JOY VARGHESE Vs. STATE OF KERALA

JUDGEMENT

(1.) THE learned single Judge has referred this case to the Division Bench as it involves an important question of law. THE question of law that arises for consideration in this case is as to whether a dealer under the kerala General Sales Tax Act (hereinafter referred to as the Act) incurs liability to pay penalty under sub-section (3) of section 23 of the Act on his failure to pay the tax amount on the basis of the return filed by him under sub-rule (1) of rule 18 of the Kerala General Sales Tax Rules (hereinafter referred as the Rules ).

(2.) SUB-section (3) of section 23 of the Act which is relevant for our consideration, may be extracted as follows : " If the tax assessed or any other amount due under this Act, or any installment thereof is not paid by any dealer or other person within the time specified therefor in the notice of demand or in the order permitting payment in instalments or within the time allowed for its payment by the appellate or revising authority or within the time specified therefor in this Act or in any rule made thereunder, the dealer or other person shall pay, by way of penal interest, in the manner prescribed, in addition to the amount due, a sum equal to - (a) one per cent of such amount for each month or part thereof for the first three months after the date specified for its payment; (b) two per cent of such amount for each month or part thereof subsequent to the first three months aforesaid. " It is clear from this statutory provision that it provides for levy of penal interest in circumstances specified therein. Penal interest at the rate specified in sub-section (3) of section 23 of the Act becomes payable if the conditions specified therein are satisfied, in addition to the liability specified therein. The liability to pay penal interest gets attracted if the following amounts are not paid within the date specified for its payment : (i) tax assessed; (ii) any other amount due under the Act; or (iii) any instalments thereof. The penal interest is attracted if the amount is required to be paid within the time specified in the notice of demand and the same is not paid. Liability to pay penal interest also gets attracted if payment by instalments is ordered or time for payment is granted either by the appellate, or the revisional authority and the same is not paid within the time allowed or within the time specified therefor in the Act or the Rules made thereunder.

(3.) THE learned Government Pleader invited our attention to the decision of the Supreme Court reported in Associated Cement Co. Ltd. v. Commercial Tax Officer, Kota [1981] 48 STC 466 (SC ). That was a case in which the Supreme Court was required to examine the scope and effect of sections 7, 7aa, 10 (3), 11b and 26 (5) of the Rajasthan Sales Tax Act, 1954, and rule 25 of the Rajasthan Sales Tax Rules, 1955. THE scheme of the said Act and the Rules thereunder are not in pari materia with the provisions which fall for consideration in this case. THEre is no statutory provision corresponding to sub-rule (3) of rule 18 of the Rules and form No. 14 in the Rajasthan Sales Tax Act and the Rules, considered by the Supreme Court. Hence no assistance can be derived by the learned counsel for the State from the said decision. Similar is the position in respect of two other decisions relied on by the learned Government Pleader, reported in Royal Boot House v. State of Jammu & Kashmir [1984] 56 STC 212 (SC) and Khazan Chand v. State of Jammu & Kashmir [1984] 56 STC 214 (SC ). THE provisions of the Jammu and Kashmir General Sales Tax Act considered in the said two decisions also do not contain any provisions similar to rule 18 (3) and form No. 14 with which we are concerned in this case and hence no assistance could be derived by the learned Government Pleader from those decisions.