TaxTMI 
TaxTMI 
2024 (3) TMI 487
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.... for the period with effect from 01.08.1996 to 01.01.2005 and assessed the petitioner by way of best judgment and levied differential tax in total of Rs. 11,63,976/- recording that every person working in the petitioner factory and drawing salary and wages in terms of First Schedule of the Act, have to pay profession tax under Section 4 of the Act, and it was also the statutory duty of the petitioner under Section 5 of the Act to deduct the profession tax from the salaries and wages of the employees and remit the same to the State. As the same was not done, the order dated 28.07.2005 was passed. 4. Additionally, i.e, apart from levying tax, interest of Rs. 4,14,062/- was also levied upon the petitioner for delayed payment of tax along with the monthly return. 5. The petitioner filed revision under Section 16 of the Act before the 1st respondent the Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad. The revision was allowed by the Order dated 28.01.2006. The matter was remanded to the Assessing Authority to re-do the assessment and levy interest, if any, in accordance with law. The Commissioner of Commercial Taxes in its order held that the Assessing Authority should....
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.... time, i.e., every month for the previous month, there is no illegality in holding that there was liability to pay the interest for which the matter has been remanded to the assessing authority. There is no illegality in the impugned order. 10. In view of the submissions advanced, the following points arise for our consideration: i) Whether any time limit has been prescribed for filing return and payment of profession tax under the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987? ii) Whether the revisional authority - the 1st respondent is right in holding that there would be liability for payment of interest as the petitioner did not pay the profession tax within prescribed time? 11. We have considered the submissions advanced by the learned counsels for the parties and perused the material on record. 12. Both the points being interlinked are being considered together. 13. The Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987 was enacted for levy and collection of a tax on professions, trades, callings and employments. 14. Section 4 of the Andhra Pradesh Tax on Professions, Trades, Callings ....
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....the tax from the salary or wage payable to such person and such employer or employers, as the case may be, shall not be liable to pay tax on behalf of such person." 17. Section 5 of the Act thus provides for the liability of the employer to deduct and pay tax on behalf of the employees. According to this section, the tax payable under the Act 1987 by any person earning salary or wage, shall be deducted by his employer from the salary or wage payable to such person before such salary or wage is paid to him, and such employer shall, irrespective of whether such deduction has been made or not, when the salary or wage is paid to such person, be liable to pay tax on behalf of all such persons. 18. Section 7 of the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987 reads as under: "Section 7: Returns- (1) Every assessee registered under this Act, shall submit to the assessing authority a return in such form, for such period or periods and by such dates as may be prescribed showing therein the salaries and wages paid by him and the amount of tax deducted by him in respect thereof. (2) Every such return shall be accompanied by a treasury c....
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....he time of payment of salary or wages or after deducting, failes to pay the tax as required by or under the Act, he shall, (a) be deemed to be an assessee in default in respect of the tax; and (b) be liable to pay such interest as may be prescribed on the amount of tax due for each month or part thereof for the period for which the tax remains unpaid. Sub-Section (2) of Section 11 further provides that if an enrolled person fails to pay the tax as required by or under this Act, he shall be liable to pay interest at the rate and in the manner laid down in sub-section (1). 22. 'Assessee' has been defined under Section 2(b) of the Act 1987, which means unless the context otherwise requires, "a person or employer by whom tax is payable under the Act" i.e., the Act 1987. 23. As per Section 12 of the Act, the penalty shall be in addition to the interest payable under sub-section (1) or sub-section (2) of Section 11. 24. Section 2 definition clause, defines under clause (k) 'prescribed', which means unless the context otherwise requires, prescribed by rules made by the Government under the Act. 25. The Andhra Pradesh Tax on Professions, Trades, Callings and E....
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....t and penalty, if any, by deposit of the requisite amount in the Treasury by Challan and a copy thereof has to be filed with monthly returns prescribed by Rule 12. 32. Further, Rule 24 of the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Rules, 1987 provides for interest on tax and reads as under: "Rule 24: Interest on tax, if failure to deduct or fails to pay the tax: If the assessee does not deduct the tax at the time of payment of salary or wages after deducting, fails to pay tax or if an enrolled person falls to pay the tax as required by or under the Act, he shall pay in addition to the amount of such tax, interest at the rate of two rupees for every one hundred rupees or part thereof for every month or part thereof from the delay/date specified for its payment." 33. Rule 24 therefore provides for interest on tax, on failure to deduct or to pay the tax. As per this rule, if the assessee does not deduct the tax at the time of payment of salary or wages or after deducting, fails to pay tax or if an enrolled person fails to pay the tax as required by or under the Act, he shall pay in addition to the amount of such tax, interest. 34. The ret....
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.... or/and such 'specified period' has not been specified in Section 7 or in Form-V in which the return is to be filed. 36. Section 4 of the Act imposes liability for levy and collection of tax on every person engaged in any profession, trade, calling or employment falling under the First Schedule. Section 5 of the Act provides for the employer's liability to deduct and pay tax on behalf of employees. It clearly provides that such deduction is to be made by the employer from the salary or wages payable to such persons before such salary or wages paid to him. Even if the deduction has not been made when the salary or wage is paid to such persons, the employer shall be liable to pay tax on behalf of such persons. The payment of salary or wages is made on monthly basis. It could not be argued by the learned counsel for the petitioner that it is not so paid on monthly basis. Consequently, the deduction of the profession tax is to be made on monthly basis at the time of making payment of salary or wages. Further, in view of the legal provisions referred to above, even if such deduction is not made at that time, the assessee is liable to make payment of profession tax as per Section 5 of....
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....e to the Act. Such statement shall show the name of the employee, the details of salary drawn, the amount of tax deducted therefrom and the period to which the tax relates. (ii) Notwithstanding the provisions contained in Rule 13 and sub-rule (1) of this rule the liability of an employee to pay the tax shall not cease until the due amount of tax in respect of him has been fully paid to the Government account, and without prejudice to the aforesaid provisions, the said amount may be recovered from him if the employer or the assessing authority is satisfied that the amount has not been deducted from his salary or wages." 39. The expression 'month' has been defined under Rule 2 (i) (c) of the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Rules, 1987 which reads as under: "Rule 2 (i) (c) "Month" means a calendar month." 40. So, month means a calendar month. 41. Section 3 (35) of the General Clauses Act 1897 also defines a 'month' as under: "(35) "month" shall mean a month reckoned according to the British calendar" 42. In State of Himachal Pradesh v. Himachal Techno Engineers (2010) 12 SCC 210 one of the questions which arose....
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....to describe the periods as "three months" and "one month" respectively or by describing the periods as "ninety days" and "thirty days" respectively. It did not do so. Therefore, the legislature did not intend that the period of three months used in sub-section (3) to be equated to 90 days, nor intended that the period of thirty days to be taken as one month. 16. Section 3(35) of the General Clauses Act, 1897 defines a "month" as meaning a month reckoned according to the British calendar. 17. In Dodds v. Walker [(1981) 1 WLR 1027 : (1981) 2 All ER 609 (HL)] the House of Lords held that in calculating the period of a month or a specified number of months that had elapsed after the occurrence of a specified event, such as the giving of a notice, the general rule is that the period ends on the corresponding date in the appropriate subsequent month irrespective of whether some months are longer than others. To the same effect is the decision of this Court in Bibi Salma Khatoon v. State of Bihar [(2001) 7 SCC 197]. 18. Therefore when the period prescribed is three months (as contrasted from 90 days) from a specified date, the said period would expire in the thi....