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TMI Blog2018 (4) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... only distribution work is undertaken in respect of L. P. G. The only source of purchase of L. P. G. within the State of M. P. is from the Gas Authority of India Limited (for short, "GAIL"), another Central Government owned arid Controlled company and also a registered dealer. 4. The case of the petitioner is that it had purchased L. P. G. after payment of full tax under the MPVAT Act as applicable to the State of M. P. during the period from April 1, 2011 to March 31, 2012. The tax has been paid as per the books of accounts in time. 5. The assessing officer respondent No. 4 while passing the assessment order denied the set-off of input rebate on amount of VAT paid to the GAIL on the ground that the GAIL had issued credit notes in favour of the petitioner due to price revision as per the direction of Petroleum Planning and Analysis Cell (PACC) of the Government of India after the invoices were issued. The price revision has only been made in respect of base price and no credit note has been issued for the VAT paid by the petitioner and deposited by the GAIL in the assessment of the GAIL and an order of for-feature of amount (tax charged and deposited on the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the tax as per accounts. (at such rate as may be prescribed which shall not exceed 1.5 per cent, per month) from the date the tax so payable had become due to the date of its payment or to the date of order of assessment, whichever is earlier. Explanation: For the purpose of this clause,- (1) Where the period of default covers a period less than a month the interest payable in respect of such period shall be computed proportionately. (2) 'month' shall mean thirty days. (b) If a registered dealer having furnished a return under sub-section (1) or a revised return under sub-section (2) for any period and paid the tax payable according to such return or revised return after the time prescribed therefore fails to pay interest along with such return or revised return in accordance with the provisions of clause (a), the Commissioner shall levy the interest liable to be paid by the dealer and after giving the dealer a reasonable opportunity of being heard, may direct him to pay in addition to the tax payable or paid and the interest payable by him, by way of penalty, a sum equal to such rate as may be prescribed which shall not exceed 1.5 per cent, per month of the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which case the tax shall be deposited at the intervals specified in the notification in advance of the return and the return shall be accompanied by the receipt for the full amount of tax due 'shown in the return'. Although the phraseology used in sub-sections (2) and (2A) of section 7 is not the same, the content and purport of the two sub-sections is more or less identical, namely, both the sub-sections require that the return shall be accompanied by a receipt evidencing the deposit of the 'full amount of tax due' on the basis of the return or on the basis of the information shown in the return. The full amount of tax due and payable prior to the submission of the return is clearly relatable to the information furnished in the return. Undoubtedly, the information to be furnished in the return must be 'correct and complete', that is, true and complete to the best of knowledge and belief; without the dealer being guilty of wilful omission. This is the essence of the verification clause found at the foot of form ST 5. Rule 25 expects the verification of the return to be in the manner indicated in Form ST 5. Therefore, on a conjoint reading of section 7(1), (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2A) of section 7 and (ii) failure to pay the tax within the time allowed by the notice of demand or 30 days from the receipt of the notice by the dealer. Section 11B before its amendment nowhere provided for payment of interest on the unpaid tax amount as found on final assessment from the date of the filing of the return under section 7 of the Act. If the amount of tax payable under sub-section (2) is paid on the basis of return, not on the basis of final assessment, there can be no question of payment of interest under clause (a) of section 11B. Similarly, if the tax is paid according to the return as required by sub-section (2A), in other words, if the full amount of tax due 'shown' in the return is paid, there can be no question of charging interest under clause (a) of section 11B. So far as clause (b) is concerned it is a post-assessment situation. Where tax is found due on final assessment and the dealer is required to make good the difference, a notice of demand will issue. If the dealer fails to pay the tax within the time specified in the notice, and if no time is specified within 30 days from the receipt of notice, he is required to pay interest at the rates pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emerges on a plain reading of the provisions of the Act as they stood before Act 4 of 1979 came into force. After the substitution of section 11B by Act 4 of 1979 the situation has changed altogether. What we have said earlier has nothing to do with section 11B as introduced by Act 4 of 1979. We may now examine the case law on which reliance was placed. 11. Before we proceed further we must emphasise that penalty provisions in a statute have to be strictly construed and that is why we have pointed out earlier that the considerations which may weigh with the authority as well as the court in construing penal provisions would be different from those which would weigh in construing a provision providing for payment of interest on unpaid amount of tax which ought to have been paid. Section 3, read with section 5 of the Act, is the charging provision whereas the rest of the provisions provide the machinery for the levy and collection of the tax. In order to ensure prompt collection of the tax due certain penal provisions are made to deal with erring dealers and defaulters and these provisions being penal in nature would have to be construed strictly. But the machinery provisions need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision for charging interest was, it seems, introduced in order to compensate for the loss occasioned to the Revenue due to delay. But then interest was charged on the strength of a statutory provision, may be its objective was to compensate the Revenue for delay in payment of tax. But regardless of the reason which impelled the Legislature to provide for charging interest, the court must give that meaning to it as is conveyed by the language used and the purpose to be achieved. Therefore, any provision made in a statute for charging or levying interest on delayed payment of tax must be construed as a substantive law and not adjectival law. So construed and applying the normal rule of interpretation of statutes, we find, as pointed out by us earlier and by Bhagwati, J. in the Associated Cement Co. Ltd. v. Commercial Tax Officer [1981] 48 STC 466 (SC); [1981] 4 SCC 578; [1982] SCC (Tax) 3, that if the Revenue's contention is accepted it leads to conflicts and creates certain anomalies which could never have been intended by the Legislature." 13. In view of the foregoing discussions, it is dear that the law does not envisage assessee to predict final assessment and expect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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