Kamal Auto Industries Vs. Commercial Taxes Officer - Court Judgment

Excerpt:
rajasthan sales tax act, 1954 - sections 11-b and 16(1)(b)--interest--payment of--section 16(1)(b) is deleted--held, interest is to be paid from date on which tax was to be paid until tax was paid whatever period less or more than one month.;now section 16(1)(b) has been deleted and under the new section 11-b interest has to be paid from the date on which the tax was to be paid until the date of payment of tax. this provision no where makes any reference to month or less than a month. whatever may be the period for which the payment is delayed, either less than one month or more, the rate of interest, which is payable has been specified.;revision dismissed - - interest on failure to pay tax, fee on penalty--(a) if the amount of any tax payble under sub-section (2) and (2a) of section 7 is not paid within the period allowed, or (b) if the amount specified in any notice of demand whether for tax, fee, or penalty is not paid within the period specified in such notice, or in the absence of such specification, within 30 days from the date of service of such notice, the dealer shall be liable to pay simple interest on such amount at one per cent per month from the day commencing after the end of the said period for a period of three months and at one and a half per cent per month thereafter during during the time he continues to make default in the payments. interest on failure to pay tax, fee or penalty--(1)(a) where any registered dealer or any other dealer has furnished returns but has not pad the tax as per return or within the time allowed by or under the provisions of this act, he shall be liable to pay interest on the whole or that part of the amount of tax which was not paid as per returns within the time as aforesaid, at rate of one and a quarter per month from the date by which he was required to pay the tax by or under the provisions of this act for a period of three months and at one and a half per cent per month thereafter until the date of payment. -(1) if any person 'a)-has without reasonable cause failed to pay within the time allowed, any tax, fee or penalty, the assessing authority may direct that such person shall pay by way of penalty (ii) in cases referred to in clause (b), in addition to the amount payable (1) one percent of the amount of tax, fee or penalty for each complete month for the first three months after the last date by which he should have paid such amounts;mohini kapoor, j.1. this revision petition is directed against the order dated 17th may, 1985, passed by the sales tax tribunal aimer the short question which comes for interpretation is whether interest under section 11-b of the rajasthan sales tax act, 1954 (here in after referred to as the act) could be levied for the period 1-4-1979 to 31-3-1980, when the delay in depositing the tax is less than 30 days?2. the assessing authority directed the petitioner to deposit interest for the aforesaid period by his order dated 23rd may, 1983. the dealer's appeal before the deputy commissioner (appeals) was dismissed by order dated 3rd december, 1983. he preferred an appeal before the board of revenue and a single member accepted his appeal on 3rd february, 1984, and held that the interest was not leviable under section 11-b of the act when the delay in deposit was of less than one month. the department preferred a special appeal, which was transferred to the sales tax tribunal on the formation of the same and this appeal has been accepted by the impugned order. the learned tribunal has considered in detail the provisions of section 11-b of the act as they stood after the amendment of 5th april, 1979, in comparison with the provisions of the income tax act and rules, while considering the difference between 'per month and 'every month'. it held that direction to pay interest at a particular rate per month from the date the tax was required to be paid until the date of payment does not mean that the delay in deposit of tax should be of more than 30 days before the interest becomes leviable on the amount due.3. section 11-b of the act was amended with effect from april 5, 1979 and in order to appreciate the difference in the law as it stood prior to the amendment and after it, the relevant portions of the old and new section 11-b of the act may be reproduced.old 11-b. interest on failure to pay tax, fee on penalty--(a) if the amount of any tax payble under sub-section (2) and (2a) of section 7 is not paid within the period allowed, or (b) if the amount specified in any notice of demand whether for tax, fee, or penalty is not paid within the period specified in such notice, or in the absence of such specification, within 30 days from the date of service of such notice, the dealer shall be liable to pay simple interest on such amount at one per cent per month from the day commencing after the end of the said period for a period of three months and at one and a half per cent per month thereafter during during the time he continues to make default in the payments.new 11-b. interest on failure to pay tax, fee or penalty--(1)(a) where any registered dealer or any other dealer has furnished returns but has not pad the tax as per return or within the time allowed by or under the provisions of this act, he shall be liable to pay interest on the whole or that part of the amount of tax which was not paid as per returns within the time as aforesaid, at rate of one and a quarter per month from the date by which he was required to pay the tax by or under the provisions of this act for a period of three months and at one and a half per cent per month thereafter until the date of payment.4. the learned counsel for the petitioner has contended that the law as it stood prior to the amendment in respect of the liability to pay interest, when the period of default is less than one month, has not been changed by the amendment, and when the earlier section 11-b has been interpreted by this court to mean that interest is not payable when the period of default is less than 30 days, then the same interpretation should be given to the new provision as it has not made any change in the law. a division bench of this court in sales tax reference petition no. 226 of 1980 and 259/1930, decided on 1-8-1985, has held that 'old section 11-b of the act can be interpreted in two different ways but in view of the long string of decisions of the board of revenue existing over a long period of almost ten years and more panicularly in view of the fact that this provision has been amended which is materially different from the earlier provisions of that section, it would not be proper to take a different interpretation of the provisions of section 11-b as, it then existed, more than six years after its repeal and substitution by new provisions.'5. in view of this pronouncement it becomes clear that the earlier view of the board of revenue as regards the earlier provision of section 11-b of the act has been accepted and it has been held that the interest for a period less than one month is not chargeable but this decision though not particularly a decision on the new section 11-b has commented on the new provisions which has been changed from what it was earlier. according to the learned counsel for the petitioner the division bench decision had not actually interpreted the new section 11-b and it should be done now and when the intention and meaning of both the earlier and the new provision is similar then the now section 11-b should also be held to be that interest can be required to be paid only when the default in payment of interest is more than one month. the learned counsel for the non-petitioner has on the other hand analysed section 11-b, as it stands after the amendment, so as to mean that the liability to pay interest arises when the tax is not paid as per returns or within the time allowed by the provisions of the act from the date by which he was required to pay the tax until the date of payment. the earlier provision was that interest becomes payable from the day commencing after the date by which the tax was to be deposited during the time he continues to make default in payment.6. my attention has also been drawn to section 16 of the act, section 16(1)(b) of the act as it stood prior to the amendment made with effect from may 2, 1969 was as under:16. offences, penalties and prosecutions, etc.-(1) if any person 'a)-has without reasonable cause failed to pay within the time allowed, any tax, fee or penalty, the assessing authority may direct that such person shall pay by way of penalty (ii) in cases referred to in clause (b), in addition to the amount payable (1) one percent of the amount of tax, fee or penalty for each complete month for the first three months after the last date by which he should have paid such amounts; and (2) one and one half per cent of the amount of tax, fee or penalty for each complete month thereafter during the time he continues to make default in the payments.7. this provision under section 16 has now been deleted and the idea of levying penalty only in case when the default is of a complete month has been changed and provided for the amended section 11-b of the act. according to him penal interest in case of delay in deposit of tax is payable from the date by which the tax was required to be paid until the date it is actually paid irrespective of the fact, whether it is a complete month or more than a month or not.8. first of all it is to be seen as to what is the change in the law on account of amendments made in sections 11-b and 16(1)(b) of the act. the earlier provision provided for liability to pay interest from the day commencing after the end of the period within which the tax was to be deposited and thereafter during the time the assessee continued to make default in payment. this was read in conjunction with the provisions of section 16 (old), which provided for penalty and prosecution etc. and says that the penalty would be levied where the default in payment was for each complete month. the two provisions were read together in order to hold that the interest was payable only when the delay in deposit of tax was of more than a month. now section 16(1) (b) has been deleted and under the new section 11-b, interest has to be paid from the date on which the tax was to be paid until the date of payment of tax. this provision no where makes any reference to month or less than a month. whatever may be the period for which the payment is delayed, either less than one month or more, the rate of interest, which is payable has been specified. by saying the rate payable per month the reference is to the rate and not to the period for which the interest is to be paid. the manner of calculation of interest and the rate at which it is to be calculated is different from the period for which the interest is payable and the two cannot be mixed together. the new provision of section 11-b is unambiguous and conveys in no uncertain term from which day the interest becomes payable and until which day it is to be paid. when it has been specifically mentioned that interest is payable from one day to another then the interest becomes payable for this duration even if this period is shorter than one month.9. in the division bench decision cited above, it has been observed with reference to the new sub-section (1) of section 11-b that if a dealer has not paid the tax as per the return or within the time allowed, he is liable to pay interest on the whole or that part of the amount of tax, which has not been paid as per the return at specified rate from the date he required to pay the tax until the date of payment of tax. their lordships were of the opinion that the new law has made it specific that interest was payable not for a complete month but for even a lesser period and this in my view is the correct interpretation.10. to hold that interest, on account of delay in deposit of tax is payable only if the delay is of more than one full month, would amount to a further period of grace of 29 days without any penalty in the form of interest, after the period within which he has to deposit the tax, is over. there is no provision in the act, by which such an interpretation should be put on the provision of section 11-b of the act as it now stands. the assessee cannot be allowed a further period to deposit the tax without any penalty in the form of interest, when the period within which he has to deposit the tax has come to an end. he is liable for the consequences as provided in section 11-b, where the delay in deposit of the tax is whether of a complete month or less than that.11. in my view, the learned tribunal has considered all the contentions raised on behalf of the dealer and have arrived at a correct conclusion of the law, which exists after 1969. the intention of the legislature in amending section 11-b is very clear and there is no scope for the contention that interest is payable only when the delay is for a period of one full month or more.12. there is no force in this revision and it is accordingly dismissed.