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TMI Blog2001 (3) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... of of payment of the amount of tax due within 20 days of the previous quarter but such a return was not filed by the appellant. A failure to file return of taxable turnover may render the assessee liable for any other consequences or penal action as provided by law but cannot attract the liability for payment of penal interest under sub-section (3) of section 23 of the Act on the parity of reasoning that if a return of turnover would have been filed on the due date then the tax as per return would have become due and payable on that date. - Civil Appeal No. 3009 of 1999 - - - Dated:- 27-3-2001 - BHARUCHA S.P. AND SABHARWAL Y.K. JJ. G. Prakash, Advocate, for the respondents. G.C. Sharma, Senior Advocate (Sudhir Kumar Gupta, J. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by filing a writ petition before the High Court of Kerala at Ernakulam. A learned single Judge allowed the petition and quashed the said demand [see [1995] 96 STC 157 (Ker)] (Maruti Wire Industries Private Limited v. Sales Tax Officer, I Circle, Mattancherry). The State of Kerala preferred a writ appeal which has been allowed and the judgment of the learned single Judge has been set aside. The aggrieved appellant has filed this appeal by special leave. Sub-section (3) of section 23 of the Act reads as under: "(3) If the tax or any other amount assessed or due under this Act is not paid by any dealer or other person within the time prescribed therefor, in this Act or in any rule made thereunder and in other cases within the time speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher pedestal than an assessee who files a return and, therefore, a reasonable construction to be placed on sub-section (3) of section 23 would be that an assessee not filing a return of turnover should be held liable to pay penal interest with effect from a date on which he should have filed a return of turnover accompanied by payment of tax even if such return was not actually filed. The learned counsel for the appellant submitted in response that the scheme of the Act as it stood at the relevant time contemplates a different penal action against such default, i.e., penalty under section 45A of the Act for failure to submit the return of turnover which penalty can be as high as an amount twice the amount of sales tax payable but liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax amount relatable to the freight charges. Venkataramiah, J., speaking for himself and on behalf of A.P. Sen, J., held that the expression "on the basis of return" should be construed as "on the basis of a true and proper return" and an assessee, who did not file a return or made a wrong plea as to part of the turnover being not taxable but subsequently found to have made a wrong claim, would be liable to pay interest on the amount of tax which the assessee was held liable to pay but did not pay and such a construction would be in conformity with the legislative intention. Bhagwati, J., in his dissenting opinion construing the expression "full amount of tax due on the basis of return" held: "We must look at the return actually filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion in Associated Cement Co.'s case [1981] 48 STC 466 held that the provision by which the authority is empowered to levy and collect interest, even if construed as forming part of the machinery provisions, is a substantive law, not adjectival law, and interest cannot be recovered by way of damages for wrongful detention of the amount. This Court further held that the "tax payable" or "tax due" is that amount which becomes due ex hypothesi on the turnover and taxable turnover shown in or based on the return or as to which an order of assessment has been made. 7.. In view of the law laid down by the Constitution Bench, we are clearly of the opinion that the liability of the assessee-appellant to pay sales tax could have arisen either ..... X X X X Extracts X X X X X X X X Extracts X X X X
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