TMI Blog1997 (7) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... uld upset or even impair the purpose in introducing Section 10A in the Act. The return to be filed by the dealer is the full and correct return as referred to in Section 10 and on failure to furnish such a return the liability to pay interest from the prescribed date would arise when assessment is completed. Appeal dismissed. - Civil Appeal No. 1902 of 1990, & 1904-1908 of 1990, - - - Dated:- 8-7-1997 - S.C. Sen and K.T. Thomas, JJ. Civil Appeal No. 4989 of 1991, Civil Appeal No. 879, Civil Appeal No. 2905 of 1992, Civil Appeal No. 4704 of 1994, Civil Appeal No. 4196, Civil Appeal No. 11188 of 1995, Civil Appeal No. 12638, Civil Appeal No. 11513, Civil Appeal No. 15514, Civil Appeal No. 15367, Civil Appeal No. 15583, Civil Appeal No. 15584, Civil Appeal No. 15585, Civil Appeal No. 15586, Civil Appeal No. 15587, Civil Appeal No. 15588, Civil Appeal No. 15589, Civil Appeal No. 15590, Civil Appeal No. 15591, Civil Appeal No. 15593, Civil Appeal No. 15594, Civil Appeal No. 15595 of 1996, N.S. Hegde, Senior Advocate (Dillip Sinha, J.R. Das, K.R. Saha and D. Krishna, Advocates, with him), for the respondents in all the appeals. Surya Kant, Advocate, for the appellant in C.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment from collecting such tax on the turnover, but ultimately the writ petitions were dismissed. Thus, liability of the appellants to pay tax on the turnover became conclusive and appellants remitted the tax amount accordingly. But in the meanwhile, Government of West Bengal introduced yet another provision as Section 10A in the Act by which interest at the rate of 2% per month was charged on the tax amount payable by the dealer during the period of default. So demands were made on the appellants to pay interest on the tax amount. 3.Appellants disputed their liability to pay such interest mainly on two grounds. First is that since appellants have furnished the returns and paid full tax as per such returns they are not liable to pay interest under Section 10A of the Act. Second is, even otherwise they are not liable to pay interest on the tax amount as its non-recovery was the effect of the injunction order granted by the High Court. 4.West Bengal Taxation Tribunal, before which the appellants challenged the demand for payment of interest, dismissed the petitions filed by the appellants. For considering the contention of the appellants a perusal of Section 10A is necessary. Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of such assessment after giving the dealer an opportunity of being heard. (3) Where a dealer fails to make payment of any tax payable after assessment by the date specified in the notice issued under sub-section (3) of Section 11 for payment thereof, he shall pay a simple interest at the rate of two per centum for each English calendar month of default from the first day of the month next following the date specified in such notice up to the month preceding the month of full payment of such tax or up to the month preceding the month of full payment of such tax or upto the month preceding the month of commencement of proceedings under sub-section (4) of Section 11, whichever is earlier, upon so much of the amount of tax payable by him according to such notice as remains unpaid at the end of each such month of default." 5.It must be pointed out at the outset itself that nobody has a case that appellants are liable to pay interest by virtue of sub-section (3) thereof. Learned counsel for the appellants, however, contended that neither are they liable to pay interest under the other two sub-sections because the situation envisaged in either of them was non-existent. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tax liability he cannot be considered a defaulter in furnishing the return. In support therefore, learned counsel pleaded for an interpretation which is less onerous to the assessee. 10.The State is empowered by the legislature to raise revenue through the mode prescribed in the Act so the State should not be the sufferer on account of the delay caused by the tax payer in payment of the tax due. The provision for charging interest would have been introduced in order to compensate the State (or the Revenue) for the loss occasioned due to delay in paying the tax [vide Commissioner of Income Tax (A.P.) v. M. Chandra Sekhar - 1985 (1) SCC 283 and Central Provinces Manganese Ore Co. Ltd. v. Commissioner of Income Tax - 1986 (3) SCC 461]. When interpreting such a provision in a taxing statue a construction which would preserve the purpose of the provision must be adopted. It is well-settled that in interpreting a taxing statute normally, there is no scope for consideration of principles of equity. It was so said by Rowlatt J. in Cape Brandy Syndicate v. Inland Revenue Commissioners [1921 (1) KB 64 at page 71] : "In a taxing Act one has to look merely at what is clearly said. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the sale of cement as per a Cement Control Order) did not form part of the sale price for the purpose of payment of sales tax. That contention was rejected by the Court in Hindustan Sugar Mills Limited v. State of Rajasthan Ors. [1978 (4) SCC 271]. On the strength of the said decision M/s. J.K. Synthetics Ltd. was required to pay sales tax on the sale price inclusive of the freight. The dispute then arose whether the company should pay interest from the date of filing of the returns or only from the date of determination of tax payable in the final assessment. Revenue then contended that interest became payable from the date on which the original return was filed under Section 7(2) or 7(2A) of the Rajasthan Sales Tax Act. The said contention was based on another earlier decision of a Bench of three Judges of this Court in Associated Cement Company Ltd. v. Commercial Tax Officer [1981 (48) STC 466]. A majority of judges held in that case that interest would run from the date of filing of returns. Ahmadi J. (as His Lordship then was) speaking for the Constitution Bench in J.K. Synthetics Ltd. held thus : "When Section 11B(a) uses the expression `tax payable under sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly ended up in upholding of its validity. Hence, there was no question of the assessee waiting for the determination and the turnover as there was no dispute on that aspect. The fact that appellants questioned the constitutional validity of the charging provision cannot be equated with a dispute whether the freight paid would also form part of the sale amount. It was a highly debated dispute whether price amount would envelope the freight charges paid by the dealer and until the controversy was resolved by the Court in Hindustan Sugar Mills Ltd. v. The State of Rajasthan [1978 (4) SCC 271] the dealers were justified in excluding the freight charges from sale price. It was for that reason the Constitution Bench refrained from mulcting the tax payer with liability to pay interest additionally. Appellants in these cases have never disputed that they are liable to pay tax on the turnover under Section 6B of the Act even while they focussed on the vires of that provision. 16.The tax amount which they should have paid as per Section 6B remained with the appellant during the entire period and they would have earned good profit with that amount. The State, to which the tax amount should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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