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TMI Blog1992 (6) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... hotel. On 7th September, 1978, in Northern India Caterers' case [1978] 42 STC 386 (SC), the same principle was applied declaring that restaurants are also not liable to sales tax in respect of the supply of food and drinks. To get over the difficulty caused to the State revenue, the Constitution was amended by the Constitution (Forty-sixth Amendment) Act, 1982, which came into force on 2nd February, 1983. Clause (b) [section 6(1)] of the Amendment Act, inter alia, validated the tax levied or collected in respect of the turnover relating to the supply of food and drinks. However, sub-clause (2) of this section 6 provides for some relief to a few dealers who had not collected the tax from their customers after the respective judgments of the Supreme Court. A composite hotelier if proves that he did not collect any sales tax from his customer for the supply of food and drink, is eligible to the exemption from the levy for the period 4th January, 1972 to 1st February, 1983 and a similar exemption is given to restaurants for the period 7th September, 1978 to 1st February, 1983. 2.. In the instant case, the appellant had paid a part of the amount demanded under the earlier assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to the learned Government Advocate, it is only when there was an order of assessment earlier without a further issuance of demand notice, clause 13 gets attracted. By relying on section 13, it was further contended that payment of penalty under the said proviso is nothing but payment of an interest and this liability got statutorily attached as and when the assessee fails to comply with the demand. 5.. To appreciate the rival contentions, it is necessary to refer to the aforesaid clause 13, which reads as follows: "Recovery of arrears of tax: 13.. As regards the sales tax levied in the assessment orders already concluded in respect of transactions of 'supply of articles of food and drink' (other than such supplies which would be eligible for exemption from tax during the period from 7th September, 1978 to 1st February, 1983 or from 4th January, 1972 to 1st February, 1983), it may be noted that the sales tax so levied gets revived by virtue of the validation clause of the Constitution (Forty-sixth Amendment) Act. For purposes of recovery of such taxes which are outstanding, all that is now required of the assessing officers is to intimate the hoteliers/restaurateurs co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lour from the context in which it occurs. A word is not a crystal with a definite and unalterable meaning to be applied mechanically to all and every situations in one and the only way. The rationale for providing for payment of interest has also been explained by this Court referring to the principles expounded by Cooley in his classic treatise on 'Taxation' in Sterling's case [1973] 32 STC 235. The Income Tax Laws in India and United States of America also provide for the same (vide World Tax SeriesTaxation in India by Harvard Law School, Chapter 13, para 13/7.1 and 7.2 at pages 391 and 392 and Taxation in the United States published by Harvard Law School, Chapter 13, para 13/7.1 at page 1262). The object is to deter a dilatory assessee, as the very petitioner, to make prompt payment of taxes found due to the State to meet the ever growing and almost insatiable demands and in default to make compensation for delayed payments. When one examines the same in that context, as that should be, applying the progressive rule of construction of statutes that has now come to stay, which has been very felicitously expressed by Lord Denning in Seaford Court Estates Limited v. Asher [1949] 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not complied with. We appreciate the purpose behind the issuance of this Circular instruction since it is a fair procedure adopted by the Commercial Tax Department. Having devised such a fair procedure, it should cover the cases of all assessees who were entitled to take benefits of the declaration of law by the Supreme Court in the two decisions. A simple notice to each of the assessees is to remind him of the constitutional amendment and the consequences flowing therefrom. Only because, a few of the assessees were issued with demand notices earlier does not mean that they do not require any reminder of the liability revived by the amendment made to the Constitution. 10.. Learned Government Advocate relied on Sha Jayantilal Khesti v. Additional Commercial Tax Officer [1966] 2 Mys LJ 614 wherein this Court held that the liability under section 13 is automatic and statutory and the liability to pay the penalty accruing thereunder is ancillary to the assessee's liability to pay the tax and the penalty payable becomes a part and parcel of the tax itself. In the instant case, question is not whether the liability to pay the penalty got attached by itself, by virtue of the demand no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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