STATE OF ORISSA Vs. KALINGA AUTOMOBILES LTD

JUDGEMENT

(1.) ON the application of the revenue, the Sales Tax Tribunal has stated these cases and has referred the following questions for determination of this court under Section 24(1) of the Orissa Sales Tax Act, 1947 (hereafter referred to as 'the Act'):

(2.) THE assessee is a registered dealer under the Act. For the quarters ending 31st December, 1965, 31st March, 1966, and 30th June, 1966, with which we are concerned, the assessee defaulted to comply with the requirement of making a return as required under Section 11(1) read with Rule 20 as per the details indicated below: Quarter ending Period of delay Amount of admitted tax1. 31 -12 -1965 28 days Rs. 23,6422. 31 -3 -1966 90 days Rs. 56,2083. 30 -6 -1966 60 days Rs. 33,199 The Sales Tax Officer imposed penalties under Section 11(3) of the Act of Rs. 660, Rs. 5,058 and Rs. 1,980 for the defaults. The first appellate authority dismissed the appeals, but in second appeals by the assessee, the Tribunal held: . . . As regards the excessiveness of the penalty a legal plea was advanced that there is difference between 'tax due' and 'tax payable'. In other words, it was contended that two kinds of penalties are contemplated under Section 11(3) of the Act, one at the rate of Rs. 5 for every day of delay and the other one -tenth per centum of the tax due whichever is higher and, in this case, no tax being due, the first part of the penalty provision applied to this case and the maximum penalty that could be imposed thereunder is Rs. 5 per day of delay. There are judicial pronouncements differentiating 'tax due' from 'tax payable'. It is said in that context that a tax due is always quantified or determined and thereafter demand notice to pay is issued and then only it becomes a debt and, therefore, a 'tax due'. But a 'tax payable' does not possess the above virtues. I think there is much substance in this contention. Their Lordships of the Allahabad High Court in the case of M.A. and Co. v. Assistant Commissioner (Judicial), Sales Tax, Farrukhabad [1964] 15 S.T.C. 487, have observed:

(3.) IN the face of such clear statutory provisions, we see no justification to get into a consideration of 'tax due' and 'tax payable'. There may be - - nay, there is - - distinction between these two, but so far as Section 11 and the relatable rules are concerned, there is no scope to proceed on the basis of such distinction. In the concept of 'admitted tax' a process of self -assessment is involved. The dealer is required by law to calculate his tax liability and is given a time to pay the same along with the return. It is quite possible that by the ultimate assessment the tax due may vary - - be more or even less - - but at the stage of making of the return, obligation has been cast on the dealer to pay the admitted tax. Under the scheme of the Orissa Act, admitted tax is due at the time the return is due, i.e., within a calendar month of the end of the quarter or year, as the case may be, and a grace period of a fortnight thereafter is allowed failing which penalty becomes exigible. Construing similar provisions in Sections 14(2) and 14(3a) of the Bihar Sales Tax Act, the Patna High Court in Commissioner of Sales Tax v. Ganga Prasad Jai Prakash [1961] 12 S.T.C. 716 has said: It is, therefore, manifest in the present case that the assessee is liable to be saddled with penalty under Section 14(3a) of the Bihar Sales Tax Act because he has failed to make the payment of the admitted tax due from him at the time of the submission of the return.