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TMI Blog1989 (8) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... h August, 1976. Complying with this order the dealer filed his return and paid the tax on 5th August, 1976. However, the Assessing Authority was of the view, inspired by the decision of the Final Court in Haji Lal Mohd. Biri Works v. State of U.P. [1973] 32 STC 496, that under section 25(5) of the Act the assessee became liable to pay interest on the amount of tax which became due and was not paid with effect from the date prescribed for filing the return. Liability to pay interest on the unpaid tax is created by the statute and the Assessing Authority has no discretion to grant any exemption from payment of any interest. The liability to pay interest is automatic and arises by operation of law. He held that the dealer was liable to pay Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... August, 1976, though having been granted extension of time by the appropriate authority?" In order to resolve the legal issue posed in the question it will be apposite to read the relevant statutory provisions. "25. Submission of returns and payment of tax.-(1) Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals, as may be prescribed. (2) Such dealer as may be required to do so by the Assessing Authority by notice served in the prescribed manner and every registered dealer shall furnish such returns by such dates and to such authority, as may be prescribed. (3) Before any registered dealer furnishes the returns required by sub-section (2), he shall, in the prescribed manner, pay into a Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at the headquarters of the appropriate Assessing Authority or at the head office of the business of the dealer in respect of tax and surcharge due according to return; (ii) a list in form S.T. 12 showing the sale of goods leviable to tax at the first stage of sale or purchase and certificates in forms S.T. 13 and S.T. 14 or duplicate copy of the cash memo, or bill, as the case may be. 62.. Where in these rules a period is prescribed for doing a certain act, the appropriate authority may, for special reasons to be recorded in writing, extend that period from time to time." It is clear from a perusal of the above quoted statutory provisions that a dealer is liable to pay tax in the manner provided at such intervals as may be prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed and the dealer was permitted to do the needful by 6th August, 1976. The dealer complied with this order and furnished the return and paid the tax in accordance therewith on 5th August, 1976, i.e., well within the time prescribed. It is true that in accordance with sub-section (5) of section 25 of the Act the dealer would have incurred a liability to pay interest on the tax due with effect from 30th July, 1976, if he had not applied for extension. 30th July, 1976, was the prescribed date. However, the competent appropriate authority extended the period prescribed for filing the return and payment of tax. Resultantly, the prescribed date for filing the return and payment of tax was shifted from 30th July, 1976 to 6th August, 1976. Und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case their Lordships of the Supreme Court while construing the provisions of section 8(1-A) of the U.P. Sales Tax Act, 1948, which had been framed on the lines of section 25(5) of the Act, held that the liability to pay interest under section 8(1-A) is automatic and arises by operation of law. There was nothing in the language of section which prevents the recovery of interest because of any stay order. The liability to pay interest is created by the statute and the Sales Tax Officer has no discretion to grant any exemption from payment of interest. It had been argued in that case that interest on arrears of tax could not be realised for the period during which the recovery of tax remained stayed. In the present case recovery of arrears ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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