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TMI Blog1999 (5) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... ut forward during the course of assessment proceedings. 3.. Learned counsel for the Revenue conceded to the extent the grievance of the petitioner is related to the demand of penalty admitting the fact that no assessment order has been made so far, and that until liability of the assessee to pay tax is determined, or any order levying penalty under section 45 or 46 of the Act is made in appropriate proceedings, no demand asking the assessee to make any amount by way of penalty could have been raised. He therefore candidly states that notice dated February 15, 1999 raising a demand of Rs. 2,92,47,252 by way of penalty under section 45/46 of the Act is premature. 4.. However, he contends that under section 47(4A) of the Gujarat Sales Tax Act, the liability to pay interest on delayed payment of tax is automatic, therefore demand raised by notice dated December 17, 1998 for payment of interest is valid one. However, he does not dispute that ultimate liability of interest can only relate to the ultimate assessment of tax in regular assessment proceedings. He relies on sub-section (4A) of section 47 of the Gujarat Sales Tax Act, 1969: Section 47 reads as under: 47. Payment of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such tax shall be deemed in the public interest, to have been paid. (4A)(a) Where a dealer does not pay the amount of tax within the time prescribed for its payment under sub-section (1), (2) or (3), then there shall be paid by such dealer for the period commencing on the date of expiry of the aforesaid prescribed time and ending on date of payment of the amount of tax, simple interest at the rate of twenty-four per cent per annum on the amount of tax not so paid or on any less amount thereof remaining unpaid during such period. (b) Where the amount of tax assessed or reassessed for any period, under section 41 or section 44, subject to revision if any, under section 67, exceeds the amount of tax already paid by a dealer for that period, there shall be paid by such dealer, for the period commencing from the date of expiry of the time prescribed for payment of tax under sub-section (1), (2) or (3) and ending on date of order of assessment, reassessment or, as the case may be, revision, simple interest at the rate of twenty four per cent per annum on the amount of tax not so paid or on any less amount thereof remaining unpaid during such period. (c) Where a dealer does not pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest which remains unpaid after the date specified in the notice for payment, or after the extended date of payment, and any instalment not duly paid, shall be recoverable as an arrear of land revenue (6) This section as amended by section 5 of the Gujarat Sales Tax (Amendment) Ordinance, 1991 (Gujarat Ordinance No. 3 of 1991) shall apply and shall be deemed always to have applied in relation to the liability to pay tax on sales of goods, specified sales and purchases of goods which have taken place during the period commencing on the 1st April, 1990 and ending immediately before the commencement of the said section. 5.. Sub-section (1) of section 47 requires tax shall be paid in the manner provided, under the following provisions of section and at such intervals as may be prescribed. Rule 25 provides the intervals at which tax is to be paid. Subsection (2) of section 47 requires that a registered dealer furnishing declarations or returns as required by sub-section (1) of section 40, shall first pay into a Government treasury, in the manner prescribed the whole amount of tax due from him according to such declaration or return. Section 40 mandates that every registered dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons (1), (2) and (3) of section 47. No liability to pay interest on the additional sum of tax required to be paid under sub-section (3) of section 47 is envisaged at that stage under section 47(4A). 10.. Clause (b) provides where the amount of tax assessed or reassessed for any period under section 41 or section 44, subject to revision if any under section 67, exceeds the amount of tax already paid by a dealer for that period, there shall be paid by such dealer, for the period commencing from the date of expiry of the time prescribed for payment of tax under sub-section (1), (2) or (3) and ending on date of order of assessment, reassessment or, as the case may be, revision, simple interest at the rate of twenty-four per cent per annum on the amount of tax not so paid or any less amount thereof remaining unpaid during such period. Obviously sub-clause (b) has no role to play in the present case inasmuch as it comes into operation after the amount of tax has been assessed or reassessed and no assessment having taken place sub-clause (b) cannot operate. 11.. Sub-clause (c) of sub-section (4A) envisage yet another circumstance in which a dealer is liable to pay interest. Where a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not impressed by the contention of the learned counsel for the respondent that no enquiry was necessary so as to require an opportunity of hearing being given to the assessee before computing the amount of interest on the alleged delayed payment of tax. 16.. This case demonstrates the fallacy of the contention. Firstly, the assessee is entitled to show that in fact there is no delay in payment before he is asked to pay interest, secondly, he is also entitled to show, and which right learned counsel for the respondent does not dispute, that in fact the assessee has no additional tax liability which he was liable to pay and he is in fact entitled to a refund. That is a question that is to be determined only after affording an opportunity to the assessee by the assessing officer during the course of assessment. 17.. Duty to act fairly is inherent in every State action. We have not been shown any provision of law which authorises the Sales Tax Officer to straightaway issue notice without determining and without disclosing existence of necessary facts which brings operation of sub-section (4A) to take shelter behind the specious plea that levy of interest is automatic. The levy of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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