1995 (2) TMI 387 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of section 36(3) of the Bombay Sales Tax Act, 1959 regarding the levy of penalty for default for a part of a month.

Analysis:
The case involved a reference under section 61(1) of the Bombay Sales Tax Act, 1959, regarding the levy of penalty for default for a part of a month. The assessee, a reseller of chemical and plastic raw materials, challenged the penalty imposed under section 36(3) of the Act for a period less than a month. The Tribunal upheld the penalty calculation for a part of a month based on its earlier decision. The main contention was whether penalty could be levied for a part of a month or only for a complete month under the Act.

The key argument presented by the assessee's counsel was that penalty under section 36(3) could be imposed only for a complete month and not for a part thereof. The counsel highlighted the language of the section before and after the amendment, emphasizing the change from "each complete month" to "each month." On the other hand, the Revenue's counsel argued that the language of the section allowed for penalty calculation for any period of default, whether complete or partial.

The Court examined the evolution of section 36(3) of the Act over time, noting the changes in language and the legislative intent behind the amendments. The original provision specified penalties for each complete month of default, which was later amended to penalties for each month without the word "complete." The Court emphasized that the legislative intent was to broaden the scope of penalty calculation to include any period of default, not limited to complete months only.

The Court rejected the assessee's argument that "each month" should be interpreted as "each complete month," emphasizing that the legislative changes were clear and unambiguous. The Court noted that the subsequent amendment to the section, which replaced penalties with interest calculations, further clarified the intention to levy charges for any part of a month. Therefore, the Court concluded that penalty could be levied for any period of default, whether complete or partial, under section 36(3) of the Act.

In conclusion, the Court answered the question referred to them in the affirmative and in favor of the Revenue, upholding the levy of penalty for default for a part of a month under section 36(3) of the Bombay Sales Tax Act, 1959. The Court made no order as to costs in the case, and the reference was answered in the affirmative.