Madras High Court
Godrej & Boyce Manufacturing Co. Ltd. vs Joint Commissioner Of Commercial ... on 6 October, 1994
JUDGMENT Somasundaram, J.
1. The appellant is a registered dealer under the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act") and under the Central Sales Tax Act, 1956. The appellant is a rule 18 assessee paying tax on monthly returns on the actual turnover reported. According to the appellant, while submitting the monthly return for the month of December, 1991, relatable to the assessment year 1991-92, its accountant had inadvertently reported the turnover of October, 1991, instead of reporting the turnover of December, 1991 and on the turnover so reported, it had paid the tax due by way of cheque, along with such a return. Subsequently, while filing the return for the month of January, 1992, it realised the mistake committed and accordingly filed a revised return for the actual turnover of December, 1991, on February 19, 1992 and paid the difference in tax, amounting to Rs. 20,15,601. Thereafter, it received a notice in form 29 dated March 17, 1992, from the Assistant Commissioner (CT), Central Assessment Circle I, Greams Road, Madras-6 (third respondent) levying interest of Rs. 40,312 under section 24(3) of the Act, calculated at the rate of two per cent per month on the tax due, that is to say on Rs. 20,15,601. Aggrieved by the demand so raised, a revision had been filed under section 33 before the Deputy Commissioner (CT) (North), Ajith Buildings, III Floor, Madras-6 (second respondent), who dismissed the same in his proceedings in R.P. No. 203/92 dated August 28, 1992. A further revision was filed under section 35 before the Joint Commissioner of Commercial Taxes-IV, Office of the Special Commissioner and Commissioner of Commercial Taxes, Chepauk, Madras-5 (first respondent), who in turn dismissed the same in his proceedings in D.Dis. No. JJI/116743/92 dated April 6, 1993. Aggrieved by the said orders, the appellant filed Writ Petition No. 16066 of 1993 to quash the proceedings of the first respondent dated April 6, 1993, confirming the orders of the second respondent in R.P. No. 203/92, dated August 28, 1992 - and that of the third respondent dated March 17, 1992. The learned single Judge who heard the writ petition, by order dated November 9, 1993 (Reported in [1994] 93 STC 380 (Mad)), confirmed the orders challenged in the writ petition and dismissed the writ petition. This writ appeal is directed against the order dated November 9, 1993 (Reported in [1994] 93 STC 380 (Mad)), in Writ Petition No. 16066 of 1993.
2. Before us, Mr. C. Natarajan, learned counsel for the appellant, submitted that from sections 13(2) and 24(3) of the Act read with rules 18(2) of the Tamil Nadu General Sales Tax Rules, 1959 (hereinafter referred to as "the Rules"), it is clear that in the case of self-assessment, if the return is submitted without payment of tax then such amount shall become due on the date of receipt of the return or on the last due date, whichever is later, that since the appellant in the present case paid the tax as per the returns on the date of filing the original return on January 20, 1992 and on the date of filing the revised return on February 19, 1992, there is no tax amount remaining unpaid on the date of filing of such returns and that in such circumstances, the department has no power to charge interest under section 24(3) of the Act and therefore, the orders of the departmental authorities challenged in the writ petition and the order of the learned single Judge are illegal. The learned counsel for the appellant further contended that rule 18(3) of the Rules providing for pre-emptory recovery can be applied only to tax due as per returns and cannot be invoked where any part of the turnover is not declared in the return, whereupon the only course open to the Revenue is to make assessment under section 13(1) read with rule 18(4) of the Rules. The learned counsel for the appellant also contended that the appellant had declared in their return for December, 1991, a turnover of Rs. 2,81,58,579 and had paid the tax amount of Rs. 44,62,791 on the said turnover of Rs. 2,81,58,579, whereas the actual turnover for December, 1991, was Rs. 3,69,72,098, that after finding the error, the appellant had voluntarily submitted a revised return on February 19, 1992 and paid the differential tax and in such circumstances, no interest became due between January 20, 1992, when the return for December, 1991, was filed and February 19, 1992, when the revised return was filed, since the case was not covered by rule 18(3) but it was a case of incorrect return for which tax due was not assessed at any time as required by rule 18(4) of the Rules. In support of his contention, the learned counsel for the appellant relied on the decision of the Supreme Court in J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422.
3. In the light of the contentions of the learned counsel for the appellant, the following point arises for consideration in this writ appeal :
"Having regard to the provisions contained in sections 13(2), 24(1) and 24(3) of the Act and rule 18(2) of the Rules with regard to self-assessment, is it open to the appellant, who failed to pay the entire tax due on the basis of actual turnover for the month of December, 1991, which was due on January 20, 1992, but paid only a portion of the tax due on that date on the basis of the original return filed on January 20, 1992, and paid the differential tax by filing a revised return on February 19, 1992, to claim that only on the date of filing the revised return on February 19, 1992, the differential tax becomes due and therefore, the appellant is not liable to pay interest on the differential tax paid on February 19, 1992, under section 24(3) of the Act ?"
4. To appreciate the contentions of the learned counsel for the appellant, it is necessary to refer to the relevant provisions of the Act and Rules. Section 24(3) of the Act which provides for the payment of interest for belated payment of tax reads thus :
"24(3). On any amount remaining unpaid after the date specified for its payment as referred to in sub-section (1) or in the order permitting payment in instalments, the dealer or person shall pay, in addition to the amount due, interest at two per cent per month of such amount for the entire period of default."
Sub-section (3) of section 24 refers to the date specified for the payment of the tax, as referred to in sub-section (1) of section 24. Looking at sub-section (1) of section 24, it is seen that save as otherwise provided for in sub-section (2) of section 13, the tax assessed or has become payable under the Act from a dealer or a person and any other amount due from him under the Act shall be paid in such manner and in such instalments if any and within such time as may be specified in the notice of assessment, not being less than 21 days from the date of service of the notice. Sub-section (1) of section 24 further provides that the tax under sub-section (2) of section 13 shall be paid without any notice of demand and in default of such payments, the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax or interest under the Act. Section 13(2) of the Act runs as follows :
"13(2). In lieu of the tax provisionally determined under sub-section (1), a dealer may, at his option, pay tax in advance during the year on the basis of his actual turnover for each month or for such other periods as may he prescribed. For this purpose, he may be required to furnish returns showing his actual turnover for each month or other periods as may be prescribed and to pay tax on the basis of such returns. The tax under this sub-section shall become due without any notice of demand to the dealer on the date of receipt of the return or on the last due date as prescribed, whichever is later."
For enforcement of section 13(2) of the Act, rules have been framed and the rule with which we are concerned is rule 18. The relevant part of rule 18 are sub-rules (2), (3) and (4) and they read as under :
"(2). Subject to the provisions of sub-rule (5), the dealer shall submit a return in form A-1 showing the total and taxable turnover for each month and the amount or amounts actually collected by him by way of tax or taxes during that month. The return for each month shall be submitted so as to reach the assessing authority on or before the 20th of the succeeding month. Along with the return, he shall also submit proof of payment as specified in sub-rule (1) of rule 55 for the full amount of the tax or taxes payable under any of the section 3, 3A, 3B, 4, 5 or 7A for the month to which the return relates After deducting therefrom the amount, if any, claimed as refund due in the month under rule 23.
(3) The return in form A-1 so filed shall, subject to the provisions of sub-rule (4), be provisionally accepted. If the return is submitted with out proof of payment as specified in sub-rule (1) of rule 55 for the full amount of tax payable after deducting therefrom the amount, if any, claimed as reimbursement or refund due in the month under rule 23, such amount of tax shall become due on the date of receipt of the return or on the last due date as prescribed in sub-rule (2), whichever is later, and shall be recovered in accordance with the provisions of the Act without any notice of demand to the dealer.
(4) If no return is submitted in respect of any month on or before the date specified in sub-rule (2) or before the expiry of the period prescribed in sub-rule (5) or if the return submitted appears to be incorrect or incomplete, the assessing authority shall, after making such enquiry as he considers necessary and after giving the dealer notice as prescribed in rule 12, determine the turnover to the best of his judgment and provisionally determine the tax or taxes payable for the month and shall serve upon the dealer a notice in form B-2 and the dealer shall pay the sum demanded at the time and in the manner specified in the notice."
5. According to sub-section (3) of section 24 of the Act, on any amount remaining unpaid after the dates specified for its payment as referred to in sub-section (1) of section 24 or in the order permitting payment in any instalments, the dealer or person shall pay in addition to the amount due, interest at 2 per cent per month on such amount for the entire period of default. According to sub-section (1) of section 24, the tax amount under sub-section (2) of section 13 shall become due without any notice of demand to the dealer on the date of receipt of the return or on the last due date as prescribed whichever is later. Rule 18(2) of the Rules says that the return for each month shall be submitted so as to reach the assessing authority on or before the 20th of the succeeding month and along with the return, the dealer shall also submit proof of payment for full amount of tax for the month to which the return relates.
6. In CEAT Ltd. v. State of Tamil Nadu (W.A. No. 1351 of 1993 dated March 29, 1994 (Reported in [1995] 96 STC 26 (Mad.)), this Bench had occasion to consider the following question, i.e., "Having regard to the provisions contained in sub-section (2) of section 13 of the Act, in the case of self-assessment, whether it is open to the dealer to file a return on any date subsequent to 20th of the succeeding month and claim that, on such date of filing of the return alone the tax becomes due and, therefore, the provisions of sub-section (3) of section 24 read with sub-section (5) of section 12 of the Act are not attracted ?" It was contended on behalf of the appellant in that case, that as per section 13(2) of the Act, it is open to the dealer to file the return on any date and not necessarily on the last date prescribed under rule 18(2) of the Rules, because the aforesaid section 13(2) of the Act specifically provided that the tax under the sub-section shall become due without any notice of demand to the dealer on the date of receipt of the return or on the last due date as prescribed whichever is later. It was further contended in that case, that as the return has been filed on November 24, 1992, along with the tax-paid receipt, though it is later to the last due date prescribed under rule 18(2), it cannot be held, in the light of the provisions contained in section 13(2) of the Act that there is delay either in filing the return or in the payment of tax. By the judgment dated March 29, 1994 (Reported in [1995] 96 STC 26 (Mad.)). In Writ Appeal No. 1351 of 1993, this Bench, speaking through my Lord the Chief Justice, while repelling the above contention of the appellant in that case, held as follows :
"It may be relevant to notice that sub-section (2) of section 13 specifically provides that the last due date and the date for receipt of the return, are to be prescribed by the Rules. Accordingly, rule 18(2) of the Rules specifically provides the date for filing the return as well as the date for payment of the tax due ...............
It is clear from sub-rule (2) of rule 18 that in the case of self-assessment, the return for each month shall have to he submitted so as to reach the authority on or before the 20th of the succeeding month, and along with the return, the tax-paid receipt has also to be enclosed. Thus, it is open to the dealer to pay the tax on any date from 1st of the succeeding month till the 20th and file the return either on the 20th of the succeeding month or on any date before that date, that is to say, from the 1st to 20th of the succeeding month. What is necessary is that along with the return, the proof of payment of the tax as specified in sub-rule (1) of rule 55, has also to be enclosed. As such, the last date prescribed for payment of tax due as well as for filing of the return is 20th only. Hence, it is not possible to hold that either sub-rule (2) of rule 18 is in any way contrary to sub-section (2) of section 13 of the Act, or that the return can be filed by the dealer on any date subsequent to 20th of the succeeding month without incurring penalty. The expression, 'whichever is later' found in sub-section (2) of section 13 of the Act is only to give latitude to the dealer to pay the tax on any date from 1st to 20th of the succeeding month and file the return also on or before the 20th of the succeeding month along with a tax-paid receipt. Hence, it does not mean that the return can be filed later than 20th of the succeeding month. The tax can be paid earlier to the filing of the return, but in either case it shall not be later than 20th of the succeeding month.
7. Learned counsel for the appellant has placed reliance on a decision of the Supreme Court in Commissioner of Income-tax, Patiala v. Shahzada Nand & Sons wherein it has been laid down that the taxing statute has to be construed as it is and there is no equity about the tax and there is also no presumption as to tax. It has been further laid down that nothing is to he read in, nothing is to be implied and one can only look fairly at the language used. Even applying the said rule of interpretation, it is not possible to hold that sub-section (2) of section 13 of the Act gives freedom to the dealer to file the return on any date subsequent to the date prescribed under the Rules. In the interpretation of a statute, what is also to be borne in mind, is the intendment of the legislation. The intendment of sub-section (2) of section 13 is to prescribe the due date for payment of the tax as well as the last date for filing the returns and give latitude to the dealer to pay the tax due on any date prior to the last date prescribed for filing of the return. If this intention has to be respected and enforced, it has to be necessarily held that sub-section (2) of section 13 of the Act does not give any latitude or freedom or liberty to the dealer to file the return on any date subsequent to the 20th of the succeeding month in the case of self-assessment. If the interpretation placed by learned counsel for the appellant on sub-section (2) of section 13 of the Act is accepted, the very object and intendment of sub-section (2) of section 13 of the Act, prescribing the last date for payment of the tax due, would be rendered nugatory. Consequently, it would become impracticable or not possible to enforce the very provisions contained in section 13(2), as it would he open to the dealer to choose any date for filing the return subsequent to 20th of the succeeding month, which would result in not only taking away the effect of section 12(5) of the Act but also rule 18(2) of the Rules. Such an interpretation, which results in defeating the very provisions of the Act, cannot at all be countenanced."
7. Thus, it is clear from the provisions contained in sub-section (2) of section 13 and sub-section (3) of section 24 of the Act and rule 18(2) of the Rules and the judgment of this Court in W.A. No. 1351 of 1993 dated March 29, 1994 (Reported in [1995] 96 STC 26 (Mad.)) referred to above that the last date prescribed for the payment of tax due as well as for filing the return is 20th of the succeeding month and that it is not possible to hold that the return can be filed by the dealer on any date subsequent to the 20th of the succeeding month without incurring, the liability to pay interest as contemplated under section 24(3) of the Act. Having regard to the provisions referred to above, we are of the view that the last date for payment of the tax due is 20th of the succeeding month, even if the dealer files the return on a date subsequent to 20th of the succeeding month. In other words, whatever may be the date of declaring the amount due for a particular month by filing the return, the due date for payment of tax is only the 20th of the month succeeding the month for which the tax relates and the period of default for the purpose of section 24(3) has to be calculated only from that date. There are two aspects in this matter. One is the due date for the payment of tax and the other is the amount payable as tax. The due date for payment is fixed, i.e., 20th of the succeeding month, irrespective of the fact whether the return is filed before, on or after 20th. The due date of payment of tax cannot be varied by the dealer, choosing to file the return after the due date for payment of tax. We must also point out that it is only the amount payable as tax that is determined by the dealer when he files the return and declares the tax due for the month. But the due date for the payment of the tax in respect of a particular month is 20th of the succeeding month. Therefore, even if in a particular case, the dealer files the return after the 20th of the succeeding month, the tax due for that month remains unpaid after the 20th of the succeeding month and sub-section (3) of section 24 stands attracted and the dealer is liable to pay, in addition to the tax due, interest at 2 per cent per month for such amount for the entire period of default.
8. In the present case, admittedly the actual turnover for December, 1991, was Rs. 3,69,72,098, as seen from the revised return filed on February 19, 1992. Therefore, the appellant was liable to pay the tax due on the actual turnover of Rs. 3,69,72,098 on or before January 20, 1992 and on that date the entire tax was due irrespective of the date of filing of the revised return. On January 20, 1992, the appellant filed the return declaring a turnover of only Rs. 2,81,58,579 and had paid tax due on the said turnover of Rs. 2,81,58,579 being Rs. 44,62,791. Again on February 19, 1992, after a delay of 30 days from the due date for payment, the appellant filed a revised return and paid the differential tax amounting to Rs. 20,15,601 though the entire tax was actually due on January 20, 1992. In these circumstances, we have no hesitation in holding that the appellant is liable to pay interest at 2 per cent per month on the tax arrears of Rs. 20,15,601 from January 20, 1992, on which date the tax became due, till February 19, 1992, when the tax arrears was actually paid, under section 24(3) of the Act. For the reasons stated above, it is not at all possible to accept the contention of the learned counsel for the appellant that the tax becomes due for payment only when the appellant filed the original return on January 20, 1992 and the revised return on February 19, 1992, in respect of the sums declared in the said returns, that there is no delay in the payment of tax and that therefore, the appellant is not liable to pay interest under section 24(3) of the Act.
9. It must also be remembered that section 24(3) of the Act provides for payment of interest by defaulting dealers. The Legislature has statutorily fixed the rate of interest as well as the period for which the defaulting dealer is required to pay the interest. Inasmuch as the liability to pay interest under section 24(3) is automatic and absolute from the date on which it becomes due, the question of bona fides on the part of the dealer or the dealer voluntarily filing a revised return after the due date, showing the actual turnover is not at all relevant for deciding the liability of such defaulting dealer to pay interest under section 24(3) of the Act. Further there is also no equity in favour of the appellant, because, the appellant though liable to pay the differential tax on January 20, 1992, on which date it became due, he actually paid the tax by filing a revised return only on February 19, 1992 and thereby retained the differential tax amount of Rs. 20,15,601 which should have gone to the coffers of the State, between January 20, 1992 and February 19, 1992.
10. Now, let us consider whether the principles laid down in the decision of the apex Court in J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 relied on by the learned counsel for the appellant are applicable to the facts of the present case. The decision of the Supreme Court referred to above turned on the following facts : the Commercial Taxes Officer in that case passed assessment orders relating to the assessment years 1975-76, 1976-77 and 1977-78 under the provisions of the Rajasthan Sales Tax Act, 1954 (Act 29 of 1954) and the Central Sales Tax Act, 1956. The returns were filed by the appellant in that case on the premises that the amount of freight charged in respect of sale of cement under the Cement Control Order did not form part of the sale price for the payment of sales tax. In Hindustan Sugar Mills Ltd. v. State of Rajasthan and J.K. Synthetics Ltd. v. Commercial Tax Officer, Kota [1979] 43 STC 13 the apex Court held that freight element formed part of the price of cement and sales tax was leviable on the sale price inclusive of the freight amount. The appellant in that case was therefore, required to pay sales tax on the sale price, inclusive of the freight. The point that arose for consideration before the apex Court was, whether the appellant was liable to pay interest on additional sales tax, which had to be paid on the inclusion of freight amount in calculating the sale price. It was contended on behalf of the appellant that the interest under section 11B of the Rajasthan Sales Tax Act can be charged only for the period subsequent to the determination of sales tax under the final assessment order and that too after the expiry of the period allowed under the notice of demand issued on finalisation of the assessment. On the other hand, the Revenue in that case, contended that interest becomes payable from the date on which the original return was filed under section 7(2) or 7(2A) of the Rajasthan Sales Tax Act, as the case may be. The apex Court, on a consideration of sections 7(2), 7(2A) and 11B of the Rajasthan Sales Tax Act and rule 25 of the Rajasthan Sales Tax Rules, held that the appellant in that case was not liable to pay interest under section 11B of the Rajasthan Sales Tax Act (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 the determination of sales tax under the final assessment after the expiry of the period allowed under the notice of demand. However, that is not the position under the provisions contained in sections 13(2), 24(1) and 24(3) of the Tamil Nadu Act read with rule 18(2) of the Rules under the provisions of Tamil Nadu General Sales Tax Act referred to above. The liability to pay interest arises, the moment the dealer fails to pay the full amount of tax in respect of the actual turnover for a particular month on the due date, i.e., the 20th of the succeeding month, irrespective of the date of filing of the return and that such liability to pay the interest at 2 per cent per month for such amount of tax which remains unpaid after 20th of the succeeding month is automatic. As pointed out by the Division Bench of this Court in Apollo Tubes Limited v. Additional Deputy Commercial Tax Officer, Ranipet [1994] 93 STC 339; (1992) 2 MTCR 190, in such a case there need not be an order of assessment before interest is levied under section 24(3) of the Act. Section 24(3) does not refer to any assessment or any proceeding on behalf of the officers for purposes of passing an order of assessment. As pointed out by the Division Bench in the decision in Apollo Tubes Limited v. Additional Deputy Commercial Tax Officer, Ranipet [1994] 93 STC 339 (Mad.); (1992) 2 MTCR 190, section 24(3) merely says that on any amount remaining unpaid, after the specified date, the dealer shall pay, in addition to the amount due, interest at 2 per cent per month on such amount for the entire period of default. The liability to, pay interest is not only automatic, but the section enjoins liability on the part of the dealer to pay the interest in addition to the amount due by way of tax under section 24(3). The apex Court in the decision referred to above was concerned with the interpretation of sections 7(2), 7(2A) and 11B of the Rajasthan Sales Tax Act which are not in pari materia with the provisions in sections 13(2), 24(1), 24(3), of the Act and rule 18(2) of the Rules with which we are concerned. It is seen from the discussion at page 437 in J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 that section 7(1) of the Rajasthan Sales Tax Act enjoins on every dealer that he shall furnish prescribed returns for the prescribed period within the prescribed time to the assessing authorities. By proviso to section 7(1), the time can be extended by not more than 15 days. The corresponding provision in the Tamil Nadu General Sales Tax Rules is rule 18(2) which says that the dealer shall submit the return so as to reach the assessing authority on or before the 20th of the succeeding month, and along with the return the dealer should also submit proof of payment for the full amount of tax payable under any of the section 3, 3A, 3B, 4, 5 or 7A of the Act for the month to which the return relates. There is no provision in rule 18(2) of the Rules for extending the time for submission of the returns as provided in section 7(1) of the Rajasthan Sales Tax Act. We are of the view that inasmuch as the decision in J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 turned on the interpretation of the provisions of the Rajasthan Sales Tax Act, which are not similar to the provisions under the Tamil Nadu General Sales Tax Act and Rules, the principles laid down by the apex Court in the said decision are not applicable to the facts of the present case. Therefore, having regard to the provisions contained in sections 13(2), 24(1), 24(3) of the Act and rule 18(2) of the Rules and the admitted facts and circumstances present in this case, we have no hesitation in holding that, it is not open to the appellant to claim that only on the date of filing of the revised return on February 19, 1992, the differential tax becomes due and that inasmuch as the differential tax was paid on February 19, 1992, it is not liable to pay interest under section 24(3) of the Act.
11. For all the reasons stated above, the conclusions of the departmental authorities and the learned single Judge that the appellant is liable to pay interest under section 24(3) of the Act are quite correct and we cannot take exception to the same. There is no merit in this writ appeal and it is liable to be dismissed. Accordingly, the writ appeal is dismissed. However, there will be no order as to costs.
12. Writ appeal dismissed.