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TMI Blog1962 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest referred to in sub-section (8) is chargeable for failure on the part of an assessee to submit an estimate of his income and pay tax as required by the terms of sub-section (3) of that section ?" The High Court answered that question against the assessee. Hence the present appeals by him. There are three appeals because there are three orders charging interest under section 18A(8), one in respect of each of three assessment years. It would help now to refer briefly to some of the provisions of section 18A. That section dealt with advance payment of income-tax and super-tax, that is, payment of such taxes on income of the year in which taxes are paid and therefore before assessment. Sub-section (1) of this section gives power in certain cases to an Income-tax Officer to make an order directing a person to make an advance payment of tax of an amount equal to the amount of the tax payable for the latest previous year in respect of which he has been assessed. Sub-section (2) gives an assessee, on whom an order under sub-section (1) has been made, power to make his own estimate of the advance tax payable by him and to pay according to such estimate instead of according to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined on the basis of the regular assessment." The assessee does not dispute that sub-section (3) of section 18A applies to him and that he should have made an estimate and paid tax according to it but he has not done either. He admits that he is a person to whom sub-section (8) applies. His contention is that in his case since he has not paid tax at all, it is not possible to calculate interest in the manner laid down in sub-section (6). Now sub-section (8) by its terms applies to a case where no payment of tax has been made and, therefore, there is there no first day of January of a financial year in which tax was paid, from which day the calculation of interest has to commence. Neither, the assessee contends, can any question of a shortfall between eighty per cent of the tax payable on regular assessment and the amount paid arise where nothing had been paid. The assessee really says that as the language of sub-section (6) stands, it can have no operation in his case and therefore he has been wrongly charged with interest. To clear the ground we may state before proceeding further that the assessee has no other objection to the orders under sub-section (8) making him liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this kind the rule is that that construction should be preferred which makes the machinery workable, ut res valeat potius quam pereat." In India United mills Ltd. v. Commissioner of Excess profits Tax this court observed : "That section is, it should be emphasised, not a charging section, but a machinery section and a machinery section should be so construed as to effectuate that charging sections." (1) L.R. 19 Eq.457,459 (3) [1948] 1 All E.R. 616, 625 (2) [1957] S.C.R. 837,847 (4) [1940] 8 I.T.R. 442,448; (5) [1955] 27 I.T.R. 20,25; [1955] 1 S.C.R. 810,816 We, may now profitably read what Lord Dunedin said in Whitney v. Commissioners of Inland Revenue : "My Lords, I shall now permit myself a general observation. Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective. A statute is designed to be workable, and the interpretation thereof by a court should be to secure that object, unless crucial omission or clear direction makes that end unattainable. Now, there are three stages in the imposition of a tax : there is the declaration of liability, that is the part of the statute which de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dealing here with a provision which lays down the machinery for the assessment of interest. That sub-section (8) intended to and did in the clearest terms impose a charge for interest seems to us to be beyond dispute. It says that interest calculated in a certain manner "shall be added to the tax." We do not here have to resort to any equitable rule of construction or to alter the meaning of the language used or to add to or vary it in order to arrive at the conclusion that the provision intended to impose a liability to pay interest. That is the plain effect of the language used. But the sub-section also provides that the interest for which liability was created has to be calculated in a certain manner. It is this provision which has given rise to the difficulty. But obviously this provision only lays down the machinery for assessing the amount of interest for which liability was clearly created; it in substance says that in calculating the amount of interest the machinery of calculation laid down in sub-section (6) Shall be applied. The proper way to deal with such a provision is to give it an interpretation which, to use the words of the Privy Council in Mahaliram Ramjidas's c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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