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TMI Blog2009 (3) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... mit such return within the prescribed period of time. The manner and time for filing quarterly returns have been prescribed by rules 34 and 35 of the West Bengal Value Added Tax Rules, 2005 (hereinafter referred to as, the VAT Rules ). Insertion of the provisions for payment of penalty in sub-section (2) of section 34 was questioned by some dealers in R. N. 406 of 2007 before this Tribunal. During pendency of R. N. 406 of 2007, sub-section (2) of section 32 was again amended by the West Bengal Finance Act, 2008 by deleting the provision for penalty and introducing payment of late fee at prescribed rate for delayed filing of return. As the provision for payment of penalty was substituted by the provision for payment of late fee by a new Amendment Act R.N. 406 of 2007 was disposed of by this Tribunal with the following order: Under the amended provision, late fee is imposable instead of penalty. In view of such amendment at present there is no provision for imposition of penalty from April 1, 2007. Accordingly, the question raised in this application has become academic and is not required to be decided. In all these three applications the petitioners have questioned the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05 (in short, the VAT Rules ) has prescribed that returns are to be filed quarterly in form 54 within the next English calendar month from the date of expiry of each quarter. In cases where dealers have been permitted to file monthly returns such monthly returns are to be filed within 21 days from the expiry of the month in respect of which return is required to be furnished. There were no provisions allowing submission of return after such prescribed period prior to April 1, 2007. Under sub-section (2) of section 32 a dealer is required to pay full amount of net tax, interest, penalty payable according to the return and to submit a receipt showing payment of payable tax, interest and penalty along with the return. If any dealer does not file return within the prescribed time his tax liability for the relevant return period is to be provisionally assessed on the basis of past returns or past records, if available and if no past record is available on the basis of information received by the appropriate authority (vide section 45(2) of the VAT Act). For non-submission of return a dealer becomes liable to pay determined penalty not exceeding twice the assessed amount of net tax u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest or late fee along with an application adducing acceptable genuine reasons for such inability and if the competent authority is satisfied with the reasons adduced such authority may extend the date for making payment of unpaid net tax, interest and late fee. Section 32 as amended by the West Bengal Finance Act, 2008 is reproduced below: 32. Furnishing of return by dealer. (1) Every dealer liable to pay tax under the Act or every other dealer, if so, required by the Commissioner by a notice served in the prescribed manner, shall furnish such returns by such dates and to such authority, as may be prescribed. (2) Every dealer required by sub-section (1) to furnish a return shall be liable to pay such late fee not exceeding rupees two thousand for each month or part thereof of delay in furnishing return, as may be prescribed, and pay, before furnishing such return, the full amount of the net tax, interest and late fee, if any, payable according to such return in the manner as provided in section 31 and shall furnish along with such return, a receipt from the appropriate Government Treasury referred to in that section showing the payment of such amount: Provided that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section (2) of section 32, as referred to in the first proviso to sub-section (2) of section 32; or (c) furnishes such return but fails to make payment of (net tax, interest, and late fee as referred to in sub-section (2) of section 32 thereon) in accordance with the terms and conditions and within such time as may be specified by the Commissioner as referred to in the first proviso to sub-section (2) of section 32; or (d) furnishes such return but fails to make payment of (the unpaid amount of net tax, interest, and late fee as referred to in sub-section (2) of section 32) and where the Commissioner has rejected his application for extension of date of payment as referred to in the first proviso to sub-section (2) of section 32, the Commissioner or any other person appointed under subsection (1) of section 6 to assist him, may, notwithstanding anything contained in section 46, proceed to assess the dealer provisionally for that period: . . . (2) In making a provisional assessment under this section, the Commissioner or other authority as referred to in sub-section (1), shall (a) where the dealer has failed to furnish return, assess the net tax of the dealer f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-submission of return he is required to pay a prescribed fee, described/termed as late fee. The petitioners have assailed the aforesaid levy of late fee as tax on the ground that it cannot be a fee in absence of element of quid pro quo Label of an imposition is not decisive. Real nature of an impost is to be determined upon analysis of the object and features of such impost. Essential characteristics and distinguishing features of a tax and a fee have been explained in numerous judicial decisions. It is also to be remembered that power to levy fee is much wider than the power to levy tax. Power of the State Legislature to levy fee is co-extensive with its legislative power but power to levy tax is derived from specific taxing entries in the State List (List II) or Concurrent List (List III) of the Schedule VII to the Constitution. Entry 66 of List II has empowered the State Legislature to levy fees in respect of all the matters enumerated in the said List. Courts cannot remain satisfied with the label but is required to scrutinize relevant aspects of the levy to appreciate its real nature. The Supreme Court in Sri Krishna Das v. Town Area Committee, Chirgaon [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the common burden, the quantum of imposition upon the taxpayer depends generally upon his capacity to pay. 44.. Coming now to fees, a 'fee' is generally defined to be a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay (Vide Lutz on 'Public Finance' page 215). These are undoubtedly some of the general characteristics, but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases. 45.. As regards the distinction between a tax and a fee, it is argued in the first place on behalf of the respondent that a fee is something voluntary which a person has got to pay if he wants certain services from the Government; but there is no obligation on his part to seek such services and if he does not want the services, he can avoid the obligation. The example given is of a licence fee. If a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s Essays on Taxation, page 408). 46.. If as we hold, a fee is regarded, as assort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should, on the face of the legislative provision, be co-related to the expenses incurred by Government in rendering the services. As indicated in article 110 of the Constitution, ordinarily there are two classes of cases where Government imposes 'fees' upon persons. In the first class of cases, Government simply grants a permission or privilege to a person to do something, which otherwise that person would not be competent to do and extracts fees either heavy or moderate from that person in return for the privilege that is conferred. A most common illustration of this type of cases is furnished by the licence fees for motor vehicles. Here the costs incurred by the Government in maintaining an office or bureau for the granting of licences may be very small and the amount of imposition that is levied is based really not upon the costs incurred by the Government but upon the benefit that the individual receives. In such cases, according to all the writers on public finance, the tax element ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number of previous decisions of the Supreme Court on the concept of fee and has recognized that traditional concept of quid pro quo in a fee has undergone considerable transformation. The Supreme Court has said therein (at page 523 of Comp Cas; 503 of SCC): 38. As noticed in the City Corporation of Calicut [1985] 2 SCC 112; [1985] SCC (Tax) 211 the traditional concept of quid pro quo in a fee has undergone considerable transformation. From a conspectus of the ratio of the above judgments, we find that so far as the regulatory fee is concerned, the service to be rendered is not a condition precedent and the same does not lose the character of a fee provided the fee so charged is not excessive. It is also not necessary that the services to be rendered by the collecting authority should be confined to the contributories alone. As held in Sirsilk Ltd. [1989] Supp 1 SCC 168; [1989] SCC (Tax) 219; AIR 1989 SC 317 if the levy is for the benefit of the entire industry, there is sufficient quid pro quo between the levy recovered and services rendered to the industry as a whole. If we apply the test as laid down by this court in the abovesaid judgments to the facts of the case in hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not excessive. It was not necessary that service to be rendered by the collecting authority should be confined to the contributories alone. The levy does not cease to be a fee merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have a direct relation to the actual service rendered by the authority to each individual who obtains the benefit of the service. Quid pro quo in the strict sense was not always a sine qua non for a fee. All that is necessary is that there should be a reasonable relationship between the levy of fee and the services rendered. It was observed that it was not necessary to establish that those who pay the fee must receive direct or special benefit or advantage of the services rendered for which the fee was being paid. It was held that if one who is liable to pay, receives general benefit from the authority levying the fee, the element of service required for collecting the fee is satisfied. We have carefully considered the object and purpose of levying late fee . Upon analysis of the features of the impugned levy and application of the tests laid down so far by the Supreme Court we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and unambiguous. There is no scope for any kind of confusion or doubt about the liability and the corresponding right or benefit to which such liability is attached. Mr. Bhattacharya has raised the question of double jeopardy. He has submitted that the dealers are required to pay both late fee and penalty for delayed submission of return. Allegation of double jeopardy does not appear to be factually correct. Under the VAT Act a dealer is required to pay/deposit tax and interest if any payable within the prescribed time, to submit quarterly or monthly returns as the case may be, along with documents showing deposit of due tax and interest if any, within the prescribed time. A dealer incurs legal liability to pay interest and penalty for delayed payment of tax and penalty for a non-submission of return. Before April 1, 2007 a dealer had no opportunity of submitting return after due date and thus he was invariably liable to pay penalty for nonsubmission of return. After April 1, 2007 he has been allowed an opportunity of filing return after due date upon payment of prescribed late fee. Once he files return along with appropriate late fee he can no longer be treated as default ..... X X X X Extracts X X X X X X X X Extracts X X X X
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