TMI Blog1996 (7) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... , has also been referred in Reference Applications Nos. 8 to 15 of 1984. This question reads as under: "Whether in the facts and circumstances of the case, the construal of the words 'on the basis of return' made by the Supreme Court of India in the case of A.C.C. Ltd., Rajasthan [1981] 48 STC 466 as 'on the basis of a true and proper return which ought to have been filed' has been correctly applied by the Tribunal for construal of the words 'according to such returns' occurring in section 10(4) of the Punjab Act; and if the answer be in the negative, then the effect thereof on the liability of the assessee to pay interest under section 11-D." The assessee runs a spinning and weaving mill and is a registered dealer under the Punjab General Sales Tax Act, 1948 (hereinafter referred to as "the Act"). Returns for certain periods were not filed, nor any tax was paid. Action was taken by the assessing officer for the imposition of penalty as well as levy of interest as under: 1.. Reference No. 5 of 1984: Relates to penalty imposed under section 10(6) of the Act for three months, October to December, 1979. 2.. Reference No. 6 of 1984: Relates to penalty imposed under section 9( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of tax due from him under the Act according to the returns. Penalty as well as interest were computed on the basis of the assessed tax. The assessee challenged the imposition of penalty as well as the charging of interest before the Deputy Excise and Taxation Commissioner (Appeals) as also before the Sales Tax Tribunal but failed. On applications filed by the assessee under section 22(1) of the Act, the Tribunal referred identical questions in respect of the imposition of penalty under section 10(6) of the Act and in connection with the levy of interest under section 11-D of the Act. Section 10 of the Act lays down the scheme for furnishing the returns as well as the payment of tax by a dealer. Sub-section (1) of section 10 requires that tax payable under the Act shall be paid on such intervals as may be prescribed. Under sub-section (2), a lump sum amount may be required to be paid by way of compensation under orders of the Commissioner. A dealer is required to furnish returns, as may be prescribed under sub-section (3). Tax is to be paid under sub-section (4) as is due under the Act. A receipt showing the payment of tax is to be filed along with return under this sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. Second, the receipt showing the payment of tax shall be filed along with the return. The assessee's plea was that no tax was paid inasmuch as no return was filed and, therefore, no tax could be said to be due from him under the Act according to the returns. Sub-section (6) of section 10 provides for the imposition of penalty where a dealer failed to pay the amount of tax due from him under the Act in accordance with the return. Sub-section (6) of section 10 of the Act reads as under: "(6) If a dealer fails to pay in the manner laid down in sub-section (4), the amount of tax due from him under the Act in accordance with the returns or revised returns submitted by him under sub-section (4) or sub-section (5), as the case may be, the Commissioner or any other person appointed to assist him under sub-section (1) of section 3, may after giving such dealer reasonable opportunity of being heard, direct him to pay, by way of penalty, in addition to the amount of tax due from him, a sum not exceeding one and half times but not less than ten per centum of the amount of tax to which he is assessed or is liable to be assessed on the basis of such returns or revised returns excluding such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (4) of section 10. Here, "tax due" is relatable to the amount which arises from the return furnished by the dealer. Reference to sub-section (4) of section 10 in subsection (1) of section 11-D makes it clear that "tax due" has relevance to the tax ascertained by the dealer on the basis of the return furnished under subsection (3) of section 10 of the Act. A similar question came to be examined by the Supreme Court in State of Rajasthan v. Ghasilal [1965] 16 STC 318. That was a case where the dealer had not deposited tax under the Rajasthan Sales Tax Act, 1954. Penalties were imposed under section 16(1)(b) of the said Act on the ground that the assessee had without reasonable cause failed to pay the tax due within the time allowed. Section 7(2) of the said Act required every dealer to deposit the full amount of tax due on the basis of the return in the Government treasury or the bank concerned and also to file the receipt along with the return. Since the dealer had not paid the tax, it was treated to be a breach of clause (b) of section 16(1) of the Rajasthan Sales Tax Act. It was held that no penalty could be levied under clause (b) of section 16(1) inasmuch as no tax cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 7 of the Rajasthan Sales Tax Act was clearly relatable to the information furnished in the return. Liability to pay interest under section 11-B of the said Act accrued where the dealer furnished returns but failed to pay the tax as per the said returns or within the time allowed or where a dealer had furnished a revised return under section 7(3) whereunder the amount of tax payable was larger than that already paid. It was observed that there cannot be noncompliance of section 7(2) unless a return was filed without depositing the tax due on the basis of the return. The expression "tax payable" under sub-sections (2) and (2-A) of section 7 is the full amount of tax due which is payable on the turnover shown in the return. It may be noticed that provisions of section 7(2) of the Rajasthan Sales Tax Act are pari materia with section 10(4) of the Act. Sub-section (2) of section 7 of the Rajasthan Sales Tax Act reads as under: "7. Submission of returns.-(1)................. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der subsection (5) of section 11 by making a best judgment assessment for determining tax payable by the dealer. Penalty could be then imposed if the dealer failed to pay the tax within the specified time. Sub-section (2) of section 11-D of the Act provides for charging of interest where the amount of tax is not paid by a dealer after assessment. This sub-section, therefore, contains a distinct provision for the levy of interest where tax is not paid after the service of demand notice issued by the Assessing Authority. In this light, sub-section (1) of section 11-D assumes significance because, under that sub-section, interest could be charged where tax is not paid as required by subsection (4) of section 10. Sub-section (1) of section 11-D is attracted only where tax is not paid on or before the date of the furnishing of the return. No tax becomes due under sub-section (4) of section 10 till the return is filed. There is no violation of section 10(4) of the Act unless the return is filed without paying the amount of tax as per the return. Tax is either due when it is ascertained by the assessee in the return filed under sub-section (3) of section 10 or is ascertained by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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