KHEMKA & CO. vs STATE OF MAHARASHTRA

The Supreme Court held that Section 9(2) of the Central Sales Tax Act, 1956, empowers state authorities to assess and collect taxes on behalf of the Government of India, but does not permit the imposition of penalties under state sales tax laws for defaults in payment of central sales tax. The Court affirmed that the Central Sales Tax Act is a self-contained code with specific provisions for penalties, and thus, the imposition of penalties under Section 16(4) of the Bombay Sales Tax Act for delays in central tax payments is unauthorized. The appeal was allowed, confirming the Mysore High Court's ruling that such penalties are ultra vires.