty under section 36(2)(c) will have to be determined with reference to the law as it obtained when the act of concealment took place, i.e., when the returns were or were required to be filed.
8. The Supreme Court decision in Hardeodas Jagannath v. State of Assam [1970] 26 STC 10, on the other hand, pertains to the procedure as regards filing of appeal. Before the amendment an assessee could file an appeal by making payment of admitted tax liability. After the amendment the requirement was of payment of tax required of him by the Assistant Commissioner. The assessment in that case was completed after the amendment and naturally appeal was filed thereafter. The question arose whether the Commissioner was justified in asking the assessee to deposit a particular amount as distinct from mere admitted tax liability. Though the assessment involved period prior to the amendment, the Supreme Court held that the Assistant Commissioner was justified in asking the assessee to pay the particular amount. The decision, to our mind, has no application in this case. The right of appeal was not denied to an assessee. Payment of admitted tax and/or something more towards the liability assessed is in the nature of procedure. We also do not agree with Shri Jetley that the provisions of section 36(2)(c) are retroactive and should, therefore, apply to all reassessments completed after the amendment of that section with effect from September 1, 1969. As stated by us earlier, for imposition of penalty under section 36(2)(c) the material date is the date on which the act of concealment took place. Since the act of concealment in this case took place on the date of filing of the returns, it is the law existing on that date that would apply and not the amended provisions.
9. In the result, question Nos. 1 and 2 are answered in the negative and in favour of the assessee. In view thereof, it is not necessary to answer question Nos. 3 and 4. The assessee is entitled to refund of the deposits made by it towards references. No order as to costs.
10. Reference answered accordingly.