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TMI Blog1974 (1) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(3) cannot be passed imposing one-tenth per centum of the tax due till the assessment under section 12 of the Act is completed? (3) Whether, in the circumstances of the case, the Member, Sales Tax Tribunal, is justified in holding that the highest penalty leviable according to first part of section 11(3) of the Act is Rs. 5 per day?" 2.. The assessee is a registered dealer under the Act. For the quarters ending 31st December, 1965, 31st March, 1966, and 30th June, 1966, with which we are concerned, the assessee defaulted to comply with the requirement of making a return as required under section 11(1) read with rule 20 as per the details indicated below: Quarter ending Period of delay Amount of admitted tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les tax becomes payable when liability to pay tax arises, and liability to pay tax arises by the happening of the taxable event......There is a distinction between the expressions "tax payable" and "tax due". Tax is due when it becomes a debt owed to the taxing State; it becomes a debt when it has been determined by assessment and quantified, and a notice of demand has been issued intimating the amount of tax and demanding payment.' Accordingly, in the context of the facts of this case, it cannot be said that there was any tax due. It was only a tax payable. Consequently, the maximum penalty that could be imposed is Rs. 5 for every day of delay in failing to submit the return. In this case, I see the justification of imposing highest pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnish to the Assistant Sales Tax Officer or the Sales Tax Officer, as the case may be, within whose jurisdiction his place or places of business are located a return in form IV showing particulars in respect of the sales tax payable by him for that quarter. Provided......" "21. Penalty for non-submission of return.-(1) If a registered dealer fails to furnish a return within a fortnight of the due date as provided in rule 20, the Commissioner may serve on such defaulting dealer a notice in form V calling on him to show cause by a date to be specified In the notice why a penalty should not be levied on him under sub-section (3) of section 11. (2) If after considering the explanation of the dealer and giving him a personal hearing I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng full payment of the admitted tax or bank draft or cheque paying the same, failing which the return shall not be a valid one. (iv) In case of default the dealer becomes liable to a penalty which shall not exceed one-tenth per centum of the tax due or five rupees, whichever is higher, for every day of default. 4.. In the face of such clear statutory provisions, we see no justification to get into a consideration of "tax due" and "tax payable". There may be-nay, there is-distinction between these two, but so far as section 11 and the relatable rules are concerned, there is no scope to proceed on the basis of such distinction. In the concept of "admitted tax" a process of self-assessment is involved. The dealer is required by law to calc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for every day of default. As we have already said, the statute requires the admitted tax to be paid and that amount (admitted tax) is due at the time of making of the return within the time prescribed. In section 11(3) of the Act two alternative rates of penalty are provided with a mandate that the higher of the two has to be imposed. There may be a case where one-tenth per centum for every day of default may work out to be less than five rupees per day while in another case the reverse may be the position. The alternatives with the mandate to fix the higher liability on the defaulting dealer are meant to meet every situation of default. That provision has nothing to do with reference to completion of assessment and quantification of liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, Mahomed Tayoob Daruwala v. State of Bombay[1960] 11 S.T.C. 612., dealt with section 16(4) of the Bombay Sales Tax Act, which provides: "If the tax is not paid by any dealer within the prescribed time, the dealer shall pay, by way of penalty in addition to the amount of tax, a sum equal to......." The court concerned itself as to what was the meaning of the prescribed limit. No support can be had by the assessee from that decision. The last of the cases dealt with the same section 16 under the scheme of the Bombay Act. Where a return is furnished without payment of the full amount of tax due according to the return, section 16(5) prescribes the time within which the amount of tax due according to the return or the balance thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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