Penalty for non-payment of assessed tax upheld where notice fixed the payment date under the Bombay Sales Tax Act.

Under the Bombay Sales Tax Act, 1953, penalty could be imposed for failure to pay assessed tax after service of notice under section 16 where the amount was not paid by the date specified in the notice. Section 16(4) was read with section 16(5), and "prescribed time" was not confined mechanically to the definition clause because the statutory context showed that section 16(5) itself fixed the payment time by requiring the notice date to be at least thirty days after service. Rule 21 and Form XVII supported that construction. The Court applied contextual interpretation of taxing provisions and held that the penal provision could operate, rejecting the argument that no prescribed time existed.

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Issues: Whether penalty could be levied for non-payment of assessed sales tax after service of notice under section 16 of the Bombay Sales Tax Act, 1953, on the ground that the tax was not paid within the prescribed time.

Analysis: Section 16(4) was read together with section 16(5). The expression "prescribed time" was not confined mechanically to the definition clause, because a definition cannot control context where the statutory setting shows otherwise. The Court held that section 16(5) itself prescribes the time for payment by requiring the date in the notice to be not less than thirty days from service of the notice, and that rule 21 read with Form XVII also supports that construction. The interpretative approach applied was that taxing provisions must be construed in context, and a penal provision may be construed in favour of the assessee only where the language permits.

Conclusion: Penalty was legally leviable for failure to pay the assessed tax by the specified date, and the contention that no prescribed time existed was rejected.

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