1987 (1) TMI 18

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....a registered firm deriving income from trading in cotton. It has its head office at Dhamangaon, Maharashtra and branches in Maharashtra as well as outside. The assessee is obliged to file under the Sales Tax Act every quarter a return and to pay tax accordingly. For the year under consideration, the assessee did not make payment of sales tax in the 3rd and 4th quarters as a result of which penalty was imposed under section 36(3) of the Sales Tax Act. It is apparent that section 36(3) of the Sales Tax Act means the Bombay Sales Tax Act, 1959. On noticing the debit entry of Rs. 18,775 under the head " Penal interest", the Income-tax Officer refused to grant the deduction of the said payment as, according to him, the penalty was not deducti....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on for an offence under this Act shall be instituted in respect of the same facts on which a penalty has been imposed under this section." An examination of the scheme of the Sales Tax Act leaves no manner of doubt that section 36 in terms deals with penalty. The marginal note which provides a clue reads thus: " Imposition of penalty in certain cases and bar to prosecution." Shri Thakar, learned counsel for the assessee, contended that the use of the word " penalty " either in the marginal note or in the substantive provision is not conclusive of the matter and that the provisions of section 38(2) of the Act merely permit charging of interest for not paying the tax in time and, therefore, is the tax itself and is, therefore, an all....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....faults in making payment of cess. It is a thing apart from an arrear of cess and the interest due thereon." A comparison of the provisions of section 3(3) of the Uttar Pradesh Sugarcane Cess Act and section 36(3) of the Sales Tax Act leaves no manner of doubt that these two provisions are in pari materia though the language used is slightly different. In our judgment, far from supporting the case of the assessee, the very ratio of this decision goes against him. . Our attention was also invited to section 38(2) of the Sales Tax Act which provides for payment of tax and deferred payment of tax, etc. According to section 38(2), every registered dealer furnishing returns as required by sub-section (1) of section 32, shall first pay into ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... 58) : " If the tax assessed under this Act or any instalment thereof is not paid by any dealer or person within the time specified therefor in the notice of assessment or in the order permitting payment in instalments, the dealer or person shall pay by way of penalty, in addition to the amount due, a sum equal to a sum calculated at the rate of one rupee for every hundred rupees or part thereof of such amount for each month or part thereof after the date specified for its payment." The Madras High Court considered the whole scheme of the Act in general and section 45(2) in particular. Section 45(2) is a provision for imposition of penalty and while examining the scheme, it has been held that the said provision and not the provisions....