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TMI Blog1987 (5) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal which has been allowed by the impugned order. The Tribunal has set aside the order passed by the Assistant Commissioner (Judicial) and restored the order passed by the assessing authority. It further directed that if the assessee had not deposited the admitted tax, the same shall be realised from the assessee. Learned counsel for the assessee has assailed the aforesaid order passed by the Tribunal in this Court. A preliminary objection has been taken by the learned Standing Counsel that under the law no appeal lay to the Assistant Commissioner (Judicial) against the calculation of interest made by the Sales Tax Officer under section 8(1) of the U.P. Sales Tax Act (hereinafter referred to as "the Act"). This objection is sought to be met by the learned counsel for the assessee on the ground that the interest accrued in the present case is a part of the tax assessed by the Sales Tax Officer by virtue of sub-section (1-C) of section 8 of the Act. The learned Standing Counsel in reply submits that under section 9 of the Act an appeal lies against a person aggrieved by an order made by the assessing authority. He further contends that having regard to the facts of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised return. If, however, the revised return shows lesser amount of tax to be due than was shown in the original return, the dealer may adjust the excess amount from the tax due for the subsequent period. (2) If the assessing authority, after such inquiry as he considers necessary, is satisfied that any returns submitted under sub-section (1) are correct and complete, he shall assess the tax on the basis thereof. (3) If no return is submitted by the dealer under sub-section (1) within the period prescribed in that behalf or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall, after making such inquiry as he considers necessary, determine the turnover of the dealer to the best of his judgment and assess the tax on the basis thereof. Section 8. Payment and recovery of tax.-(1) The tax admittedly payable shall be deposited within the time prescribed or by the thirty-first day of August, 1975, whichever is later, failing which simple interest at the rate of two per cent per mensem. shall become due and be payable on the unpaid amount with effect from the day immediately following the last date prescribed or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to a dealer under the provisions of this Act, shall first be adjusted towards the principal amount of tax, fee, penalty or other dues outstanding against him and the excess, if any, shall then be adjusted towards the interest, if any, due from him." A review of the relevant provisions of the Act extracted above would indicate that according to the scheme of the Act every dealer who is liable to pay tax under the Act is obliged to submit returns of his turnover and he is further required by law to deposit in the prescribed manner the amount of tax due on the turnover shown in the returns before submitting the returns in question. Sub-section (1-B) of section 7 of the Act deals with a situation where an extension for the submission of the returns has taken place on the application of an assessee or the deposit of admitted tax in accordance with the return is deferred. At the same time under this sub-section the legislature has taken care to recoup itself for the loss to the State exchequer because of the delay that takes place in the deposit of the admitted tax on account of either the extension being granted to the assessee for the submission of the return or the deposit of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of the tax admittedly payable simple interest at the rate of 2 per cent per month becomes due and payable on the unpaid amount as per the conditions prescribed in the said sub-section. In case of difference between the returned turnover and the turnover of sales or purchases as reflected in the account books, the explanation to sub-section (1) of section 8 of the Act further provides that in such a situation the admitted tax will be calculated on the amount of turnover whichever shown is greater as aforesaid under subsection (1-C) of section 8 of the Act, the amount of interest payable under sub-sections (1) and (2) of section 8 of the Act is to be added to the amount of tax charged and leviable on the dealer. In the later part of this subsection there is a legal fiction to the effect that such amount of interest shall be deemed for all purposes to be part of tax. Under sub-section (2) of section 8 of the Act the legislature has taken specific care to provide and make it obligatory on the part of the dealer to pay the interest on the disputed amount of tax referred to in sub-section (1-B) thereof irrespective of the fact that realisation of any tax remained stayed by any ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a part of the tax. ......It would thus appear that the liability to pay interest is automatic and arises by operation of law. The amount of interest on the date of payment of tax is not constant, but increases from day to day. The amount of interest can, therefore, be not predicated till such time as the arrears of sales tax are paid and it is consequently not possible to specify a definite figure in respect of the interest in the recovery certificate. At the time the arrears of sales tax are paid, there can be no difficulty in finding the amount of interest which has become due. The amount of tax on which interest is to accrue, the rate of interest, the date from which interest is to commence and the date up to which interest is to be counted are all known. It is, therefore, a matter of mere arithmetical calculation to arrive at the figure of interest. We find nothing in any of the provisions of the Act as may warrant making of another assessment order by the Sales Tax Officer regarding the amount of interest or making it obligatory for him to issue a demand notice in respect of the interest before sending the recovery certificate to the Collector. We are also not impresse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same as the interest in question assumes the character of a tax assessed. To my mind in view of the aforesaid cases there is a fallacy in the said argument advanced on behalf of the assessee. On the other hand, from the quotation made above in the case of Haji Lal Mohd. Biri Works [1973] 32 STC 496 (SC); 1973 UPTC 690 (SC), it is clear that the Sales Tax Officer is not obliged to make assessment in respect of the interest. It has further been held that there is no provision in the Act which requires a notice of demand in respect of the interest by the Sales Tax Officer. The liability to pay the interest is automatic on the happening of the contingency/contingencies provided by the Act which arise by operation of law. Once the charge of interest is made out, the amount of interest is not constant but keeps on increasing day by day till the ultimate date of payment of the unpaid tax in question. The Sales Tax Officer has no discretion either to reduce or grant any exemption from payment in respect of the statutory liability to pay interest. This brings me to the next question as to whether an order is necessary for the charge of interest. The case of Haji Lal Mohd. Biri Work ..... X X X X Extracts X X X X X X X X Extracts X X X X
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