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TMI Blog1986 (3) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... Central sales tax of approximately Rs. 14 lakhs on or before the said date. Before the expiry of the said period the applicants by their letter of 31st October, 1967, applied for extension of time for making the said payments. As a result of the said application the applicants were granted time as prayed for. The respondents in their letter of 25th November, 1967, while granting such extension stated as follows: "It has been decided to grant you the instalments asked for without prejudice to levy of penalty by the sales tax department on account of late payment of the tax amount". The applicants were directed to pay Rs. 16,50,000 on or before 15th December, 1967, and Rs. 16,50,000 on or before 15th January, 1968. Similar extensions for payment of tax due and payable as per return were also asked for the other three quarters and such extension was granted. The applicants paid the tax approximately within the extended period so granted to them though in case of some instalments there is a delay of 4 or 5 days in payment of instalments, even after the extended period. 2.. The applicants were assessed by the Sales Tax Officer under section 33 of the Bombay Sales Tax Act, 1959, for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 MARCH 8,80,863 7.05.68 30.6.68 13.07.68 15.07.68 15.07.68 18.7.68 8.7.68 32B-025392 --------- 22,30,863 --------- (4) APRIL12,00,000 7.08.68 30.07.68 15.08.68 14.08.68 14.08.68 14.08.68 20.08.68 20.8.68 32B-035680 JUNE 7,37,595 15.10.68 15.10.68 15.10.68 15.10.68 21.10.68 21.10.68 32B-006926 --------- 19,37,595 -------- 4.. In this chart amounts due under the Central Sales Tax Act for the said period are not set out. Thus for the first quarter ending on 30th September, 1967, the applicants were liable to pay an estimated sum of Rs. 18,56,900 as sales tax under the Bombay Act on or before 7th November, 1967. They applied for an extension of time for payment of the same by their letter dated 30th October, 1966 (31st October, 1967). They were granted extension for the payment of the first instalment of Rs. 10,50,000 up to 15th December, 1967, and they were granted extension of time for the payment of the second instalment of Rs. 8,06,900 up to 15th January, 1968. Both these amounts have been paid a few days later than the extended date as per the stamped date on the challan. The order of extension which is dated 25th November, 1967, sets out that the extension ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts extension is a conditional order. It sets out that the extension granted is subject to penalty leviable under section 36(3) of the Bombay Sales Tax Act, 1959, and section 9(3) of the Central Sales Tax Act, 1956. 8.. Thus the orders of extension of time for the first, third and fourth quarters of the said period are all conditional orders of extension of time, the condition being that such extension of time is subject to payment of penalty inter alia under section 36(3) of the Bombay Sales Tax Act, 1959. The order of extension for the second quarter, however, is an unconditional order. 9.. Under section 38, sub-section (2) of the Bombay Sales Tax Act, 1959, a registered dealer is required to pay the whole of the amount of tax due from him according to the return. Under section 38(4)(a)(i), "The amount of tax due where returns have been furnished without full payment thereof.........shall be paid by the dealer or the person liable therefor into a Government treasury, by such date as may be specified in a notice issued by the Commissioner for this purpose, being a date not earlier than thirty days from the date of service of the notice: Provided that, the Commissioner......ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the said Act. Hence when an order is passed unconditionally extending time for payment of tax, no penalty can be levied under section 36(3) if tax is paid by the dealer within the extended time. 13.. In the case of Abdul Shakur Umar Sahigara Co. v. Commercial Tax Officer, Additional Circle, Mangalore reported in [1968] 21 STC 77 the High Court of Mysore at Bangalore was required to consider a case where the Commercial Tax Officer directed the petitioner to pay the tax assessed within 21 days from the date of the notice. Before the expiry of that period the petitioner applied for extension of time for payment of tax by instalments. Initially Government made an order directing the Commercial Tax Officer to allow the petitioner to pay the arrears of tax in six instalments along with the usual penalty. Thereupon the petitioner applied for deletion of the direction relating to penalty from the order. As a result the original order was modified, and the Commissioner of Commercial Taxes was informed by the Government that the petitioner might be allowed to pay tax in instalments and the question of penalty may be considered afterwards. The court held that as a result o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licants to pay tax for this quarter within the time he was required to pay the same under the Act. No penalty can, therefore, be levied in respect of the tax payable for this quarter. 17.. In respect of the other three quarters, however, the orders of extension are conditional. In terms they set out that the extension of time is subject to penalty under section 36(3) of the said Act. In these cases, therefore, the applicants cannot contend that they are not liable to pay penalty under section 36(3) of the Bombay Sales Tax Act by virtue of the orders of extension. Mr. Hemendra Shah, learned counsel for the applicants, contended that even when there is a conditional extension of time it must be held that the dealer had a reasonable cause for non-payment of tax within the prescribed time. Hence penalty could not be levied under section 36(3). Under section 36(3) penalty can be levied only if a dealer, without reasonable cause fails to pay tax within the prescribed time. In our view, since the orders of extension stipulate that penalty is liable to be imposed in spite of extension, there can be no presumption that the dealer had a reasonable cause for non-payment which would absolv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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