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TMI Blog1987 (8) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... 12(3) of the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as "the Act", in respect of the assessment years 1960-61 to 1963-64 and under section 16(2) of the Act in respect of the assessment year 1964-65. The firm preferred appeals against the reassessment orders and penalty in respect of the assessment years 1960-61 to 1963-64 and the assessment order and penalty in respect of the assessment year 1964-65 to the appellate authority. Simultaneously, they also filed writ petitions in this Court in W. P. Nos. 1324 of 1966, 1433 of 1966, 739 of 1970, 740 of 1970 and 1377 of 1966. These writ petitions were allowed in part and the order of assessment in respect of each one of the years in so far as it related to the imposition of penalty under section 12(3) of the Act was quashed by a Division Bench of this Court. The assessment in respect of the assessment year 1964-65 in so far as it related to penalty under section 16(2) of the Act was not quashed. In the appeals which were heard by the Appellate Assistant Commissioner, Salem, the Appellate Assistant Commissioner confirmed the assessment by his order dated 14th June, 1971 but set aside the levy of penalty under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nkari or by crossed demand draft or crossed postal order or to the Commercial Tax Officer/joint Commercial Tax Officer/Deputy Commercial Tax Officer/Assistant Commercial Tax Officer or to the Sales Tax Collection Inspector, failing which the amount will be recovered as if it were an arrear of land revenue or fine imposed by a Magistrate. Details of arrears --------------------------------------------------------------------------- Year or month Amount of tax Period for which Amount of for which tax arrears payment was penalty was due delayed --------------------------------------------------------------------------Place: Sankari. Sd. Deputy Commercial Tax Officer, Date: 5-3-1981. Sankari. Note: Where payment is made by cheque, the cheque shall be crossed and shall be such as under the Madras Treasury Code and is receivable by the Government Treasury concerned. ------------------------------------------------------------------ Amount Period Total Per cent of Penalty months penalty amount ------------------------------------------------------------------ 68,758.84 25-3-66 to 6 days per cent 344.00 31-3-66 68,758.84 1-4-66 to 2 months per cent 688.00 31-5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin 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 penalty, in addition to the amount due a sum equal to- (a) half a per cent of such amount, for each month or part thereof for the first three months after the date specified for its payment; (b) one per cent of such amount, for each month or part thereof subsequent to the first three months aforesaid." The assessment orders now in question being for 1964-65 and earlier years, section 24, extracted above, is the relevant provision. The notice of assessment is to be in form B-3 and that reads as follows: "Form Prescribed under the Madras General Sales Tax Rules, 1959. Issued under the Madras General Sales Tax Act, 1959 (Madras Act 1 of 1959). FORM B-3 Notice of final annual assessment and demand. (See Rules 16 and 18) To (Dealer) Assessment No. Take notice that you have been finally assessed under the Madras General Sales Tax Act, 1959, to a tax of Rs.............. (rupees..................) (in words) only for the year ending..................................and that after deducting the total amount of the monthl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as introduced at that time, read as follows: "FORM B-7 Notice of revision of assessment and demand. (See Rules 32 to 34) To Sri (Dealer). Please take notice that consequent on the modification of the original assessment made on appeal by the Appellate Assistant Commissioner/Sales Tax Appellate Tribunal/High Court or on revision by the Deputy Commissioner/ Board of Revenue or any other authority, in his/its order No........................... dated the........................ the tax due from you is Rs................................. (rupees.....................) (in words) only for the year ending.....................and that after deducting the total amount of the payments already made by you towards the tax for that year, you have to pay a further sum of Rs................ (rupees.......................) (in words) only. This balance of tax shall be paid within thirty days from the date of service of this notice by inland money order (sales tax) in favour of the Sub-Treasury Officer or the Treasury Officer concerned or by crossed cheque in favour of the undersigned or by remittance into the Government Treasury at............... or by crossed demand draft or by cros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision relied on by the learned Additional Government Pleader, was not there in the statute book during the assessment years 1960-61 to 1964-65 which are in question and, therefore, the learned Additional Government Pleader could not rely on the language employed in this provision in support of his argument. As per the provisions of section 24 which existed during the relevant assessment years which we have extracted above, the dealer shall pay by way of penalty if he fails to pay the tax or any instalment thereof within the time specified therefor in the notice of assessment or in the order permitting payment of instalment. In this case, the notice of assessment referred to in sub-section (3), if it is taken as the one issued in form B-3 at the time when the original assessment was made, had included not only the tax but also the penalties under sections 12(3) and 16(2) of the Act. As already stated, the appeal preferred against the assessment order was allowed in part and the penalty was set aside and, therefore, a fresh demand notice should be issued in terms of the appellate order by the assessing officer in order to call the assessee a defaulter in case the amount is not paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent and for the remaining period at one per cent for each month of default. It is not open to the department now to rely on the amendment made in 1977 increasing the interest from 1 per cent to 2 per cent. That will be applicable only prospectively in respect of penalties levied subsequent to the amendment and not with reference to the earlier assessments. 9. Learned Additional Government Pleader, however, contended that so long as the amount is not paid, whatever be the interest payable will have to be calculated at the rates provided with reference to the provision in force on that date. In fact, the learned Additional Government Pleader was willing to accept that if the interest is reduced, then the defaulter may be entitled to a reduced penalty and not the original penalty. We are unable to agree with this contention. The penalty or liability to pay interest is incurred with reference to the assessment year and the date of demand and the default and not with reference to any subsequent period that may arise. If it was not a penalty as on date, nothing can make him liable on a future date. But if on the other hand, he has incurred the liability, that liability will susta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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