BHARAT C. MEHTA Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THE petitioner herein challenges the order dated 10th March, 1978 passed by the Appellate Authority, the Deputy Secretary to the Government of Gujarat, Finance Department dismissing the appeal of the petitioner and ordering the forfeiture of Rs. 3500/ - out of the security deposit of Rs. 4200/ - made by the petitioner. The petitioner is the proprietor of a Cinema House at Bhavnagar. Under the Bombay Entertainment Duty and Advertisements Tax Act and the Rules made thereunder, (hereafter called 'Rules') the petitioner is liable to make security deposit in respect of his Entertainment Tax liability. The relevant Rule provides that the tax amounts have to be deposited within 10 days of their being due which may be extended to one month at the request of the Cinema Management. The petitioner did not deposit the amounts within 10 days nor did he make any application for extension of time. However, he deposited the amounts within one month for the relevant period 31st March, 1975 to the 18th January, 1976. Although the amount was tendered beyond the specified time of 10 days and although there was no application for extension of time, the authority concerned accepted the amount without demur. There was no objection raised on the part of the accounts officer of the State of Gujarat for the year 1975 -76. In the course of the audit held between 24th August, 1976 and 31st August 1976 the audit party found that there were 9 instances of delayed payment during the aforesaid period. Hence a notice was served on the petitioner at the instance of the audit party asking the petitioner to show cause why the security deposit of Rs. 4200/ - not be forfeited. The petitioner's contention that the acceptance of the entertainment tax beyond 10 days limit but within one month should be accepted as the permission for extension of time being granted, was rejected. The petitioner went in appeal to the Appellate Authority as per the provision in the Rules. The Appellate Authority held that the petitioner was liable to the forfeiture to the extent of Rs. 3,500/ - out of the aforesaid security deposit of Rs. 4,200/ -. The Appellate Authority rejected the petitioner's contention that the acceptance of the amount should be construed as granting extension of time for payment.

(2.) MR . D. U. Shah, the learned Counsel for the petitioner submits that the authority concerned had accepted the amount of entertainment duty without any objection. As regards the delay in payment, according to him, as the authority has the power to extend time upto one month the acceptance within one month without any objection on the part of the authority should be construed as implied extension of time for payment. This submission of Mr. Shah is quite correct and must be accepted. It was open to the authority concerned to refuse to accept the amount of entertainment duty on the ground that it was not paid within 10 days as prescribed by the Rules and he could have insisted on the petitioner making an application for extension, but the authority for the reasons best known to itself did not insist on the petitioner to make an application for extension of time. As the payment was within one month and that the authority had power to extend time the acceptance of the amount due within one month, should be construed as impliedly granting the extension of time for payment. Mr. Shah has also stressed on the circumstance that objection was not raised by the authority, but it was only at the instance of the audit party that the notice was served on the petitioner. Therefore, according to him, even at that stage, the objection was not raised by the authority concerned but it was at the instance of the audit party. Acceptance of delayed payment without objection implies that the delay in payment is condoned and the payment is accepted as if it is made within time. Hence in the circumstances of the case, it is held that there was an implied extension of time for the payment. In the result, the petition succeeds. A writ of certiorari shall issue quashing and setting aside the impugned order dated 10th March, 1978 passed by the Appellate Authority. Rule made absolute with no order as to costs. The amount of forfeiture to the extent of Rs. 3500/ - will be restored to the petitioner.