1960 (1) TMI 28 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Delay in Filing the Petition
2. Exercise of Power under Article 227 of the Constitution
3. Interpretation of "Prescribed Time" under Section 16(4) of the Bombay Sales Tax Act, 1953
4. Validity of Penalty Imposed for Late Payment or Non-Payment of Tax

Issue-Wise Detailed Analysis:

1. Delay in Filing the Petition:

The respondent raised an objection regarding the delay in filing the petition. The order challenged was made on 22nd April 1959 and served on 21st May 1959, while the petition was filed on 21st July 1959. The court held that considering the nature of the dispute and circumstances, the delay was not inordinate and should not debar the petitioner from prosecuting the petition.

2. Exercise of Power under Article 227 of the Constitution:

The respondent further argued that the court should not interfere under Article 227 of the Constitution. The court acknowledged that the power under Article 227 is sparingly exercised and only in specific circumstances. However, it concluded that the dispute raised by the petitioner and the Tribunal's decision warranted the exercise of its powers under Article 227 if the order challenged was found to be illegal.

3. Interpretation of "Prescribed Time" under Section 16(4) of the Bombay Sales Tax Act, 1953:

The central argument was whether the "prescribed time" for payment of tax under Section 16(4) was defined by the Act or the rules made under the Act. The petitioner argued that no time was prescribed for payment of tax after assessment, and hence, no penalty could be imposed for late payment. The court examined the language of sub-sections (4) and (5) of Section 16 and emphasized the rule of construction ex visceribus actus, which mandates that every provision of a statute should be construed with reference to the context and other provisions of the statute.

The court noted that while the expression "prescribed" is defined in Section 2(10) to mean prescribed by rules, this definition does not preclude judicial interpretation. The court concluded that the Legislature itself prescribed the time for payment in sub-section (5) of Section 16, which states that the date specified in the notice for payment shall be not less than thirty days from the date of service of such notice. This interpretation implies that the Legislature intended the time for payment to be flexible, depending on the facts and circumstances of each case.

4. Validity of Penalty Imposed for Late Payment or Non-Payment of Tax:

The petitioner contended that there was no provision in the Act or rules empowering the taxing authorities to levy a penalty for non-payment or late payment of tax after assessment. The court, however, held that the combined reading of sub-sections (4) and (5) of Section 16, along with Rule 21 and Form XVII, indicated that the time for payment was indeed prescribed. Rule 21, read with Form XVII, specifies that the notice served on the dealer must state a date not less than thirty days from the date of service of such notice, thereby prescribing the time for payment. Consequently, the court found that the penalty imposed for late payment was valid.

Conclusion:

The court dismissed the petition, holding that the Legislature had prescribed the time for payment of tax in sub-section (5) of Section 16, and the penalty for late payment was valid. The petitioner's arguments regarding the lack of prescribed time and the invalidity of the penalty were rejected. The petition was dismissed with costs.