TMI Blog1998 (11) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... the State of Gujarat where it has a factory at Jamnagar and further divisions at important centres in the State of Gujarat. The period of taxation in respect of which present controversy has arisen is in respect of turnover between July 1, 1980 to July 30, 1981. For this period, the petitioner had submitted quarterly returns as required under the provisions of the Act, and has paid the tax at prescribed intervals in accordance with the declarations and returns submitted by him. According to the applicant no purchase tax was payable by it on chicory roots which was purchased from the agriculturists who were not registered dealers. On the premise of this claim, the applicant claimed deduction of such purchases from this taxable turnover and did not pay the purchase tax on such purchases at the time of filing return. This plea of the assessee was supported by decision of Tribunal rendered in the case of Paglam Traders v. State of Gujarat on September 29, 1976. The assessment was framed originally on March 17, 1983. The assessing officer did not accept the claim of the assessee as to immunity from payment of purchase tax on chicory roots as by that time Tribunal has changed its earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act. 6.. It will therefore be appropriate in the first instance to consider the provisions of the Gujarat Sales Tax Act itself before adverting to the ratio laid down by the Supreme Court in the aforesaid cases. Section 47 reads as under: Payment of tax, etc.-(1) Tax shall be paid in the manner herein provided, and at such intervals as may be prescribed. (2) A registered dealer furnishing declarations or returns as required by sub-section (1) of section 40, shall first pay into a Government treasury, in the manner prescribed the whole amount of tax due from him according to such declaration or return along with the amount of any penalty payable by him under section 45. (3) A registered dealer furnishing a revised declaration or revised return in accordance with sub-section (3) of section 40 which revised declaration or revised return shows that a larger amount of tax than already paid is payable, shall first pay into a Government treasury the extra amount of tax. (4)(a) The amount of tax- (i) due where declarations or returns have been furnished without full payment therefor, or (ii) assessed or reassessed for any period under section 41 or section 44 less an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t treasury the whole amount of tax due from him according to such declaration or return. Sub-section (3) envisages the contingency in case a registered dealer furnishes revised declaration or returns under section 40(3) of the Act showing a larger amount of tax payable by him than what was originally shown in the returns furnished under section 40(1) of the Act, and that larger amount is payable by him, he shall deposit the additional amount according to revised return before filing it. All the three sub-sections (1), (2) and (3) deal with obligation of the assessee to pay tax at stage prior to furnishing of return. The liability to pay tax under these three sub-sections is as per assessee s own assessment of his taxable turnover and tax payable on that basis. Sub-section (4) of section 47, as the language clearly indicates relates to the obligation of the assessee to pay tax posterior to filing of return. It envisages where a return has been filed but without full payment of tax as per returns or on assessment or reassessment for any period, it is found that the assessee has paid tax lesser than what is payable as per assessment or reassessment, as the case may be, such amount sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to exercise suo motu power to revise the order of original assessing authority. In other words requirement to pay tax at the time envisaged under sub-sections (1), (2) and (3) is not that assessee is required to pay as per final assessment. Thus obligation of the assessee to pay tax until filing of the declaration, return or revised declaration or revised return is entirely on the basis of self-assessment. Sub-section (4) concerns nonpayment of tax after return has been filed. It may be seen that law enjoins payment of tax in accordance with return before filing of the return and not after filing of return. In the event assessee has not paid full tax or part of tax as per return or revised return, he commits a breach of sub-section (2) or (3), as the case may be, as obligation to pay had arisen as per return and that obligation does not cease on filing of return. If he is assessed to tax at a larger sum than as per the return, the time allowed to pay such tax is as specified in the notice of demand which cannot be less than 30 days from the date of service of notice. Any payment in pursuance of assessment before the expiry of such period specified in notice is a payment made withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid tax as per return/declaration filed by him. In such event, default under subsection (2)/(3), as the case may be, comes into existence and the assessee becomes liable to pay interest under sub-section (4-A) for default of sub-section (2) or (3) of section 47. So far as sub-clause (ii) of sub-section (4) is concerned, it envisage a situation where as a result of assessment, tax payable is found to be more than tax paid by the assessee. Such amount of tax, as it exceeds the amount of tax payable under return, does not become payable by the assessee at any time before assessment is made, but becomes payable by the assessee only on service of a notice of demand specifying a date by which payment is to be made. Such date cannot be specified earlier than 30 days from the date of service of notice, that is to say, a tax becoming payable as a result of assessment after adjusting the amount of tax already paid, is to be paid by the assessee within the period (not less than 30 days from the date of service of notice) in the notice of demand. If payment is made within that time the payment is considered within the time allowed, no interest liability is envisaged on amount of tax, if paid, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms in the prescribed manner and within the prescribed time with the assessing authority. Sub-section (2) of section 7 required that return shall be accompanied by a treasury receipt or receipt of any bank evidencing deposit of full amount of tax on the basis of return. Sub-section (2-A) of section 7 empowered the State Government to notify requiring any dealer or class of dealers specified in such notification to pay tax at intervals shorter than those prescribed under sub-section (1) and in such cases, the proportionate tax on the basis of last return was required to be deposited at the intervals specified in the said notification in advance of the return. Sub-section (3) of section 7 envisaged that if any dealer discovers any omission, error or wrong statement in any return furnished by him he may furnish revised return in the prescribed form and in the prescribed manner before the time comes for submission of the next return but not later. Section 11B(a) provided if the amount of any tax payable under sub-section (2) of section 7, that is to say, as per return which is to be accompanied by payment of tax, and sub-section (2A) of section 7, that is to say, as per the intervals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest on default in payment of tax within time allowed under the Act. Firstly clause (a) provides liability to pay interest in the case of default in payment of tax in time at regular intervals as required under subsection (2-A) of section 7 or on failing to pay tax at the time of filing of return in accordance therewith. This provision has similarity with the provisions of subsection (4-A) of section 47 of the Gujarat Act about liability of assessee to pay interest on non-payment of tax by the date it is required to be paid under subsections (1), (2) and (3) of section 47. Clause (b) of section 11B deals with requirement of assessee to pay tax on assessment by serving a notice of demand specifying a date by which such demand is to be paid and non-payment of such demand by such specified date follows with the liability to pay interest on expiry of such date. This provision corresponds to sub-section (4) read with liability to pay interest in default of payment of tax within date specified in notice of demand as per assessment or reassessment, under sub-section (4-A) of section 47 of the Gujarat Act. 12.. We are therefore of the opinion notwithstanding that the two legislations e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch ought to have been filed tallying with final assessment. 15.. Bhagwati, J., in his dissenting judgment, opined: 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 fails to comply with any requirement of the provisions of the State Act, the requirement under sub-section (2) of section 7 being to deposit the full amount of tax due on the basis of return, shall be liable to penalty in a sum not exceeding Rs. 1,000 and in the case of continuing default, a further penalty not exceeding Rs. 50 for every day of such continuance . This is a consequence which it is difficult to believe co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retation 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 provisions of a statute and gives full meaning and effect to both. Therefore, on this principle of interpretation also the construction canvassed on behalf of the Revenue cannot be accepted, as it would create a direct conflict between the provisions of clauses (a) and (b) of section 11B. The only way in which clauses (a) and (b) of section 11B can be read harmoniously and full meaning and effect can be given to them is by construing them as dealing with distinct matters or situations. The tax payable under sub-section (2) of section 7 dealt with in clause (a) of section 11B cannot, therefore, be equated with the amount of the tax assessed forming the subject-matter of clause (b) of section 11B and hence it must be held to be tax due on the basis of the return actually filed by the assessee and not on the basis of a correct and proper retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et his statutory obligation under section 7. It is not possible to visit the assessee who pays the tax which according to him is due on the basis of the information supplied in the return filed by him with the liability to pay interest under clause (a) of section 11B. The law did not envisage the assessee to predict the final assessment when he filed the return and expect him to pay the tax on that basis to avoid the liability to pay interest. The court further held: That the appellant was not liable to pay interest under section 11B (as it stood prior to its substitution in 1979) on the additional sales tax from the date on which the original returns were filed but interest had to be paid only for the period subsequent to determination of sales tax under the final assessment after the expiry of the period allowed under the notice of demand. 17.. The ratio fully supports the conclusion to which we have reached under the scheme of the Gujarat Sales Tax Act, independently. 18. Learned counsel for the Revenue also urged that return filed by the assessee were not bona fide inasmuch as the decision of the Tribunal on which the assessee had relied on for claiming exemption, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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