J. Gupta, Judicial Member
1. The instant proceeding under Section 8 of the West Bengal Taxation Tribunal Act, 1987, has been initiated challenging the legality of an order imposing penalty, as well as the legality of the demand notice and of the order passed by the revisional authority. The case made out in the application is as follows :
The applicant is presently the sole proprietor of an erstwhile partnership-firm run in the name and style of Suddharam Shaw and Sons, which is registered under the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act"). Even after the West Bengal Sales Tax Act, 1994 came into force the registration certificate (hereinafter referred to as "the R.C.") remained the same and covered the purchase and resale of zinc ash, lead ash, old empty drums, old damaged and rejected electrical goods. Later, the R.C. was amended on two occasions to include purchases of old rejected copper wire scraps, aluminium scraps, etc. During the period from April 1, 1991 to December 21, 1994 the applicant purchased and sold, inter alia, brass scrap, zinc scrap, zinc ingot and zinc dross. On seven occasions the Commercial Tax Officer, on the applicant's prayers, issued declaration forms (hereinafter referred to as "the D.Fs.") for use against purchases of these new items, and did so after due verification of the previously used D.Fs. with their corresponding sale particulars. The applicant on receipt of D.Fs. issued the same to the sellers. But he was served with a notice dated December 30, 1994 in form VIIC calling for the documents and objections, if any, for hearing in connection with the determination of amounts of penalty to be imposed for improper use of D.Fs. during the period from April 1, 1991 to December 30, 1994. The applicant filed objection along with the books of accounts, purchase bills, etc., in connection with hearing of the penalty proceeding before the Assistant Commissioner. But a penalty of Rs. 3,60,000 was imposed by an order dated August 3, 1995 and a demand notice dated September 6, 1995 was also issued for the said amount. On revision the Deputy Commissioner reduced the penalty to Rs. 70,000 on the ground that purchase in respect of the goods not included in R.C. amounted to Rs. 9,48,653.42. Such imposition of penalty is illegal. Since the applicant submitted all papers relating to the purchases intended to be covered by the D.Fs., the Commercial Tax Officer had the full information, within the meaning of the expression "information received otherwise" as appearing in Section 7(4) of the 1941 Act, about the nature of the goods involved in such purchases. Therefore, the Commercial Tax Officer ought to have amended the R.C. by including therein those goods, namely, zinc ingot, zinc scrap, zinc dross, etc. The Commercial Tax Officer has failed in his duty and cannot for his own wrong, penalise the applicant. Hence, the applicant prays for an order quashing the order dated November 23, 1995 of the Deputy Commissioner and the order dated August 3, 1995 of the Assistant Commissioner and for restraining the respondents from acting on the said orders as well as the notice dated December 30, 1995.
2. The Commercial Tax Officer, Bartolla Charge, has resisted the applicant's prayer by filing an affidavit-in-opposition for self and other respondents. The specific case of the respondents is as follows :
A registered dealer can issue D.Fs. for the purchase of classes of goods as find mention in R.C. Thus, the D.Fs. issued to the applicant could be used to cover the purchases of class or classes of goods included in the R.C. at the time of initial registration as well as by subsequent amendment. But it was detected later that the applicant during the period from April 1, 1991 to December 21, 1994 used many D.Fs. for purchase of brass scrap, zinc scrap, zinc ingot and zinc dross which are the items not specified in the R.C. During the hearing of the penalty proceeding and the appeal against the order imposing penalty, the applicant was given full opportunity of being heard. AH material documents were duly considered by the respondent No. 2 and respondent No. 3 in those two proceedings respectively. If a dealer wants to take advantage of inclusion of new items in the R.C., he should on his own apply under Section 16 of the 1941 Act for necessary amendment of the R.C. The applicant not having done so cannot justify the use of D.Fs. for purchase of goods not included in the R.C. Assumption of any "deemed amendment" on the ground that the Commercial Tax Officer had information about purchase of such goods cannot save such illegal use of. D.Fs. from the ambit of the penal provision of Section 5B of the 1941 Act. The penalty imposed, being within permissible limit, is not violative of law. Thus, the application initiating the present case is liable to be dismissed.
3. The affidavit-in-reply submitted by the applicant contains paragraphwise denial of the contents of the affidavit-in-opposition. The additional pleas of the applicant are, inter alia, that the respondents made wrong interpretation of the concerned laws and of the reported decisions and that the information received from the documents, supplied along with his (applicant's) application for issue of D.Fs. ought to have been treated as "information otherwise received" within the meaning of Section 7(4).
4. The main issue that calls for decision here is whether the order dated November 23, 1995 of the Deputy Commissioner is liable to be quashed on the ground of any illegality or impropriety.
5. The applicant being a reseller, his use of D.Fs. should be confined to purchases provided in Clause (aa) of Sub-section (1) of Section 5. Unauthorised use of D.Fs. will attract the penal provision of Section 5B which runs thus :--
"(1) If any registered dealer furnishes a declaration referred to in Clause (aa) and (bb) of Sub-section (1) of Section 5 or in the proviso to Clause (a) of Subsection (2) of that section--
(a) in respect of a sale to him of goods of any class or classes not specified at the time of the sale in the certificate of registration granted to him under Subsection (3) of Section 7, or
(b) in respect of a sale of any goods, where the sale was made to him before he was registered,
the prescribed authority may, after giving such registered dealer a reasonable opportunity of being heard, by an order in writing direct that he shall pay by way of penalty a sum not exceeding double the amount of the tax which could have been levied under this Act, in respect of the sale of the goods concerned.
6. The uncontroverted position here is that the applicant during the period from April 1, 1991 to December 21, 1994 purchased brass scrap, zinc scrap,'zinc ingot and zinc dross for resale and used D.Fs. against such purchases though his R.C. did not cover such goods. Therefore, under Clause (a) of Section 5B(1) of the 1941 Act the applicant would be liable to be penalised unless he can show that he was authorised to such use of D.Fs. for purchase of such goods. It is not in dispute that out of 39 D.Fs. received on 7 occasions from the Commercial Tax Officer the applicant issued 22 of them for purchase of zinc dross and other goods not covered by his R.C. The applicant defends his action on the ground that on every occasion of prayer for issue of D.Fs. he submitted before the Commercial Tax Officer the list of purchase bills as well as the purchase bills in whose context the D.Fs. were intended and that the purchase bills disclosed, inter alia, the nature of goods purchased. Shri S.N. Dey, learned Advocate for the applicant, in this context argues that the Commercial Tax Officer on being satisfied, issued the D.Fs. According to Shri Dey such papers constituted information regarding the nature of goods involved in such purchases and the Commercial Tax Officer on the basis of such "information received" ought to have amended the R.C. to cover such goods in terms of Section 7(4) of the 1941 Act.
7. It is now pertinent to advert to such provisions of the 1941 Act relating to amendment of R.C. as are relevant for the present purpose. Section 7(4) provides, inter alia, that Commissioner may from time to time amend any certificate of registration in accordance with information furnished under Section 16 or otherwise received. The part of Section 16 as is relevant in the present context runs thus,--
"16. Information to be furnished regarding changes of business.--If any dealer to whom the provisions of Sub-section (2) of Section 10 apply,--
(c) changes the name or nature of his business or effects any change in the class or classes of goods in which he carries on his business and which is or are specified in his certificate of registration, or
he shall within the prescribed time and in the prescribed manner inform the prescribed authority accordingly ; and if any such dealer dies, his legal representative shall in like manner inform the said authority."
Another provision that needs consideration in this context is that of Sub-rule (1) of Rule 11 of the Bengal Sales Tax Rules, 1941. The sub-rule reads :
"11(1) When any registered dealer makes any report in accordance with Section 16, he shall send his registration certificate to the Commercial Tax Officer together with the report, for amendment or replacement, as the case may be."
8. It can thus be seen that if a registered dealer is interested to enjoy the benefit of exemption from tax/concessional rate of tax by using D.Fs. in purchase of class of goods not already included in his R.C., he shall have to send a formal information to the Commercial Tax Officer concerned along with the R.C. No doubt, under Section 7(4) the Commercial Tax Officer may in an appropriate case suo motu amend an R.C. on the basis of information received otherwise than on the formal information sent by such dealer under Section 16 ; but that does not mean that on every occasion of information relating to purchase of new items of goods by a registered dealer the Commercial Tax Officer shall have to invariably amend the R.C. to include therein such items of goods. In our opinion, the power to amend R.C. suo motu is not intended to be used in a case where the information received is linked with contravention of a statutory obligation attracting penalty. If Section 7(4) is not construed that way, it will lead to an absurd situation that in case of such contraventions, no penalty can be imposed and rather in every such case the R.C. should be amended suo motu. The ratio of the decision reported in  19 STC 447 (Cal) [Dabur (Dr. S.K. Baurman) Pvt. Ltd. v. Commercial Tax Officer, Bkowanipore Charge] on which the applicant much relies, is not of any help to the applicant. In that case though the applicant was a manufacturer, his R.C. included some items which did not have direct bearing with the concerned manufacture and the Commercial Tax Officer having detected it suo motu amended the R.C. It was held by the Calcutta High Court that the Commercial Tax Officer had jurisdiction to act on any information besides those supplied by the dealer. This decision speaks only of the discretionary power of the Commercial Tax Officer to act on such information. It does not lay down that each and every information, besides the formal information sent by the dealer under Section 16, makes it obligatory on the Commercial Tax Officer to amend the R.C.
9. It is the respondents' case that documents accompanying the prayer for D.Fs. in the instant case, could hardly evoke suspicion that D.Fs. asked for were for the purchase of goods not included in the R.C. and, on the contrary, the applicant's pretence as if items in question were included in the R.C. misled the Commercial Tax Officer. Before us it has not been contended on behalf of the applicant that he on any such occasion made specific disclosure to the Commercial Tax Officer that the D.Fs. were needed for purchase of goods not included in the R.C. or that his formal prayers for issue of D.Fs. were accompanied by the R.Cs. that the Commercial Tax Officer had the opportunity to verify the entries of the R.C. with the nature of goods for whose purchase the D.Fs. were required. When it is obligatory for a registered dealer to confine the use of D.Fs. only to the extent of items included in the R.C., the Commercial Tax Officer, in the absence of any special reason to suspect to the contrary, may expect such dealer to have acted according to such obligation. Hence, the Commercial Tax Officer may not, in such circumstance, resort to elaborate scrutiny on every prayer for issue of D.Fs. In such circumstances, even if an unwary Commercial Tax Officer issues D.Fs., the same does not thereby vest the dealer with right to use D.Fs. for purchase of goods not included in his R.C.
10. Law demands that a registered dealer shall use declaration forms only against purchases of goods mentioned in his R.C. Any infraction of the provision of this law will be attended by penalty under Section 5B of the 1941 Act. So, such dealer must be on his own guard to ensure that no infraction is committed. Therefore, it is incumbent on him to first ascertain that his R.C. stood amended by inclusion of new items of goods, before he could use the D.Fs. for purchase of such goods. He cannot proceed on purchasing new items of goods by use of D.Fs. on an assumption that his R.C. stood so amended. His legal obligation is not discharged by mere unwary issue of D.Fs. by the Commercial Tax Officer. If the R.C, was not amended on the basis of purchase bill, etc., as are alleged to have been submitted along with the prayers for D.Fs., the applicant ought to have taken recourse to Section 16 of the 1941 Act before use of the D.Fs. for purchase of goods uncovered by the R.C. A similar matter came for consideration before the Calcutta High Court in the case of Jagadish Prosad Agarwalla v. State of West Bengal  44 STC 412. In that case the Commercial Tax Officer refused to specify cement for the purpose of Section 5(1)(aa) of the 1941 Act on the ground that the concerned dealer was engaged only in inter-State purchase of cement and not intra-State purchase. The initial issue of R.C. was accordingly made. The dealer did not challenge such issue of R.C. nor was his subsequent prayer for amendment of R.C. for coverage of intra-State purchase of cement with retrospective effect allowed. The Commercial Tax Officer through oversight or mistake issued some D.Fs. which the applicant of that case used for intra-State purchase. The dealer's prayer for amendment of the R.C. with retrospective effect for inclusion of intra-State purchase of cement was rejected by the Calcutta High Court. Mr. Justice Chittatosh Mookherjee (as his Lordship then was), in delivering the judgment, observed that in case the Commercial Tax Officer through mistake or oversight had issued the D.Fs. and the concerned dealer used the same, the dealer could not claim equity in his favour. However, Mr. Dutta, learned counsel for the State in that case, gratuitously conceded that the applicant of the case could have legitimate grievance if the Commercial Tax Officer proceeded to impose penalty upon dealer for improper use of D.Fs. But, the High Court did not give any specific finding on the point. In our view, such observation of Mr. Dutta is not in keeping with the position of law. We are of the view that it would be quite legitimate to initiate a penalty proceeding under Section 5B of the 1941 Act for the overt act of improper use of the D.Fs. by the dealer in disregard of his obligation in the face of the fact that his R.C. did not cover the items for which D.Fs. were used. The applicant in the case before us despite his knowledge of the extent of coverage of his R.C. has enjoyed the concessional rate of tax, has misled his sellers and has caused loss of revenue to the State exchequer. He seeks to exploit the Commercial Tax Officer's mistake as a plea for his deliberate defiance of the law. Shri Dey relies on the decision in the case of Hindustan Steel Ltd. v. State of Orissa  25 STC 211 (SC) ;  83 ITR 26 (SC) to justify the applicant's action. In this decision it has been observed that imposition of penalty for failure to perform a statutory obligation is a discretion to be exercised judicially by the authority and that penalty will not ordinarily be imposed unless the party concerned acted deliberately in defiance of law or acted in conscious disregard of his obligation. In the instant case before us, the applicant acted in conscious disregard of his obligation.
11. Shri Dey next relies on the decision reported in  79 STC 32 (WBTT) (Aziz & Company v. Commercial Tax Officer, Colootola Charge) to reinforce his argument that where the D.Fs. have been issued by the authority, misuse of such D.Fs. does not call for imposition of penalty. But factually the said case stood on a footing altogether different from the case before us. In the case of Aziz & Company  79 STC 32 (WBTT) the applicant as the manufacturer of hooka tobacco, a tax-free item, used to purchase raw materials which were taxable items and used to enjoy concessional rate of tax for purchases by using D.Fs. which they received on the strength of entries in the R.C. With effect from April 1, 1980 the relevant provision was amended to the effect that D.Fs. could be used only in respect of purchase made for manufacture of taxable goods. But the applicant's R.C. contains the old entries without amendment. The Commercial Tax Officer on the prayer of the applicant continued to issue D.Fs. which the applicant used for purchase of raw materials at concessional rate of tax. Later, the matter was detected and the revenue imposed penalty for improper use of D.Fs. This Tribunal held in that case that at the relevant time the R.C. permitted by way of existing endorsement the use of D.Fs. for purchases for manufacture of hooka tobacco and that after allowing such endorsement to exist in the R.C. the State cannot take advantage of its own wrong. But in the case before us there was absolutely no endorsement in the applicant's R.C. about brass scrap, zinc scrap, zinc ingot and zinc dross. Therefore, the decision reported in Aziz & Company v. Commercial Tax Officer  79 STC 32 (WBTT) does not apply to the case of the applicant before us.
12. Shri Dey is of the opinion that in Section 7(4) of the 1941 Act the word "may" in the context of the expression "information otherwise received" should be read as "shall" in order to make the amendment of the R.C. in the context of such information obligatory. To drive home his point he refers to the decisions reported in AIR 1963 SC 1618 (State of Uttar Pradesh v. Jogendra Singh) and  129 ITR 404 (SC) (Assistant Controller of Estate Duty v. Prayag Dass Agarwal). In the first case, it came up before the Supreme Court for decision if the word "may" as appearing in Rule 4(2) of the Uttar Pradesh Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 should be construed to mean "shall". Supreme Court firstly took note of the position that under Rule 4(1) the Governor may refer to the Tribunal the case relating to an individual Government servant or class of such servants involved in delinquence of the nature specified in the sub-rule itself. The court next noted that under Section 4(2) the Governor may in respect of a gazetted Government servant on his own request, refer the case to the Tribunal in respect of the matters referred to in Sub-rule (1). The Supreme Court came to a finding that the word "may" in Sub-rule (2) should be construed as "shall". The court elaborated the point with the observation that Sub-rule (1) was enough to encompass all Government servants including the gazetted ones and therefore a special provision for the gazetted Government servants contained in Sub-rule (2) cannot but be construed as obligatory on the Governor to refer the matter to the Tribunal, otherwise the latter provision would be redundant. We are unable to find the applicability of the above ratio to the case of the applicant.
13. In the second case Assistant Controller of Estate Duty v. Prayag Dass Agarwal  129 ITR 404 it was observed by the Supreme Court that even the enabling words in a statute which confers a discretionary power may have to be interpreted as compulsory where they amount to words clearly intended to effectuate a legal right. Thus, only in the special circumstances word "may" would carry the sense of "snail". If the word "may" appearing in Section 7(4) in the context of information "otherwise received" is construed to mean obligatory so as to compel the Commissioner to amend the R.C. of a dealer whenever an information regarding purchase by the dealer reaches him, it would lead to various complexities. Amendment of R.C. of all dealers on the basis of all and sundry information relating to purchases by such dealers would be simply chaotic and in disregard of a dealer's right to have opportunity of being heard as to whether he himself really intend such amendment or not, particularly when the information is received from sources other than the dealer. Again, amendment of R.C. in view of its bearing on the use of D.Fs., has direct impact on the tax obligation of both the seller and purchaser-dealers. Therefore, such indiscriminate and obligatory amendment would create much contusion in the assessment proceeding. Moreover, the effectuation of a dealer's right to have his R.C. amended would not in any way be affected even if the Commissioner's power to amend R.C. is discretionary in the context of information "received otherwise". Section 16 read with the Section 7(4) provides adequate procedure whereby a dealer on his own volition can apply to the Commissioner for amendment of his R.C. Keeping all these aspects, discussed above, in mind we are unable to hold that in Section 7(4) the word "may" in the context of information "received otherwise" should be construed as "shall".
14. Shri Dey next draws our attention to the decision in cases of (i) Commissioner of Income-tax, West Bengal v. Vegetable Products Ltd.  88 ITR 192 (SC) and (ii) C.A. Abraham v. Income-tax Officer, Kottayam  41 ITR 425 (SC) to contend that where a provision of taxing statute is capable of more than one interpretation or creates doubts, the interpretation which favours the assessee should be adopted. But we have already seen that the expression "received otherwise" as appearing in Section 7(4) neither creates any doubt nor suffers from any ambiguity.
15. According to Shri Dey, absence of mens rea protects the applicant from penalty. To derive support for this contention Shri Dey refers to decision reported in  101 STC 203 (Singh Traders v. Commissioner of Sales Tax, Lucknow). In this case it has been observed by the High Court of Allahabad, that where an offence is the creation of a statute, normally without anything more, the requirement of element of mens rea is imported into the concept of offence unless there is something express or implied in the language of the provision which goes against such presumption. This decision is in the context of Section 15A of the U.P. Sales Tax Act, 1948, which provides for penalty for making false verification or declaration in any application for registration or in connection with any proceeding under the Act In this case, the same person was the proprietor of a business concern and also the manager of another Government undertaking. Both the business concerns handed over form No. 31 to their common transporter who through inadvertence filed a blank form No. 31 belonging to the proprietorship concern for the goods of the other. But as soon as the mistake was detected the Tax Department was apprised of the same. The court, therefore, held that it was an instance of bona fide mistake and there was no mens rea and hence no scope for imposing penalty. But in the case before us even assuming that mens rea is a relevant factor, there was no inadvertent use of D.Fs. The applicant was very much conscious of his legal obligation as to the impermissibility of the use of D.Fs. for purchase of goods not included in his R.C. and yet he misused the same to enjoy the concessional rate of tax, taking undue advantage of the mistaken issue of the D.Fs. by the Commercial Tax Officer.
16. The next leg of argument of Shri Dey is that if there is no intention to avoid tax or where there is no loss to the Revenue, the levy of penalty is. unwarranted and in his opinion the decision reported in  101 STC 226 (All.) (India Pesticides Private Limited v. Commissioner of Trade Tax, U.P.) and  96 STC 429 (All.) (Bharat Electricals v. Commissioner of Sales Tax, U.P., Lucknow) would lend full support to his contention. We are unable to see how these decisions can be of any avail to the applicant. In the first case, goods transported by truck were duly accompanied by form XXXI under the U.P. Trade Tax Act ; but one such form was left behind during transhipment of goods from one truck to another. The misplaced form was produced before the officer, who issued the show cause notice, even before the goods were seized. There was no attempt to evade tax. Hence, the court held, the assessee did not deserve the penalty.
In the second case, the petitioner in his return showed imposition of tax on diesel pumping sets at the concessional rate of 3 per cent on the ground that the same were covered by "C" forms, but in the rectification proceeding the sales were taxed at the rate of 10 per cent since these were not covered by "C" form and penalty was levied. Ultimately, the Deputy Commissioner found that pumping sets being agricultural implements were liable to tax at the rate of 3 per cent. Hence, no penalty could be levied. But in the case before us, the applicant does not stand on any such analogical footing. We have already seen that the applicant tried to make gain by abuse of D.Fs. in spite of his knowledge that the goods purchased were not covered by his R.C. Shri Dey argues that the penalty proceeding against the applicant was vitiated by the fact that along with the notice in form VIIC, the gist of order proposed to be passed was not sent. According to him the sheet containing the gist of order proposed to be passed was handed over on a subsequent date. His plea is that since in terms of Rule 55B(2) of the 1941 Act it is mandatory, the gist of the proposed order must accompany the notice in form VIIC. The impression of pin-mark appearing in the xerox copy of the notice in form VIIC (annexure C to the application) clearly shows that some other paper/papers were sent as enclosure to this notice. Be that as it may, the signatures of the officer are dated December 30, 1994 both in the notice in form VIIC and the sheet containing gist of the proposed order. We find no reason to hold that the gist of the proposed order was withheld. At any rate it appears from the order of the Assistant Commissioner dated August 3, 1995 that during the hearing of the penalty proceeding the dealer or his advocate did not raise any objection about the non-availability of the gist of the proposed order.
17. Mr. Dey contends that the order imposing penalty is oppressive in view of the fact that maximum permissible penalty has been imposed without any rhyme or reason. On perusal of the order of the Deputy Commissioner, disposing of the revision against the order of the Assistant Commissioner, we find that due care in this respect has been taken. The Deputy Commissioner has ultimately found that the total purchase of the goods not specified in the R.C. amounted to Rs. 9,48,653.42. The tax at the rate of 8 per cent on the said amount would come to Rs. 75,892.00 approximately. The maximum penalty permissible would therefore, come to more than Rs. 1.5 lakhs. The Deputy Commissioner has fixed the penalty at Rs. 70,000. Hence, we find no substance in the contention of the learned counsel.
18. Before we part with the matter we like to mention that the unauthorised use of D.Fs. was made during the period before the West Bengal Sales Tax Act, 1994 came into force. Therefore, in terms of Sub-section (2) of Section 106 and Clause (u) of Section 107 of the 1994 Act the impugned penalty proceeding ought to have been initiated under Section 5B of the 1941 Act ; but we find that the Assistant Commissioner as well as the Deputy Commissioner in their orders in the penalty proceedings and the revision, respectively, have referred to Section 78 of the 1994 Act. But this alone does not vitiate either of the proceedings. Section 5B of the 1941 Act and Section 78 of the 1994 Act are identical. Since the provisions are identical and both the officers were competent on the concerned dates to exercise their jurisdiction under Section 5B of the 1941 Act, the inadvertent mention of Section 78 of the 1994 Act will not invalidate the orders which not being inconsistent with the provision of Section 5B, can be read as made under Section 5B of the 1941 Act.
19. Having considered all these aspects we find no ground to interfere with the impugned order of the Deputy Commissioner. Hence, the present application is dismissed. However, we make no order as to costs. The interim order dated February 23, 1996 restraining the respondents from realising the penalty amount of Rs. 70,000 is hereby vacated. Rs. 35,000 if deposited in terms of the order dated February 23, 1996 may be adjusted against the penalty imposed.
L.N. Ray, Chairman
20. I agree.
M.K. Kar Gupta, Technical Member
21. I agree.
22. Mr. S.N. Dey, learned advocate for the applicant, prays for a stay of operation of the judgment and order for 12 weeks so that the applicant can move the Supreme Court of India. Mr. M.C. Mukhopadhyay, learned State Representative, opposes the prayer for stay. After hearing both sides it is directed that realisation of balance Rs. 35,000 as penalty be stayed for eight weeks from now.