1990 (11) TMI 353 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of tax liability under section 7(2A) of the Rajasthan Sales Tax Act, 1954 and imposition of penalty under section 16(1)(b) for non-payment within the specified time intervals.

The judgment in question pertains to the interpretation of tax liability under section 7(2A) of the Rajasthan Sales Tax Act, 1954, and the imposition of penalties under section 16(1)(b) for non-payment within the specified time intervals. The key question raised in the revision petition was whether the amount payable under section 7(2A) constitutes tax as defined in the Act and if penalties under section 16(1)(b) can be imposed for delays in payment. The Board contended that the payment under section 7(2A) is an advance payment and not in the nature of tax, thus no penalty should be imposed for non-payment under section 16(1)(b.

The court analyzed the relevant provisions, noting that section 16(1)(b) pertains to failure to pay tax, fee, or penalty within the specified time. It highlighted that section 7(2A) empowers the State Government to require dealers to pay tax at shorter intervals than prescribed, with the tax being deposited in advance of the return. The court emphasized that the requirement to pay tax at shorter intervals is not akin to advance tax, as the tax has already been collected by the dealer and is to be paid before filing the return, as per the notification issued by the Government.

The court concluded that failure to deposit tax at the specified intervals would constitute a failure to pay tax within the allowed time, thereby attracting liability for penalties under section 16(1)(b). It held that the amount payable under section 7(2A) is indeed considered tax, and non-compliance with the payment requirements set out in the notification would result in the imposition of penalties. Consequently, the revision petition of the department was allowed, and the case was remanded to the Deputy Commissioner (Appeals) for decision in line with the court's interpretation.

In summary, the judgment clarifies that the amount payable under section 7(2A) of the Rajasthan Sales Tax Act, 1954 is considered tax, and failure to pay this amount within the specified intervals as mandated by the Government notification can lead to the imposition of penalties under section 16(1)(b). The court's decision provides guidance on the interpretation of tax liability and penalty provisions under the Act, ensuring compliance with the prescribed payment timelines and obligations for dealers under the legislation.