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TMI Blog1996 (9) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings under the Central Sales Tax Act. It is not in dispute that the assessments both in respect of the U.P. and Central Sales Tax Acts for the year in question were made by a common order dated August 28, 1980 on best judgment. The turnover under the U.P. Sales Tax Act was assessed at Rs. 10,000 against the admitted turnover of Rs. 9,191.04 and at Rs. 5,25,000 under the Central Sales Tax Act against the turnover of Rs. 4,75,566.26 as per account books of the assessee. After the completion of assessments aforesaid, the assessing authority initiated proceedings under section 22 of the Act and served notices in September, 1981, upon the assessee, stating, inter alia, that in the assessment order dated August 28, 1980 by an inadvertence th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts aforesaid. The assessee was brought on record as a result of the survey which was conducted on the business premises of the assessee on August 27, 1980. From the account books produced during the survey it transpired that the assessee had a taxable turnover of Rs. 9,191.47 under the U.P. Sales Tax Act and a turnover of Rs. 4,75,565.26 under the Central Sales Tax Act. It was on account of that survey that the assessment order dated August 28, 1980 was passed of which reference has been made earlier. 6.. Now sub-section (1) of section 8 of the Act, inter alia, provides that the tax admittedly payable shall be deposited within the time prescribed, failing which simple interest at the rate of two per cent per mensem shall become due and be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the scrutiny that will make the mistake apparent, provided the scrutiny is confined to the record as it is. The section further does not provide for rectification because of discovery of new material. There is no dispute that under section 22 mistakes of fact as well as of law, both can be rectified. 9.. In Haji Lal Mohd. Biri Works v. State of U.P. [1973] 32 STC 496 the Supreme Court has held that the liability to pay interest is automatic and arises by operation of law in case the default is committed. The amount of interest cannot be predicted till such time the payment of tax is made. But on the other hand, it was known to the dealer that what would be the amount of interest in case they do not pay the full tax for the period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax was also not deposited under the relevant provision of the Assam Act. The provision about the payment of interest under that Act was contained in section 22-A which is somewhat similar to subsection (1) of section 8 of the U.P. Sales Tax Act. Their Lordships of the Division Bench observed as under: "...........the actual tax payable by the dealer and the interest that accrued for such non-payment of tax makes an order on a total assessment of tax which is recoverable from the dealer for a particular period or quarter as the case may be. The levy of interest as it accrues in case of default in payment of tax is also a part of tax because it is a statutory obligation on the part of the dealer to pay interest in case of default. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f clause (iii) of the proviso to section 139(1)(b) it was clear that there was an obligation on the Income-tax Officer to levy penal interest in the manner stated in sub-clauses (a) and (b) of the clause, if the assessee failed to furnish his return before the date as extended under clause (i) or (ii) of the proviso.......... Therefore, the Income-tax Officer had the power to initiate rectification proceedings and levy penal interest as he did, since the omission on his part at the time of the original assessment was an error apparent from the record, because the relevant provision of penal interest is a mandatory provision of law." 15.. In Commissioner of Income-tax v. Tiwary Bechar and Co. [1987] 165 ITR 78 (Pat) where the Income-tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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