Return-linked tax liability: pre-assessment penalty and interest cannot be imposed when no return has been filed.

Penalty under section 10(6) of the Punjab General Sales Tax Act and interest under section 11-D(1) were held inapplicable where no return had been filed and no tax had been paid according to such returns. The statutory scheme links payment under section 10(4) to returns filed under section 10(3), so "tax due" in that context means the amount disclosed by the return. In the absence of a return, the Act contemplates assessment under section 11(5), with separate penalty and post-assessment interest provisions. The levy therefore failed because the statutory trigger for pre-assessment penalty and interest was not satisfied.

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Issues: Whether penalty under section 10(6) and interest under section 11-D(1) of the Punjab General Sales Tax Act, 1948 could be levied where the dealer had not filed returns and had not paid tax according to such returns.

Analysis: The scheme of section 10 makes payment under sub-section (4) dependent on the filing of returns under sub-section (3), and the expression "tax due" in that context is referable to the amount disclosed by the return. Penalty under section 10(6) is attracted only when there is failure to pay the amount due in accordance with the returns, while interest under section 11-D(1) is similarly linked to non-payment of tax as required by section 10(4). Where no return is filed, no tax can be said to be due under that provision. The Court also noted that where returns are not furnished, the Act provides a separate mechanism of assessment under section 11(5) and consequential penalty under section 11(8), and that interest after assessment is separately covered by section 11-D(2). The provision was applied in light of the Supreme Court's later view that liability to interest arises only where the return is filed and tax according to that return is not paid.

Conclusion: Penalty under section 10(6) and interest under section 11-D(1) could not be levied in the absence of filed returns and payment according to such returns; the answer was in favour of the assessee.

Final Conclusion: The references were answered against the revenue, and the levy of penalty and pre-assessment interest failed on the facts referred.

Ratio Decidendi: Liability to penalty or pre-assessment interest under provisions linked to payment of tax according to returns arises only when a return is filed and tax shown therein is not paid; without a return, the statutory trigger for such levy does not arise.

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