Tax remittance at shorter notified intervals attracts penalty when the dealer fails to deposit collected tax on time.

Section 7(2A) of the Rajasthan Sales Tax Act, 1954 required dealers to remit tax already collected by them at shorter notified intervals, and the amount retained its character as tax rather than advance tax. Failure to deposit that amount within the prescribed period amounted to failure to pay tax within the time allowed, so penalty under section 16(1)(b) applied to the default.

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Issues: Whether the amount payable under section 7(2A) of the Rajasthan Sales Tax Act, 1954 was tax and whether penalty under section 16(1)(b) could be imposed for delay in payment of such amount.

Analysis: Section 7(2A) empowered the State Government to require dealers to deposit the tax collected by them at intervals shorter than the ordinary return period, in advance of the return and along with treasury receipts. The amount so required to be deposited was not an advance tax in the true sense, but tax already recovered by the dealer and required to be remitted within the shorter period specified by notification. Failure to deposit that amount within the prescribed interval amounted to failure to pay tax within the time allowed. Section 16(1)(b), as it stood during the relevant period, therefore applied to such default.

Conclusion: The amount payable under section 7(2A) was tax, and non-payment or delayed payment within the notified shorter intervals attracted penalty under section 16(1)(b), in favour of Revenue.

Ratio Decidendi: Where a statutory provision requires remittance of tax collected by a dealer at shorter notified intervals, the amount remains tax and failure to deposit it within the prescribed time constitutes failure to pay tax within time for the purpose of penalty provisions.

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