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TMI Blog1984 (11) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been found to be deficient, notices of demand have been issued demanding penalty under section 24(3) of the Act. The penalty demanded in these notices is in respect of the entire period of one month, whereas the sales tax had already been deposited during the course of a calendar month. 2.. In order to appreciate the arguments advanced by the several learned counsel appearing on behalf of the dealers-assessees, it is necessary to briefly outline the scheme of the Act and the Rules. 3.. The charging section is section 3, and section 11 provides that the tax under the Act shall be assessed, levied and collected in such manner as may be prescribed. Section 12 deals with the procedure to be followed by the assessing authority and the assessment is on the basis of the prescribed return relating to the turnover submitted in the prescribed manner within the prescribed period. There is a power to make a best judgment assessment under section 12(2). Subsection (3) of section 12 deals with penalty which reads as follows: "Section 12. (3) In addition to the tax assessed under sub-section (2), the assessing authority may, in the same order of assessment passed under subsection (2), or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r by the dealer, direct the dealer to pay, in addition to the tax assessed under clause (a) of sub-section (1), by way of penalty, a sum which shall not be less than fifty per cent but which shall not be more than one hundred and fifty per cent of the tax so assessed: Provided that no penalty under sub-section (2) shall be imposed unless the dealer affected has had a reasonable opportunity of showing cause against such imposition." Sub-sections (3), (4) and (5) of section 16 deal with computation of the period of five years and they are not relevant for our purpose. 4.. The other relevant provision which needs to be referred is section 22 which enacts a prohibition against the collection of tax by a dealer. Under that provision, it is provided that no person who is not a registered dealer shall collect any amount by way of tax or purporting to be by way of tax under the Act, and no registered dealer shall make any such collection except in accordance with the provisions of the Act and the Rules made thereunder. Sub-section (2) is the penal section which reads as follows: "Section 22. (2) If any person or registered dealer collects any amount by way of tax or purporting to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24. (1) The tax assessed or has become payable under this Act shall be paid in such manner and in such instalments, if any, and within such time, as may be specified in the notice of assessment, not being less than twenty-one days from the date of service of the notice. If default is made in paying according to the notice of assessment, the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax under this Act." A consequential amendment also is made in sub-section (3), the material part of which reads as follows: "Section 24. (3) If the tax assessed or has become payable under this Act or any instalment thereof is not paid by any dealer or person within the time specified therefor in the notice of assessment or in the order permitting payment in instalments, the dealer or person shall pay by way of interest, in addition to the amount due, a sum equal to a sum calculated at the rate of two per cent of such amount for each month or part thereof after the date specified for its payment." Here also, the subject-matter of sub-section (3) which originally was only the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. As soon as the tax has been provisionally fixed under rule 10 or 11, the assessing authority shall issue to the dealer a notice in form B and the dealer shall pay for each month of the year of assessment the tax provisionally fixed in equated instalments for the rest of the year in the manner specified in the notice." Form B is described as "notice of provisional assessment and demand for payment of tax or taxes". It expressly calls upon the dealer to pay the tax demanded "within thirty days from the date of service of the notice or on or before the 10th of the next month whichever is later, and the tax for each of the remaining months on or before the 10th of the succeeding month". Rule 14 dealing with a casual trader referred to in section 2(e) and sub-rule (3)(a) of rule 14 enable the assessing authority to assess the tax payable according to the best of his judgment, if no return is submitted by the casual trader as required by sub-rule (2), and the assessing authority has to issue a notice of demand in form B-4 for the tax due. Sub-rule (3)(a) further provides that the casual trader shall thereupon pay the sum demanded within the time allowed and in the manner specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied to him, from the beginning of any year he shall intimate his desire to the assessing authority at the time of submitting the return prescribed in rule 9 or sub-rule (2) of rule 15 and shall submit returns and pay tax in accordance with the following sub-rules. (1-A) A dealer who is eligible to opt for the method of assessment described in sub-rules (2) to (7) of this rule and who has not exercised his option as provided in sub-rule (1) of this rule, may, if he desires that this method of assessment should be applied to him, intimate his option to the assessing authority at any time during the course of the year. On his so opting, the dealer shall, within a period of thirty days from the date of his option, submit a return or returns, in form A-1 for the preceding month or months and along with the return or returns, he shall also submit proof for payment of full amount of tax or taxes payable under sections 3, 4 or 5 of the Act, for the month or months to which the returns relate after adjusting the tax, if any, already paid under rules 10 to 13 for that year. (2)..................... (3) The return in form A-1 so filed shall, subject to the provisions of subrule (4), be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Rules. When such demands were made and revisions were filed under section 33, it appears that the departmental authorities declined to entertain these revision petitions and entertain a contention that the dealers are not liable to pay any penalty under section 24(3) of the Act in a case where the assessee-dealer has opted out for the method of assessment prescribed under rule 18 and had filed the necessary return under rule 18(3). As a part of the challenge to the notices demanding the penalty levied under section 24(3), the dealers also challenged the constitutional validity of section 24(3) of the Act itself. 11.. One such matter came before a learned single Judge of this Court in Writ Petition No. 11015 of 1981 (Khivraj Motors Ltd. v. Commercial Tax Officer reported in [1982] 50 STC 141). In that decision, the learned Judge (Ramanujam, J.) held that there is no infirmity in section 24(3) of the Act. This view of the learned Judge is challenged in Writ Appeal No. 10 of 1982 which is one of the matters argued before us. It would therefore be proper to refer to the view which the learned Judge has taken with regard to the validity of section 24(3) of the Act. 12.. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax assessed is not paid within the specified date, an additional amount by way of penalty shall be paid by the assessee, there is no question of the assessee being given an opportunity to put forward his objections not to levy the penalty. That the Legislature has power to make such a provision cannot be doubted. It is true the provision in section 24(3) is very stringent but the Legislature has got the power to enact such a provision for the effective recovery of the tax assessed. Section 24(3) is therefore quite valid and enforceable." It is the correctness of this view which is challenged before us. Apart from the grounds which were urged before the learned Judge, several other grounds were raised before us to which we shall refer. 13.. Before, however, we consider the arguments advanced before us, it is necessary to appreciate the true nature and scope of section 24(3) of the Act. We are dealing with a taxing statute and it would be useful to reproduce at the outset the observations of Lord Dunedin in Whitney v. Commissioners of Inland Revenue [1926] AC 37 which has been cited with approval by the Supreme Court in Khazan Chand v. State of Jammu and Kashmir [1984] 56 STC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not paid within the time specified in the notice of assessment, then the section provides that the dealer or the person liable to pay the tax shall pay "by way of penalty", in addition to the amount due, a sum equal to a sum calculated at the rate of two per cent of such amount for each month or part thereof after the date specified for its payment. In the case of defaulted instalments, the penalty will be payable at the prescribed rate on the amount of instalment. Subsection (3) of section 24 thus casts a statutory obligation to pay the penalty on arrears of tax or instalment as the case may be. The amount due as tax is described as "tax assessed under the Act". When section 24(3) refers to "tax assessed under the Act", necessarily the reference is to sections 11 and 12, because section 11 says that tax under the Act shall be assessed, levied and collected in such manner as may be prescribed. As already pointed out, section 12 prescribes the procedure to be followed by the assessing authority. The methods of assessment, which we have already referred to, are prescribed in rules 5 to 17 and 18. Both these methods are alternative methods of assessment depending upon the choice of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty has to be levied for that part of the month for which the amount remains unpaid commencing from the last date on which the payment could have been made a penalty for the whole of the month could have been levied by the taxing officer. In all fairness, the learned Advocate-General has very fairly conceded that the taxing officer did not have any jurisdiction to levy penalty for the entire month whenever payment has been made prior to the expiry of the month. On the plain words of section 24(3), there is clear infirmity in the notice of demand which is impugned in Writ Petition No. 2993 of 1982 and hence that demand is quashed and the matter is remanded back to the authorities concerned to redetermine the penalty. 15-A. Since as a part of the argument challenging the validity of section 24(3) stress has been laid on the use of the word "penalty" and a comparison is sought to be made with the other provisions providing for penalty in the Act, we may at once point out that on a true construction of section 24(3) of the Act, though the word "penalty" has been used therein, what has been provided for, is nothing more than interest, which is claimed by the State, because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell-recognised. Such a provision is merely incidental to the levy of tax and is a part of the procedure for recovery of tax. In Khazan Chand's case [1984] 56 STC 214 (SC) cited supra, while dealing with section 8(2) of the Jammu and Kashmir General Sales Tax Act, it was clearly observed that payment of interest in case of default in payment of tax is a means of compelling the assessee to pay the tax due by the prescribed date and that it is a mode of recovery of tax and well within the legislative power of the State. Section 8(2) which fell for consideration before the Court in Khazan Chand's case [1984] 56 STC 214 (SC) reads as follows: "...(2) If the tax or any other amount due under this Act is not paid by the dealer or any other person, by whom it is payable, within the period specified in demand notice, the dealer or such other person shall be liable to pay interest on the tax or other amount from the date it was payable to the date of actual payment at the following rates: (a) if the default is for a period not exceeding three months at 1 per cent per month; (b) if the default is for a period exceeding three months but less than six months at 2 per cent per month; (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein related to the validity of section 140A(3) of the Income-tax Act, which has been held by the Bench of this Court to be confiscatory in character. In that decision, the Division Bench observed as follows: "Our attention was not drawn to any provision in the taxing statute of any other country where the law has provided for penalty of this character for failure or non-payment of the tax payable. On the other hand, we find, the legislative provisions in the Income-tax Acts of the United States of America, the United Kingdom, Australia and Sweden contain only provision for payment of compensatory interest at the rates varying up to 10 per cent of the tax in arrear. These compensatory interests are also to be paid with respect to the period of the delay in payment. We find the following passages in 51 American jurisprudence, pages 848 and 850: 'The continuance of regular and uniform receipt of the public revenue is essential to the continued existence of the State; it cannot tolerate delay in the payment of taxes, and to induce prompt payment of taxes when due, the legislatures of the several States have very generally imposed penalties upon taxpayers who fail to pay their taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so taken the view that even though the word "penalty" is used, it provides only for compensatory interest, and quoted with approval the observations of this Court in M.R. Vidyasagar v. Income-tax Officer [1957] 31 ITR 173 (Mad), where the Court took the view that it is the nature and substance of the levy that determines whether it is compensatory or otherwise, and the phrase "penal interest" in section 18A(6) of the Income-tax Act, 1922 was held to be not in the nature of penalty but in the nature of compensation for delay in payment. Thus it is clear that whether a levy is to be construed as penalty or interest in the nature of compensatory payment has to be determined with reference to the relevant provisions of the Act. Apart from the fact that there are independent penalty provisions which have been enacted in the Act, a clear distinction between penalty and interest is to be found in the Act itself. Prior to this amendment, the section reads as follows: "Recovery of Penalty.-Any penalty payable under this Act shall be deemed to be tax under this Act, for the purposes of collection and recovery and shall be without prejudice to the institution of any proceeding for an offenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 696 (SC), Anantharam Veerasinghaiah Co. v. Income-tax Commissioner, Andhra Pradesh AIR 1980 SC 1146 and Shiv Dutt Rai Fateh Chand v. Union of India [1983] 53 STC 289 (SC); AIR 1984 SC 1194. 22.. The last one was a decision under the Central Sales Tax Act, in which the Supreme Court pointed out that the default committed by the dealer should be established at an enquiry after giving the dealer concerned an opportunity of being heard and that the degree of remissness involved in the default is a relevant factor to be taken into account while levying penalty. Mr. Kannan who cited these decisions has also referred us to a decision of the Full Bench in Kathiresan Yarn Stores v. State [1978] 42 STC 121 (FB); AIR 1978 Mad 322 (FB) in which the Bench has taken the view that the power to impose penalty under section 12(3) of the Tamil Nadu General Sales Tax Act prior to its amendment by Act 31 of 1972 has to be exercised with proper judicial discretion and it can be exercised only in cases of wilful non-disclosure intended to evade tax. 23.. The argument in substance was that, since no opportunity was provided and no enquiry was also contemplated, section 24(3) must be treated as a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 140A(3) of the Act is not compensatory for delayed payment or retention of tax. In the guise of a deterrent provision for enforcing payment of tax due and payable, section 140A(3) authorises confiscation of property. Confiscation of property for non-payment in time of a tax ascertained and payable is an unreasonable restriction on the fundamental right to property of an assessee." These observations will show that the foundation of the decision was the conclusion that section 140A(3) violated the fundamental right in article 19(1)(f) of the Constitution and the provision was not saved by article 19(5). Article 19(1)(f) is since deleted. This is sufficient to distinguish the decision of the Division Bench. 24.. When heavy reliance was placed by Mr. Natarajan on certain observations of the Supreme Court in Maneka Gandhi's case AIR 1978 SC 597, the learned Advocate-General has referred us to the observations made therein at page 629 and the contention raised by him was that, if an enactment or a provision of law was within the legislative competence of the State Legislature and it did not violate any of the provisions of Part III of the Constitution of India, no provision therein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity to show cause being extended because the assessee knows that he has not deposited the tax, and in case he has deposited beyond the prescribed time, then he knows when he has deposited, and he knows the amount which he was required to deposit, because on assessment, a notice has already been issued to him. Therefore, it was contended that the liability being absolute and merely in the nature of compensatory payment for retaining what rightly belongs to the State, no further enquiry was necessary and no notice need be issued. Thus, according to the learned Advocate-General, the assessee cannot challenge the notices of demand or the demand for interest on the ground of violation of principles of natural justice. The alternative argument was that, if at all the principles of natural justice have to be complied with, then such a requirement on the part of the assessing authority must be read into the section itself. 26.. We have already taken the view that the payment provided for by section 24(3) is compensatory in character and is not penal in nature. If payment demanded under section 24(3) is not a penalty as generally understood, then in our view, no question of afford ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the default being committed the dealer becomes liable to pay interest under sub-section (2) on the amount of such tax from the last date of filing quarterly returns prescribed under the Act." This decision of the Supreme Court is clear authority for the proposition that where the liability is absolute and tax is not paid from the date on which it becomes due, no notice is further necessary to the dealer because the statutory provision itself fastens the liability. Section 24(3) determines the quantum of interest and the rate at which interest is to be paid and no discretion is left to the authority to relieve the defaulting dealer of the liability under section 24(3). Consequently, in our view, the requirement of natural justice must be expressly held to be excluded by the provision under section 24(3) of the Act. 27.. The learned Advocate-General has also referred us to two decisions in which a similar provision was construed. The first one is a decision of this Court in Abdul Rahim v. Deputy Commercial. Tax Officer [1965] 16 STC 290. This decision dealt with section 24(3) of the Madras General Sales Tax Act, 1959 in which the Bench took the view that levy of penalty by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... left in the assessing authority by the statute itself, there is no question of the exercise of discretion being quasi-judicial and no question of giving notice to the assessee before the exercise of discretion. As we have stated already, the penalty is in the nature of interest by way of damages payable on the defaulted amount at the particular rate mentioned in the section itself......Looking at the case, once again, from the angle of natural justice, we would point out that the statutory provision, we mean section 23(3), excludes the application of the rules of natural justice, and in such cases, we cannot ignore the mandate of the Legislature; the mandate of the Legislature is clear in the language of the section; we cannot read into the concerned provision the rules of natural justice; that will not be consistent with the language of the section: vide Union of India v. J.N. Sinha AIR 1971 SC 40." Rejecting the argument that there should have been mens rea, the learned judges observed as follows at page 435: "We have already stated that, under section 23(3), there is no discretion vested in the taxing authority. If so, even if we construe the penalty under the section as a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, the learned AdvocateGeneral promptly conceded that the correct position of law would be that if a grievance is to be made against a demand under section 24(3), the correctness of that could be canvassed under section 33. There is thus no doubt now that revisional jurisdiction of the Deputy Commissioner is available to a dealer, who may be aggrieved by the demand under section 24(3). 29.. Mr. Natarajan has placed reliance on the decision of the Supreme Court in Kantilal Babulal and Bros. v. H.C. Patel [1968] 21 STC 174 (SC). In this decision, the Supreme Court held that section 12A(4) of the Bombay Sales Tax Act was held to be void because the power conferred under the section was unguided, uncanalised and uncontrolled and was an arbitrary power being violative of article 19(1)(f) of the Constitution. The question which has arisen before us was not the question which arose before the Supreme Court. In any case, it has to be pointed out that a similar provision under section 37 of the Bombay Sales Tax Act, 1959 was held to be valid in Joshi, Sales Tax Officer v. Ajit Mills Ltd. [1977] 40 STC 497 (SC) on the view that the infirmity on account of which a similar section was str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty where the registered dealer collects any amount by way of tax or purpoting to be by way of tax in contravention of the provisions of sub-section (1), whether or not any tax is due from such person or dealer under the Act in respect of the transaction in which he collects such amount, and the penalty can be levied only giving such person or dealer a reasonable opportunity of being heard by order in writing. Section 22(1) is a prohibition against a person who is not a registered dealer to collect any amount by way of tax or purporting to be by way of tax under the Act. Therefore, before the power to levy penalty under sub-section (2) of section 22 is exercised, an enquiry with regard to whether a person has collected any amount by way of tax has to be made and that is why section 22(2) provides for a reasonable opportunity of being heard. 31.. Invoking of article 14 must be ruled out on the short ground that sections 12(3), 12(5), 16(2) and 22(2) do not deal with situation similar to the one covered by section 24(3). While the earlier mentioned sections refer to wilful acts or omission, section 24(3) has no relevance to wilfulness or otherwise in not paying the tax, once it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for limitation to be found in sections 12(5), 16(1)(a) and 22(2), it is argued that no period is prescribed for making a demand for interest under section 24(3) and therefore, section 24(3) must be held as violative of article 14 of the Constitution of India. This argument is canvassed by Mr. Kannan and Mr. Sukantharaj. Undoubtedly, sub-sections (3) and (5) of section 12 as well as sections 16(1)(a) and 22(2) refer to a period of five years for commencement of proceedings under those sections. Under the proviso to section 12(5), no penalty under sub-section (3) and (5) can be imposed after a period of five years from the expiry of the year to which the assessment relates. Under section 16(1)(a) the escaped assessment has to be determined at any time within a period of five years from the expiry of the year to which the tax relates and under section 22(2) a proceeding under that provision cannot be commenced after a period of five years from the expiry of the year in which the amount has been collected. These are the provisions in public interest which disable the authorities from taking steps in the nature of penal action after the expiry of the prescribed period. Such a provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules and the amendment having been made, to quote his words "to follow rule 18(3)", the section must be held to be invalid. Now the validity of a statutory provision can never be determined with reference to a rule, which is subordinate legislation. But the argument which is advanced before us by Mr. Sukantharaj and other counsel necessitates at this stage to consider the scope of section 24(3), both before and after the amendment. We have already indicated earlier the requirement of section 24(3) which in its original form refers to non-payment of "the tax assessed under this Act or any instalment thereof". Section 24(3) being a machinery provision and consequential to section 24(l), it referred to "the tax assessed under this Act" because section 24(l) referred to "the tax assessed under this Act" to be paid in such manner and in such instalments and within such time as may be specified in the notice of assessment. Reading sections 24(l) and 24(3) it is clear that both these provisions contemplated a process of assessment, i.e., actual determination of the tax payable and the tax had to be paid within the time specified in the notice of assessment. 35.. We must first consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted without necessary proof of payment (the proof is stated to be in the form of treasury receipt, crossed cheque, etc.) for the full amount of tax payable after deducting therefrom the amount, if any, claimed as reimbursement or refund due in the month under rule 23, such amount of tax shall become due on the date of receipt of the return or on the last due date as prescribed in sub-rule (2) whichever is later, and shall be recovered in accordance with the provisions of the Act without any notice of demand to the dealer. The scheme of rule 18(3), therefore, is that, whatever is the correct tax payable, according to the dealer, on the basis of his monthly turnover submitted in the return in form A-1, has to be deposited along with the monthly return. If this is not done, then the amount which the dealer should have paid is referred to as "the amount of tax payable". This amount of tax payable is statutorily made due on the date of the receipt of the return or on the last due date as prescribed in sub-rule (2) whichever is later. There is, therefore, no difficulty that the tax which is payable on the basis of the return becomes statutorily payable and it also becomes due on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as casting an obligation to pay the tax which is payable according to the dealer but if the dealer has to be made liable to pay interest for a breach of that obligation, then that cannot be done unless the case falls expressly within the four corners of section 24(3). Consequently, having regard to the plain terms of section 24(3), any failure on the part of the dealer to pay the tax payable under rule 18(3) along with the monthly return, will not automatically attract the liability under section 24(3). 36.. An exercise of amendment of section 24(3) has been gone through and as already pointed out the opening words of section 24(1) and section 24(3) now refer to "the tax assessed or has become payable". It is possible that the introduction of the words "tax has become payable" was intended to cover cases of non-payment of tax which had become payable under the alternative method of assessment in rule 18, and with a view to make the shortfall or tax not paid, payable with interest under section 24(3). This object, however, does not seem to have been achieved because the event which originally attracted the liability under section 24(3), namely, non-payment within the time specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oof of payment as specified in sub-rule (1) of rule 55". This amendment came into effect on 30th December, 1982 and rule 18(3) as it stands today reads as follows: "The return in form A-1 so filed shall, subject to the provisions of subrule (4), be provisionally accepted. If the return is submitted without proof of payment as specified in sub-rule (1) of rule 55-(these are the words introduced by the amendment)-for the full amount of tax payable after deducting therefrom the amount, if any, claimed as reimbursement or refund due in the month under rule 23, such amount of tax shall become due on the date of receipt of the return or on the last due date as prescribed in sub-rule (2) whichever is later, and shall be recovered in accordance with the provisions of the Act without any notice of demand to the dealer." Even this amendment is innocuous for the purpose of giving effect to the amendment made in the substantive provision in section 24(3). Therefore, notwithstanding these amendments in rule 18(3) and section 24(3), we must hold that section 24(3) cannot be attracted in a case in which the tax was required to be deposited in accordance with rule 18(3) in the case of monthly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39.. An argument was advanced by Mr. Kannan that it is only for the first time by introducing section 24(4) the State Government became liable to pay interest in case the tax paid is found to be in excess on final assessment or revision or reassessment, or as a result of an order passed in appeal, revision or review. Under section 24(4), such excess if not refunded to the dealer within a period of ninety days from the date of the order of assessment or revision of assessment or order passed in appeal, revision or review, the Government is obliged statutorily to pay by way of interest where the amount refundable is not less than one hundred rupees, a sum equal to a sum calculated at the rate of one per cent or part thereof of such amount for each month or part thereof after the expiry of the said period of ninety days. The argument is that since this amendment came for the first time by Act 22 of 1982 with effect from 1st November, 1982 the State Government was not entitled to ask the defaulting dealers to pay interest. The absence of a provision in the case of section 24(4) prior to 1st November, 1982 does not create infirmity in the constitutional validity of section 24(3). It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied for its payment". If the Legislature wanted that interest should be payable for the entire month following the default irrespective of the fact that tax is paid at any time before the expiry of the month, then the words "or part thereof" would not have been used by the Legislature. The provision would have been something akin to the provision in section 8 of the Jammu and Kashmir General Sales Tax Act, where the explanation is added in section 8(2) which reads as follows: "Interest shall be charged for full month and not for a part of the month." The use of the words "part thereof" specifically used in section 24(3) would clearly show that the Legislature intended that interest would be payable for the actual period of delay. Thus if the delay is one month and ten days, the interest payable will not be for two months, but it will be only for one month and ten days. Even the instructions issued by the Government in Commercial Taxes Manual (1979 Edition) at page 52 show that while charging interest only the actual number of days of delay is to be taken into account. The taxing authorities are, therefore, not justified in construing section 24(3) as authorising them to recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1982, 183 of 1982, 184 of 1982 and 687 of 1982 and W.P. No. 6753 of 1981. Similarly, the following petitions wherein apart from the challenge to section 24(3), demands had been made for interest by dealers who have given returns under rule 18(3), those petitions are partly allowed to the extent that the demands are quashed and the petitions are rejected partly in so far as the challenge to the constitutional validity of section 24(3) is concerned: W.P. Nos. 3176 of 1982, 3092 of 1982, 3093 of 1982, 310 of 1983, 311 of 1983, 8867 of 1983, 10995 of 1983, 10996 of 1983, 7908 to 7910 of 1983, 9009 of 1983, 9547 to 9553 of 1982, 12026 to 12028 of 1983, 6636 to 6645 of 1982, 10184 of 1983, 9931 of 1983, 8619 of 1982, 5673 of 1983 and 9074 of 1983. In so far as W.P. No. 2993 of 1982 wherein interest has been demanded for the entire month for which tax has been paid during the course of the said month, the demand is quashed and the matter is remanded back to the appropriate authority for computing the interest payable in accordance with our decision rendered above. W.P. No. 11202 of 1983: Counsel for the petitioner states that the matter has become infructuous. Hence this petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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