STATE OF HARYANA Vs. ROHTAS INDUSTRIES

JUDGEMENT

(1.) THIS is a reference under Section 42 of the Haryana General Sales Tax Act, 1973 (for short "the Act") made at the instance of the Excise and Taxation Commissioner, Haryana. First the factual matrix : The respondent-dealer was required to file return for the quarter ending 30th June, 1976, on or before 30th July, 1976. He made an application for extension of time for filing the return. The extension was granted and the dealer was permitted to file return on or before 6th August, 1976. Complying with this order the dealer filed his return and paid the tax on 5th August, 1976. However, the Assessing Authority was of the view, inspired by the decision of the Final Court in Haji Lal Mohd. Biri Works v. State of U. P. [1973] 32 STC 496, that under Section 25 (5) of the Act the assessee became liable to pay interest on the amount of tax which became due and was not paid with effect from the date prescribed for filing the return. Liability to pay interest on the unpaid tax is created by the statute and the Assessing Authority has no discretion to grant any exemption from payment of any interest. The liability to pay interest is automatic and arises by operation of law. He held that the dealer was liable to pay Rs. 9,393 as interest under Section 25 (5) of the Act. Aggrieved, the dealer filed an appeal. The first appellate court affirmed the findings and conclusions of the Assessing Authority and held that despite the extension granted for filing the return, the dealer must pay interest. Still dissatisfied, the dealer went up in second appeal before the Sales Tax Tribunal, Haryana. The Sales Tax Tribunal, Haryana, held that on a conjoint reading of Section 25, Rules 2 (q), 17 and 62 of the Haryana General Sales Tax Rules, 1975 (hereinafter referred to as "the Rules"), the competent authority can extend the time for filing returns. The prescribed date for submission of the return, in such a case, shifts to the date fixed by the competent authority for filing the return and as such the provisions of Sub-section (5) of Section 25 of the Act do not come into play. The dealer was not liable to pay interest. He allowed the appeal and quashed the orders charging interest on the amount of the tax which has not been paid by 30th July, 1976.

(2.) THE Excise and Taxation Commissioner, Haryana, made an application under Section 42 of the Act and the Sales Tax Tribunal, Haryana, has referred the following question for our opinion :

(3.) IT is clear from a perusal of the above quoted statutory provisions that a dealer is liable to pay tax in the manner provided at such intervals as may be prescribed. Every registered dealer is obliged to furnish returns by such dates and before such authority as may be prescribed. Before filing the return the registered dealer shall pay into the Government Treasury or the State Bank of India the full amount of tax due from him under the Act according to such returns and append the receipt regarding such payment with the returns. If a dealer fails to pay the tax, he shall be liable to pay in addition to the tax due simple interest on the amount due at one per centum per month from the date commencing with the date following the last date for submission of the return under Sub-section (2) of Section 25 of the Act for a period of one month and thereafter at the rate of one and a half per centum per month. It is thus clear that the liability to pay interest on the non-payment or delayed payment of tax commences with the date following the last date for submission of the return under Sub-section (2) of Section 25 of the Act. Rule 62 clothes the appropriate authority with powers to extend the period prescribed for doing certain acts. The appropriate authority can, therefore, for special reasons to be recorded, extend the time prescribed for filing the returns or payment of tax.