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TMI Blog1992 (7) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... onal sum of Rs. 95,410 as penalty under section 24(3) of the Act. Aggrieved by the said demand, the appellant filed W.P. No. 13523 of 1989. Learned single Judge by order dated October 24, 1989 dismissed the writ petition, holding that the matter was covered by the decision of Division Bench of this Court and the claim for refund made by the appellant had nothing to do with the penalty demanded and it was entirely a different matter for which the appellant should initiate separate proceedings. 2.. It is the said order of the learned single Judge that is challenged in this appeal. The judgment of the Division Bench referred to by the learned Judge is in Sakthi Sugars Ltd. v. Assistant Commissioner of Commercial Taxes [1985] 59 STC 52 (Mad.) which considered the validity of section 24(3) of the Act. Before referring to the relevant portions of the judgment of the Division Bench, it is necessary to set out the relevant provisions of the Act. 3.. Section 24(3) as it stood originally read thus: "If the tax assessed under this Act or any instalment thereof is not paid by any dealer or person within the time specified therefor in the notice of assessment or in the order permitting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, not being less than 21 days from the date of service of the notice. The tax under subsection (2) of section 13 shall be paid without any notice of demand and in default of such payments, the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax or interest under the Act. 4.. Section 13(2) is to the following effect: "In lieu of the tax provisionally determined under sub-section (1), a dealer may, at his option, pay tax in advance during the year on the basis of his actual turnover for each month or for such other periods as may be prescribed. For this purpose, he may be required to furnish returns showing his actual turnover for each month or other periods as may be prescribed and to pay tax on the basis of such returns. The tax under this sub-section shall become due without any notice of demand to the dealer on the date of receipt of the return or on the last due date as prescribed, whichever is later." For enforcement of section 13(2) rules have been framed and the rule with which we are concerned is rule 18 of the Tamil Nadu General Sales Tax Rules. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or incomplete, the assessing authority shall, after making such enquiry as he considers necessary and after giving the dealer notice as prescribed in rule 12, determine the turnover to the best of his judgment and provisionally assess the tax or taxes payable for the month and shall serve upon the dealer a notice in form B2 and the dealer shall pay the sum demanded at the time and in the manner specified in the notice." 5.. Now, we will turn to the relevant observations made by the Division Bench in Sakthi Sugars Ltd. v. Assistant Commissioner of Commercial Taxes [1985] 59 STC 52 (Mad.). One of the contentions urged before the Bench was that section 24(3) was invalid as it did not provide for an opportunity to the person concerned to make his representations before the penalty is imposed on him under the said sub-section. Dealing with this contention, the Division Bench observed thus: "The learned Advocate-General, therefore, contended that if section 24(3) is properly read, since any action thereunder does not involve penal consequences, there was no question of natural justice or an opportunity to show cause being extended because the assessee knows that he has not deposite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of quarterly return shall be paid before the expiry of the last date of filing such return and the amount of tax thus becomes payable at the latest from the expiry of the last date of filing quarterly return. Hence under sub-section (2) the dealer would be liable to pay interest on the amount of such tax from the date when it was payable, i.e., from the expiry of the last date of filing quarterly return of the Act. Of course, sub-section (2) refers to the notice of demand but that obviously relates to sub-section (1) where notice of demand is required to be issued after the assessment of tax is completed and the amount of tax assessed becomes due only after the issue of notice of demand as provided in sub-section (1) but there is no such requirement in the case of payment of tax due on the basis of quarterly return to be filed by the dealer. It is solely governed by sub-section (3). Where the tax due on the basis of quarterly return is not paid before the expiry of the last date of filing such return under the Act, it is not necessary to issue any notice of demand but on the default being committed the dealer becomes liable to pay interest under sub-section (2) on the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition to the amount due, interest at 2 per cent per month on such amount for the entire period of default. Even the liability to pay interest is not only automatic, but the section enjoins a liability on the part of the dealer to pay the interest in addition to the amount due by way of tax under section 24(3). 7.. Learned counsel submits that on a reading of sub-rules (3) and (4) of rule 18 together, it will be clear that in case where there is no proof of payment of tax of any amount, which is payable under the return, there must be a proceeding for assessment and it is only after an assessment is made, penalty can be imposed. According to him, the case in which a dealer claims refund of certain amounts on account of alleged excess payment made in a prior year, would fall under sub-rule (4). Learned counsel submits that unless proof of payment is submitted along with the return, the return itself is incomplete within the meaning of sub-rule (4). 8.. We have already extracted the relevant rules. We are of the view that sub-rule (4) will come into play only if the return is not filed within the date specified or if the return is incorrect or incomplete. Sub-rule (4) will not cov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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