2024 (3) TMI 487 - HC - VAT and Sales Tax

Levy of interest on late payment of profession tax - requirement to deduct the profession tax from the salaries and wages of the employees - time limit for filing return and payment of profession tax under the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987 - interest for delayed payment of tax - HELD THAT - In State of Himachal Pradesh v. Himachal Techno Engineers 2010 (7) TMI 875 - SUPREME COURT one of the questions which arose was that whether the period of three months can be counted as 90 days while answering, the Hon ble Apex Court held that, considering Section 34 (3) of the Arbitration and Conciliation Act 1996 and also the definition of month as defined in Section 3 (35) of the General Clauses Act, 1897 that the legislature had the choice of describing the periods of time in the same units, that is, to describe the periods as three months and one month respectively or by describing the periods as ninety days and thirty days respectively. It did not do so. Therefore, the legislature did not intend that the period of three months used in sub-section (3) to be equated to 90 days, nor intended that the period of thirty days to be taken as one month - The Hon ble Apex Court clearly held that a month does not refer to a period of thirty days, but refers to the actual period of a calendar month. The present case pertains to the period prior to the amendment in Rule 12 by which a specific date i.e., on or before 10th day of the month succeeding the month for which the return has to be filed, has been specified. The further submission of the learned counsel for the petitioner based on the amendment in the year 2011 is that it the amendment , fortifies that there was no date prescribed prior to the amendment and consequently, the same has been specified by way of amendment and consequently, there would be no liability for payment of interest. The said submission also deserves rejection. Even if there was no specified date, as has now been incorporated in Rule 12, it cannot be said that there was no date prescribed for filing return or/and payment of tax - Now in view of the amendment of Rule 12 (1) the said period is on or before 10th day of the month succeeding the month for which the return has to be filed . From the aforesaid provisions of Sections 4, 5, 7, 11, 12 of the Act 1987; the Rules 12 unamended (as the present case is prior to amendment), 13, 24 of the Rules 1987 and Form-V, it is evident that the liability for payment of interest on tax is on the assessee, if the assessee does not deduct the tax at the time of payment of salary or wages. Liability would also be if after deducting, the assessee fails to pay the tax as required by or under the Act. Such liability was monthly liability for payment of tax and filing of returns. This liability to pay the interest is in addition to the amount of profession tax if the same was not paid on monthly basis i.e., up to the last date of the succeeding month for which the return had to be filed. There are no substance in the submissions advanced by the learned counsel for the petitioner that there was no liability to make payment of interest, as there was no time specified for payment of professional tax - the impugned order does not suffer from any illegality. Petition dismissed.

Summary

Issues Involved:
1. Whether any time limit has been prescribed for filing return and payment of profession tax under the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987?
2. Whether the revisional authority is right in holding that there would be liability for payment of interest as the petitioner did not pay the profession tax within the prescribed time?

Summary:

Issue 1: Time Limit for Filing Return and Payment of Profession Tax

The court examined whether there was a prescribed time limit for filing returns and paying profession tax under the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987. The relevant sections, including Section 4, 5, 7, and 11 of the Act, and Rules 12, 13, 15, and 24 of the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Rules, 1987, were analyzed. The court noted that Section 7 requires returns to be filed in a prescribed form by prescribed dates, and Rule 12 mandates that returns be furnished in Form V. Although the specific date for filing returns was not initially prescribed, the court concluded that the returns and tax payments were to be made on a monthly basis, up to the last day of the succeeding calendar month. This was further clarified by the amendment in Rule 12 in 2011, which specified the 10th day of the succeeding month as the due date.

Issue 2: Liability for Payment of Interest

The court addressed whether the petitioner was liable for interest due to delayed payment of profession tax. The revisional authority had held that there was liability for payment of interest as the petitioner failed to pay the profession tax within the prescribed time. The court upheld this view, stating that the liability to deduct and pay tax was monthly, and failure to do so attracted interest under Section 11 and Rule 24 of the Act and Rules, respectively. The court rejected the petitioner's argument that there was no prescribed time for payment of tax, emphasizing that the payment was to be made monthly, and any delay incurred interest liability.

Conclusion:

The court dismissed the writ petition, affirming the revisional authority's order and directing the Assessing Authority to finalize the proceedings within three months. The court concluded that the liability for payment of interest on delayed tax payments was clear and the impugned order did not suffer from any illegality.