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TMI Blog1977 (11) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... ted returns for the preceding months in form No. A-2 as required under rule 17 of the A.P. General Sales Tax Rules. Along with the returns, they also filed proofs of payment of full amount of the tax due on or before the 25th day of every month showing the total and net turnovers for the preceding month. As the petitioners failed to comply with the provisions of rule 17, the Commercial Tax Officer, Anakapalli, passed provisional assessment orders and issued demand notices in form B-2 directing them to pay the tax assessed within 30 days from the date of service of notice. In March, 1976, the Commercial Tax Officer, demanded, by his notices served upon them, interest at the rate provided in section 16(3) of the Andhra Pradesh General Sales Tax Act on the tax assessed. It is this demand of interest that has been the subject-matter of the appeals before the Tribunal and revisions here. To determine the questions, it would be necessary to notice sections 15 and 16, and rule 17 to the extent relevant. Section 15 reads: "15. Provisional assessment of tax.-(1) The tax payable under this Act for each year may be provisionally assessed in advance during the year in monthly or other pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of sub-rule (4), be provisionally accepted. (3) Where any dealer fails to submit a return in respect of any month before the date prescribed in that behalf or produces the accounts, registers and other documents after inspection or submits a return subsequent to the date of inspection, or if the return submitted appears to be incorrect or incomplete, the assessing authority shall after following the procedure prescribed in rule 12 determine the turnover to the best of his judgment and provisionally assess the tax or taxes payable for the month and shall serve upon the dealer a notice in form B-2 and the dealer shall pay the sum demanded within the time and in the manner specified in the notice." As may be seen from rule 17, the petitioners, as their turnover in a year exceeded Rs. 50,000, filed monthly returns in form A-2 showing the total and net turnovers for the preceding months. They had also submitted along with the returns receipts from the Government treasury in proof of the full payment of tax payable for the month to which the returns related. Subrule (5) of rule 17 enables the assessing authority after the close of the year for which the monthly return has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 15 also gives a clue as to the meaning to be given to the words "during the year" occurring in sub-sections (1) and (3) of section 15. Sub-section (2) empowers the assessing authority to enhance or reduce the provisional assessment. If we are to agree with Mr. Venkatarama Reddy that the assessing authority will have no jurisdiction after the close of the year to make a provisional assessment on the basis of the turnover shown in the monthly returns, then the assessing authority will have no jurisdiction to enhance or reduce, as the case may be, the provisional assessment. It is significant that the legislature has advisedly chosen the words "may be provisionally assessed in advance" in sub-section (1) of section 15 on the basis of the estimated or actual turnover of the dealer leaving the option to the assessing authority. There is nothing in the language of section 15, which prohibits the assessing authority from making a provisional assessment on the monthly returns beyond the 31st day of March of the year. The fact that it is open to the assessing authority to make the final assessment on the basis of the returns submitted in form A-2 does not in any way preclude him fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a mockery, especially when we bear in mind the fact that against an order of provisional assessment, a right of appeal is provided under section 34 of the Act, of second appeal under section 39, and perhaps even a revision under section 41." The learned Judges held that assessments could be made within the year but collections could be made even thereafter. It should be borne in mind that while construing the scope of section 15, we have also to bear in mind the provisions of rule 17. We do not know whether there is any corresponding rule 17 in the Kerala Act. We are not prepared to hold that, having regard to the language of section 15, it is mandatory on the part of the assessing authority to make the provisional assessment within the year. It is true that a taxing provision has to be construed strictly and if there is any ambiguity, the benefit of that ambiguity must go to the assessee. But this is not to say that a taxing provision should not receive a reasonable construction (see Commissioner of Wealth-tax v. Kripashankar[1971] 81 I.T.R. 763 (S.C.); (1971) 2 S.C.C. 570; 1971 Tax. L.R. 1756. We are of the opinion that, when section 15 is read with rule 17, it is far more r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guage is mandatory providing that the dealer shall pay interest in addition to the amount of such tax. In the case of the Supreme Court, there was stay of the proceedings. The learned Judges, having regard to the language of section 8(1-A), held that the period of stay cannot be excluded for purposes of calculating interest. That decision, therefore, squarely governs the present cases also. The last contention of the learned counsel was that the assessing officer should have at least issued show cause notices to the petitioners before levying interest on the tax assessed. According to him, the principles of natural justice and fair play demanded such an action on the part of the Commercial Tax Officer. We see no justification for this comment. The provisions of the Act are quite clear. In default of payment within the time prescribed, the statute provides for payment of interest at the rate prescribed therein. Tax assessed is a debt due, and when it is not paid, interest is attracted, as provided in the statute. Payment of interest cannot be equated to or mixed up with levy of penalty. As pointed out by the Supreme Court, liability to pay interest is automatic and arises by opera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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