WARTHYHULLY ESTATES LIMITED Vs. AGRL ITO

JUDGEMENT

(1.) THE petitioner is having a coffee estate and is an assessee under the Karnataka Agricultural Income-tax Act, 1957.

(2.) THE dispute is with regard to the assessment year 1982-83, i.e., the previous year ending on March 31, 1982. In accordance with the provisions of Section 18 of the Karnataka Agricultural Income-tax Act ("the Act" for short), the return was due on May 31, 1982. THEre is a provision for seeking extension of time under Section 61 of the Act. THE petitioner applied for extension in submitting the return on March 25, 1982, which was granted to him by the assessing authority vide endorsement dated June 5, 1982, till September 30, 1982. THE petitioner was charged interest for the delayed submission of the return in accordance with the extension granted and instalments granted and paid in October, 1982, December 1982, and February 1983. In the meantime, the Act was amended by Act No. 14 of 1983 and the said amendment was made applicable to assessment of agricultural income derived during any previous year ending on or after March 31, 1982. Section 18 of the principal Act was amended and for the words "first June every year", the words "expiry of four months from the end of the previous year" were substituted.

(3.) I have considered the matter. The provisions of Act No. 14 of 1983 are retrospective in nature. The petitioner was a law abiding citizen and could not have foreseen the amendment at the time when the application for extension of time for submission of return was made by him. If the interpretation of learned counsel for the respondent is taken to be correct, it would mean that the benefit could be given only to the defaulters and not to the law abiding citizens. The provisions of the Amending Act No. 14 of 1983 cannot be considered in a manner so as to dicriminate between the assessees who have submitted their returns late either on their own or on the basis of any permission given by the assessing authority. The order of the assessing authority extending the time has become superfluous by virtue of the retrospective amendment. It is cardinal principle of taxation law that no tax can be levied or collected without the authority of law and the same principles have been embodied under Article 265 of the Constitution of India. The nature of interest is not that of tax but is incidental to tax in the nature of additional tax which the assessee has to pay additionally because of the delayed payment of tax. At the most, it could be said that the interest is compensatory in nature for delayed payment of tax and, therefore, acquires the same character to some extent so far as the liability to pay interest is concerned.