No Penalty under Section 36(3) for Timely Tax Payment

The High Court held that no penalty could be imposed under section 36(3) of the Bombay Sales Tax Act, 1959 as the tax due was paid before the submission of the revised return. The court emphasized that penalty could only be calculated from the date of submission of the revised return to the date of payment, not from the date of the original return. The Tribunal's decision in favor of the assessee was upheld, and the reference was disposed of with no costs.

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Issues:
Interpretation of penalty under section 36(3) of the Bombay Sales Tax Act, 1959 for late payment of extra tax dues according to revised return.

Detailed Analysis:

1. Background and Facts:
The case involved an assessee, a Government of India undertaking, who sold goods to another government undertaking. Initially, the sales were claimed as exempt, but due to a refusal to provide necessary documentation, the assessee filed revised returns and paid the additional tax. The Sales Tax Officer imposed a penalty under section 36(3) of the Act on the extra amount paid by the assessee as per the revised return.

2. Contentions and Appeals:
The assessee contended that since the extra amount was paid within the prescribed time, no penalty should be imposed. The Assistant Commissioner and the Tribunal upheld this contention, leading to the reference before the High Court at the instance of the Revenue.

3. Legal Provisions and Interpretation:
The court analyzed section 36(3) of the Act, which allows for the imposition of a penalty for failure to pay tax within the required time. It noted that penalty can only be imposed if the tax is not paid within the specified time under the Act. Section 38(3) specifies that the extra tax due as per a revised return must be paid before submission of the revised return.

4. Court's Decision and Reasoning:
The court held that since the tax due as per the revised return was paid before submission, penalty under section 36(3) cannot be imposed. It emphasized that penalty can only be calculated from the date of submission of the revised return to the date of payment, not from the date of the original return. The court also highlighted that a revised return must be submitted within the specified time limit to be valid.

5. Conclusion:
The High Court concluded that in this case, as the tax due was paid before the submission of the revised return and the penalty cannot be levied under section 36(3) of the Act. The Tribunal's decision was upheld, and the question was answered in favor of the assessee.

6. Disposition:
The reference was disposed of with no costs, and the court affirmed the Tribunal's decision regarding the penalty under section 36(3) of the Bombay Sales Tax Act, 1959.

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