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2019 (1) TMI 1156 - HC - VAT and Sales TaxLiability of Interest on suo-moto payment of tax before assessment proceedings treating the payment of tax being the tax payable as per return - Section 70 of the Madhya Pradesh Commercial Tax Act, 1994 - Held that:- The liability of interest arises in the event which find mention in Sub-section (i), (ii) & (iii) of Clause (a) of Sub-section (4) of Section 26 of the Act. In other words, where an Assessee fails to file return (which includes revised return) and pay tax within the period prescribed, he is liable to pay interest on the delayed return and payment of tax by operation of law - Similarly, when the interest under Clause (a) of Sub-section (4) of Section 26 is not paid within the period prescribed, the Assessee is liable to pay penalty under Clause (b) of Sub-section (4) of Section 26 of the Act. In the present matter it is not the case of the Assessee that he was not liable to pay the tax and that the liability has accrued subsequently. On the contrary one of the ground in Appeal by the Assessee is that the interest and penalty was imposed thereon is high and excessive acted promptly and indicated his bonfide in making payment of tax on being known his liability on the assessment of the preceding year; which establishes the fact that the Assessee was aware of his liability to file return and pay tax on taxable items. Since the same was not paid within the prescribed period, subsequent deposit of tax, i.e. after the prescribed period will not, in our considered opinion, absolve the Assessee from payment of interest and consequential penalty irrespective of the fact that assessment proceedings were initiated after such deposit. Thus, the Appellate Board was not justified in holding that no interest is payable on suo-moto payment of tax before assessments proceedings. The Appellate Board committed patent error in construing the payment of tax after the prescribed period as the tax paid within prescribed period.
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