TMI Blog1981 (10) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. S.T. Desai, Senior Advocate (B.D. Sharma, Advocate, with him), for the respondents. -------------------------------------------------- The judgment of SEN and VENKATARAMIAH, JJ., was delivered by VENKATA- RAMIAH, J. BHAGWATI, J., delivered a separate judgment. VENKATARAMIAH, J.- The assessee, M/s. Associated Cement Companies Limited, has filed this appeal by special leave under article 136 of the Constitution against the orders dated January 30, 1980, passed by the Commercial Tax Officer, Special Circle, Kota, in the State of Rajasthan, imposing on it a penalty of Rs. 53,335 under section 7AA of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Act"), and levying interest under section 11B of the Act amounting to Rs. 85,910.50 and a further penalty of Rs. 1,34,205 under section 7AA of the Act read with section 9(2) of the Central Sales Tax Act and levying interest of Rs. 2,07,174 under section 11B of the Act read with section 9(2) of the Central Sales Tax Act in respect of the assessment year 1974-75. The circumstances under which the above orders came to be passed are these: The assessee has a cement manufacturing factory in the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was levied under section 7AA of the Act read with section 9(2) of the Central Sales Tax Act for the delay in depositing the tax payable in respect of the freight charges and interest of Rs. 2,07,174 was levied under section 11B of the Act read with section 9(2) of the Central Sales Tax Act. In this appeal, we are only concerned with the correctness of the impugned orders in so far as they levy penalty and interest. The first question canvassed before us relates to the levy of penalties on the assessee under the two assessment orders for not paying the sales tax payable under the Act and under the Central Sales Tax Act in respect of the freight charges which were declared as components of sale price by this Court in Hindustan Sugar Mills' case(1) on August 22, 1978. The explanation of the assessee for not including the freight charges in the taxable turnover was, as mentioned earlier, that there was a doubt about its liability to pay sales tax thereon as the very same question was pending adjudication before this Court and that on the facts and in the circumstances of the case, the assessee could not be held guilty of filing false returns before the assessing authority. It was pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of returns.-(1) Every registered dealer, and such other dealer, as may be required to do so by the assessing authority by notice served in the prescribed manner, shall furnish prescribed returns, for the prescribed periods, in the prescribed forms, in the prescribed manner and within the prescribed time to the assessing authority: Provided that the assessing authority may extend the date for the submission of such returns by any dealer or class of dealers by a period not exceeding fifteen days in the aggregate. (2) Every such return shall be accompanied by a treasury receipt or receipt of any bank authorised to receive money on behalf of the State Government, showing the deposit of the full amount of tax due on the basis of return in the Government treasury or bank concerned. (2A) Notwithstanding anything contained in sub-section (2), the State Government may by notification in the official Gazette require any dealer or class of dealers specified therein, to pay tax at intervals shorter than those prescribed under sub-section (1). In such cases, the proportionate tax on the basis of the last return shall be deposited at the intervals specified in the said notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed time furnishing necessary particulars regarding his turnover. The proviso to sub-section (1) of section 7 of the Act authorises the assessing authority to extend the date for the submission of such returns by a period not exceeding 15 days in the aggregate. Sub-section (2) of section 7 of the Act insists that every such return shall be accompanied by a treasury receipt or receipt of any bank authorised to receive money on behalf of the State Government showing the deposit of the full amount of tax due on the basis of return in the State Government treasury or bank concerned. Sub-section (4) of section 7 of the Act, it may be noticed, provides that every deposit of tax made under sub-section (2) shall be deemed to be provisional subject to necessary adjustments in pursuance of the final assessment of tax made for any year under section 10. Clause (a) of section 11B of the Act authorises the levy of interest on the amount of tax not paid in accordance with sub-sections (2) and (2A) of section 7 of the Act. The expression "prescribed" is defined in section 2(1) of the Act. It states that in the Act unless the context otherwise requires, "prescribed" means prescribed by Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is not accompanied by a receipt for the deposit of tax as required by sub-section (2) of section 7. the assessing authority shall not be bound to take any cognisance of the return." Sub-rule (1) of rule 25 of the Rules provides that the return referred to in sub-section (1) of section 7 of the Act shall be in form S.T. 5 and sub-rule (3) of rule 25 prescribes the time within which quarterly returns should be filed by a dealer. Sub-rule (4) of rule 25 of the Rules provides that if a return is not accompanied by a receipt for the deposit of tax as required by sub-section (2) of section 7 of the Act, the assessing authority shall not be bound to take any cognisance of the return. Rule 25 of the Rules which is framed under the Act should be read as a part of the Act itself in view of the express provision contained in sub-section (5) of section 26 of the Act, which declares that all rules made under section 26 shall on publication in the official Gazette have effect, as if enacted in the Act. That this should be the effect of a rule framed under a statute containing a provision similar to the provision in section 26(5) of the Act can be gathered from a decision of the House of Lord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinarily claimed from an assessee who has withheld payment of any tax payable by him and it is always calculated at the prescribed rate on the basis of the actual amount of tax withheld and the extent of delay in paying it. It may not be wrong to say that such interest is compensatory in character and not penal. In order to understand the case of the assessee, we may classify the registered dealers into the following different classes: (1) A registered dealer who files his return showing a higher taxable turnover than the actual turnover which is ultimately found to be taxable at the time of regular assessment and who pays tax under section 7(2) of the Act on the basis of the return. (2) A registered dealer who files a true and proper return and pays tax on the basis of such return within the time allowed. (3) A registered dealer who does not file any return at all as required by section 7(1) and pays no tax under section 7(2) of the Act. (4) A registered dealer who files a true return but does not pay the full amount of tax as required by section 7(2) and (5) A registered dealer who files a return but wrongly claims either the whole or any part of the turnover as no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pressed before us on behalf of the assessee is that since section 7 of the Act does not expressly say that a registered dealer who has not filed any return or a person who has claimed that his turnover or any part thereof is not taxable and has not paid tax due in respect of such disputed turnover should also pay interest on the tax which is legitimately due to the Government but withheld by him, no interest can be claimed under section 11B of the Act in such cases. Section 7 of the Act which deals with the submission of returns is not a charging section but a machinery section. It is settled law that a distinction has to be made by courts while interpreting the provisions of a taxing statute between charging provisions which impose the charge to tax and machinery provisions which provide the machinery for the quantification of the tax and the levying and collection of the tax so imposed. While charging provisions are construed strictly, machinery sections are not generally subject to a rigorous construction. The courts are expected to construe the machinery sections in such a manner that a charge to tax is not defeated. The above rule of construction of a taxing statute has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end unattainable. Now, there are three stages in the imposition of a tax: there is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment. That ex hypothesi has already been fixed. But assessment particularises the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay." The circumstances under which the above principle was applied by this Court in Gursahai Saigal's case [1963] 48 I.T.R. 1 (S.C.); [1963] 3 S.C.R. 893., are interesting. That was a case in which an assessee who was charged with interest under sub-section (8) of section 18A of the Indian Income-tax Act, 1922, had questioned his liability to pay interest. His contention was that interest payable under sub-section (8) of section 18A of that Act had to be calculated in the manner laid down in sub-section (6) thereof. Since sub-section (6) of section 18A of the Act provided that where in any year an assessee had paid tax under sub-section (2) or sub-section (3) thereof on the basis of his own estimat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) those who have not filed any return at all and who are later on found to be liable to be assessed, (ii) those who have filed a true return but have not deposited the full amount of tax which they are liable to pay and (iii) those who have filed a return making a wrong claim that either the whole or any part of the turnover is not taxable and who are subsequently found to have made a wrong claim, would be placed in the same position and they would all be liable to pay interest on the amount of tax which they are liable to pay but have not paid as required by sub-section (2) of section 7 of the Act. We are of opinion that this view is in conformity with the legislative intention in enacting section 11B of the Act. We have carefully gone through the decision of five learned Judges of this Court in State of Rajasthan v. Ghasilal [1965] 16 S.T.C. 318 (S.C.); [1965] 2 S.C.R. 805., and we are humbly of opinion that it is distinguishable from the present case. In Ghasigal's case [1965] 16 S.T.C. 318 (S.C.); [1965] 2 S.C.R. 805., this Court was concerned with the question of sustainability of penalties imposed under the Act and not interest leviable under section 11B. The relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited till 17-12-59. This shows that the assessee withheld the tax intentionally." The Deputy Commissioner of Sales Tax (Appeals), Kotah, dismissed the appeal upholding the above penalty. Similarly on December 6, 1960, the Sales Tax Officer assessed the respondent in respect of accounting period October 23, 1957, to November 10, 1958, and imposed a penalty of Rs. 1,000 for not deposit- ing the tax in time on the same grounds. The respondent questioned the penalties in respect of the aforesaid two years before the High Court. The High Court quashed them. Against the orders of the High Court, the State of Rajasthan filed two appeals which were disposed of by this Court by the judgment rendered in the above case. The judgment of this Court depended upon the true construction of clause (b) of section 16(1) of the Act, which read: "16. (1) If any person- (a).......; or (b) has without reasonable cause failed to pay the tax due within the time allowed; or (c) has without reasonable cause failed to furnish the return of his turnover, or failed to furnish it within the time allowed; or ........................... the assessing authority may direct that such person shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest on failure to pay tax, states that if the amount of any tax payable under sub-sections (2) and (2A) of section 7 is not paid within the period allowed the dealer shall be liable to pay interest at the prescribed rate during the time he continues to make default in the payments. Section 11B(a) of the Act does not refer to any tax due. At this stage it is necessary to refer to certain legislative changes that have taken place since the decision in Ghasilal's case[1965] 16 S.T.C. 318 (S.C.); [1965] 2 S.C.R. 805., was delivered. Section 16(1)(c) as it stood then has been amended and section 7AA providing for levy of penalty for failure to furnish returns has been inserted in the Act by Rajasthan Act 11 of 1969. Section 7AA reads thus: "7AA. Penalty for failure to furnish returns.- If the assessing authority in the course of any proceedings under this Act, is satisfied that any dealer has without reasonable cause failed to furnish the return under sub-section (1) of section 7 within the time allowed, he may direct that such dealer shall pay by way of penalty, in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent of the tax, for every month d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme of taxation envisaged in the Act clearly shows that it is only when the assessment is made and specified in the notice of demand or in the absence of such specification thirty days from the date of service of such notice expires that the amount of tax as assessed becomes payable by an assessee. With great respect, we have to state that we depend upon Ghasilal's case [1965] 16 S.T.C. 318 (S.C.); [1965] 2 S.C.R. 805. itself to hold that for purposes of section 11B(a) the tax becomes payable before assessment is made by virtue of section 3 read with section 5 and sub-sections (2) and (2A) of section 7 of the Act and the Rules framed thereunder, even though, it becomes due when return is filed under section 7(2) or ascertained under section 10. That a tax can become payable even before assessment is also clear from the observations of Sikri, J. (as he then was), in Ghasilal's case [1965] 16 S.T.C. 318 (S.C.); [1965] 2 S.C.R. 805., to the effect that "Section 3, the charging section, read with section 5, makes tax payable, i.e., creates a liability to pay the tax.......... But till the tax payable is ascertained by the assessing authority under section 10, or by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of the freight charges relying upon the new section 11B which was substituted by the Rajasthan Sales Tax (Amendment) Act, 1979, in the place of section 11B which was in force during the relevant period. The relevant part of the new section 11B reads thus: "11B. 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 paid 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 the rate of one and a quarter per cent 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; (b) Where any registered dealer or any other dealer has furnished a revised return as provided under sub-section (3) of section 7, which revised return shows that amount of tax larger than that already paid is payable, such dealer shall be liable to pay interest on the excess amount of tax at such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to as the Central Act). The assessee did not include in the taxable turnover shown in the returns the amount of freight paid in respect of the goods sold under the bona fide impression that the amount of freight did not form part of the sale price and was not includible in the taxable turnover of the assessee. This impression was carried by the assessee in view of certain decisions which had been given by some High Courts as well as the Supreme Court and particularly the decision of the Supreme Court in Hyderabad Asbestos Cement Products Limited v. State of Andhra Pradesh [1969] 24 S.T.C. 487 (S.C.). The assessee paid up for each quarter the full amount of tax calculated on the basis of the return submitted by it and the receipt for such payment was filed along with the return. The amount of tax paid by the assessee obviously did not include tax on the amount of freight, since according to the assessee the amount of freight did not form part of the sale price and was accordingly not shown in the returns as forming part of the taxable turnover. Subsequently, however, the question whether the amount of freight formed part of the sale price and was therefore includible in the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration before us is whether the assessing authority was right in imposing penalty on the assessee under the two assessment orders for not depositing the tax in respect of the amount of freight at the time of filing of the original returns under the State Act and the Central Act. My learned brother Venkataramiah, J., has held, following the decision of this Court in Cement Marketing Company of India Limited v. Assistant Commissioner of Sales Tax, Indore [1980] 45 S.T.C. 197 (S.C.); [1980] 1 S.C.R. 1098., that "the levy of penalties for not including the freight charges in the taxable turnover in the original returns and for not paying the tax in respect of such freight charges is unsustainable" and that the two orders of assessment in so far as they levy penalty on the assessee are liable to be quashed and set aside. I entirely agree with the view taken by him and I do not think I can usefully add anything to what he has said. The next question that arises for consideration is whether the assessee was liable under section 11B of the State Act to pay interest on the tax in respect of the amount of freight for the period between the date of filing of the original return and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section (1), he may furnish a revised return in the prescribed manner before the time prescribed for the submission of the next return but not later. .........................." Section 11B of the State Act during the relevant period provided inter alia as under: "11B. Interest on failure to pay tax, fee or penalty. -(a) If the amount of any tax payable under sub-sections (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 the time he continues to make default in the payments: Provided that, where, as a result of any order under this Act, the amount, on which interest was payable under this section, has been reduced, the interest shall be reduced accordingly and the excess interest p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely found due; and such interest shall be payable on such amount from the date the tax first became due." When the assessment is made and the tax payable by an assessee is determined, the tax so determined does not become payable until after a notice of demand is served by the assessing authority under section 11, sub-section (2), read with rule 31 of the Rajasthan Sales Tax Rules, 1955, made by the Government of Rajasthan in exercise of the powers conferred under section 26 of the State Act and then the assessee is allowed time to make payment up to the date specified in the notice of demand and if no such date is specified, then within thirty days from the date of service of the notice. So long the assessee pays up the amount of the tax assessed within the time specified in the notice of demand or within thirty days from the date of service of the notice, as the case may be, he would not be in default and hence section 11B, clause (b), provides that the assessee would be liable to pay interest on the tax assessed only if the amount of such tax is not paid within the period specified in the notice of demand or in the absence of such specification, within thirty days from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tax due on the basis of return" in sub-section (2) of section 7 meant the full amount of tax due on the basis of a true and proper return which ought to have been filed by the assessee and not the full amount of tax due on the basis of the return actually filed and since the amount of freight was liable to be included in the taxable turnover and hence in a true and proper return, the "full amount of tax due on the basis of return" within the meaning of sub-section (2) of section 7 included the tax on the amount of freight and the assessee therefore ought to have deposited the same at the time of filing the original returns, and since the assessee failed to do so, section 11A, clause (a), was attracted and the assessee was liable under that provision to pay interest on the tax on the amount of freight which remained unpaid until the filing of the revised returns. This argument, plausible though it may seem, is in my opinion unsustainable. It is plainly contrary to the language of sub-section (2) of section 7 read with section 11B and is opposed to the scheme of the State Act. It is also inconsistent with the decision of a Bench of five judges of this Court in State of Rajasthan v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn and that would necessarily be the same as the tax assessed by the assessing authority, because what is a correct and proper return would be determinable only with reference to the assessment ultimately made. The assessment when made would show whether the return filed was correct and proper; it would be correct and proper Wit accords with the assessment made; if it does not accord with the assessment, then to the extent to which it differs it would obviously have to be regarded as incorrect and improper. The consequence of the construction suggested on behalf of the revenue would thus be that the tax payable under sub-section (2) of section 7 would be the full amount of the tax as assessed, because that would represent the tax due on the basis of a correct and proper return and the assessee would have to deposit at the time of filing the return an amount equivalent to the amount of the tax as assessed. If the assessee fails to do so, then apart from the liability to pay interest under section 11B, clause (a), the assessee would expose himself to penalty under section 16, sub-section (1), clause (n), which provides inter alia that any person, who falls to comply with any requirem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e would thus be a conflict between the two provisions, if the construction contended for on behalf of the revenue were accepted. Under sub-section (2) of section 7 read with section 11B, clause (a), the assessee would be liable to pay interest on the amount of the tax assessed to the extent to which it has not been deposited at the time of filing the return and such interest would run continuously from the date of filing of the return until payment, while under section 11B, clause (b), the assessee would not be liable to pay interest on the amount of the tax assessed during the period specified in the notice of demand or in the absence of such non-specification during the period of thirty days from the date of service of such notice. Such a conflict could never have been intended by the legislature. It is a well-settled rule of interpretation that a statute must be so construed as not to create any repugnance between its different provisions, for it is a basic assumption underlying every interpretational exercise that the legislature must be supposed not to have intended to contradict itself. The court must always prefer that interpretation which avoids repugnancy between two provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also should have been made to vary from period to period. Moreover, it is, to my mind, impossible to accept the proposition that the amount of the tax ultimately assessed, which would represent the tax due on the basis of a correct and proper return should be payable by the assessee at the time of filing the return. Under sub-section (2) of section 7. The scheme of taxation envisaged in the State Act clearly shows that it is only when the assessment is made and the period specified in the notice of demand or, in the absence of such specification, thirty days from the date of service of such notice expires that the amount of tax as assessed becomes payable by the assessee and its payment can be enforced by the revenue. What becomes payable by the assessee under sub-section (2) of section 7 is merely the tax due on the basis of the return actually filed by the assessee, that is, on the basis of self-assessment. This position seems to be clear beyond doubt on an examination of the scheme of taxation contained in the State Act and no authority is needed in support of it, but if any authority were needed, it is to be found in the decision of a Bench of five Judges of this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (2) of section 7 may be different from the tax assessed under section 10 and it cannot, therefore, obviously be the tax due on the basis of a correct and proper return (because that would necessarily be the same as the tax ultimately assessed under section 10) but must be the tax due on the basis of the return actually filed. Venkataramiah, J., has in his judgment classified registered dealers into the following five different categories: (1) A registered dealer who files his return showing a higher taxable turn- over than the actual turnover which is ultimately found to be taxable at the time of regular assessment and who pays tax under section 7(2) of the Act on the basis of the return. (2) A registered dealer who files a true and proper return and pays tax on the basis of such return within the time allowed. (3) A registered dealer who does not file any return at all as required by section 7(1) and pays no tax under section 7(2) of the Act. (4) A registered dealer who files a true return but does not pay the full amount of tax as required by section 7(2) and (5) A registered dealer who files a return but wrongly claims either the whole or any part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied). I fail to understand how in the face of these observations made by a Bench of five Judges of this Court, it can ever be held that section 7, sub- section (2), is attracted even when no return has been filed. It is clear from the observations in this case-observations which have been quoted here as also in an earlier paragraph-that until the assessee files a return or the assessment is made, no tax is payable by the assessee, because "till then there is only a liability to be assessed to tax". I must therefore regretfully express my inability to accept the conclusion reached by my learned brother Venkataramiah, J., that a registered dealer falling within category (3) who does not file any return at all as required by sub-section (1) of section 7 would still be liable to pay the amount of tax and if he does not pay the same before the due date for filing the return has expired, he would be liable to pay interest under section 11B, clause (a). That would be plainly contrary to the decision in State of Rajasthan v. Ghasilal [1965] 16 S.T.C. 318 (S.C.); [1965] 2 S.C.R. 805., which, being a decision of five Judges of this Court, is binding upon us. So also with regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to take cognizance of it. The only correct way of reading sub-section (2) of section 7 and sub-rule (4) of rule 25 is that whenever a return is filed by the assessee, it must under sub-section (2) of section 7 be accompanied by receipt showing deposit of the full amount of tax due on the basis of the return and if the assessee fails to deposit the amount of the tax due on the basis of the return actually filed, the assessing authority would have the option under sub-rule (4) of rule 25 either to take or not to take cognizance of the return. If the assessing authority chooses not to take cognizance of the return, it would proceed to assess the assessee as if no return had been filed by him, but that would not relieve the assessee of the obligation attaching to him under sub-section (2) of section 7 of depositing, at the time of filing the return, the amount of the tax due on the basis of the return actually filed nor would it condone the breach of such obligation. If the assessee does not pay the full amount of the tax due on the basis of the return as required by sub- section (2) of section 7, he would be liable to pay interest under section 11B, clause (a), irrespective of whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in State of Rajasthan v. Ghasilal [1965] 16 S.T.C. 318 (S.C.); [1965] 2 S.C.R. 805., My learned brother Venkataramiah, J., has relied strongly on the decision of this Court in Gursahai Saigal v. Commissioner of Income-tax, Punjab [1963] 48 I.T.R. 1 (S.C.); [1963] 3 S.C.R. 893., but I fail to see how this decision can be of any help in the present case where section 11B, clause (a), is not at all rendered meaningless or unworkable on the construction suggested on behalf of the assessee. The assessee in that case was sought to be charged with interest under sub-section (8) of section 18A of the Indian Income-tax Act, 1922, which provided that "where, on making the regular assessment, the Income-tax Officer finds that no payment of tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub-section (6) shall be added to the tax as determined on the basis of the regular assessment". The argument of the assessee was that since sub-section (6) of section 18A provided that where in any year an assessee has paid tax under sub-section (2) or sub-section (3) on the basis of his own estimate and the tax so paid is less th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of sub-section (1), the Income- tax Officer may direct that a sum equal to two per cent of such tax or part thereof, as the case may be, shall be recovered from him by way of penalty for every month during which the default continues. Can it possibly be contended that these two sub-sections of section 140A refer to tax payable on the basis of a proper and correct return or in other words the tax assessed? It is obvious that these two sub-sections refer only to tax payable on the basis of self-assessment and require such tax to be paid before the filing of the return and if that is not done, the assessee becomes liable to pay penalty for every month during which the default continues. So also section 215 of the Income-tax Act, 1961, which provides for payment of interest on under-payment of advance tax does not impose liability for payment of interest in case of every deficiency but provides for payment of interest only if the advance tax paid is less than 75 per cent of the assessed tax. In the world of human affairs, it is hardly possible that the advance tax paid by the assessee or the tax payable on the basis of self-assessment would always be equivalent to the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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