Badrilal Vitthaldas vs Commissioner of Commercial Tax

Heard. This petition has been filed by the petitioner against the order dt.22.7.2008 (Annexure P/1).

The question for consideration before the court is that whether the petitioner was liable to pay interest on delayed payment of tax.

The petitioner was subjected to payment of tax on ''Dalda'' as entry tax. The tax was imposed vide notification dt. 1.10.1997. The petitioner was required to pay a tax of Rs. 1,11,956/- in regard to liability of payment of entry tax for the period between 15.10.1999 and 16.8.2001. He deposited amount of Rs. 50,000/-on 15.10.1999 and remaining amount on 16.8.2001. The authority held that the petitioner was liable to pay interest on the amount, which was deposited by him belatedly because he did not deposit the amount within time. The authority imposed an interest of Rs. 53,816/- and penalty of Rs. 25,505/-. The revisional authority set aside the penalty, however, maintained the interest imposed against the petitioner.

Counsel for the petitioner has submitted that the petitioner was not liable to pay interest in view of Section 26 of the M.P. Commercial Tax Act, 1994 (hereinafter referred to ''Act of 1994'') because the act of the petitioner was within the purview of Section 26(4) of the Act of 1994. In support of his contention, learned counsel relied on the order passed by the Commercial Tax Appellate Tribunal in Aristo Pharmaceuticals Ltd. v. Commissioner of Commercial Tax (Appeal No. A-1325/CTT/03 (Entry Tax), dated 14-11-2006).

Sub-section 4(a) of Section 26 of the Act of 1994 prescribes payment of interest by a dealer under certain circumstances. The Section is as under:--

(4)(a) It a dealer required to file return under sub-section (1)--

(i) fails without sufficient cause to pay the amount of tax payable according to a return for any period in the manner prescribed under sub-section (2) of Section 32; or

(ii) files a revised return under sub-section (3) showing a higher amount of tax to be due than was shown by him in the original return; or

(iii) fails to furnish return, such dealer shall be liable to pay interest in respect of--

(a) the tax payable by him according to the return referred to in sub-clause (i); or

(b) the difference of the amount of tax payable according to the revised return; or

(c) the tax payable for the period for which he has failed to furnish return, at such rate as may be notified which shall not be less than 0.5 per cent but shall not exceed 1.5 per cent per month from the date the tax so payable had become due to the date of its payment or to the date of order of assessment, whichever is earlier.

In accordance with the aforesaid Section, a dealer is liable to pay interest in respect of the tax if his act comes within the purview prescribed under sub-section (4)(a)(1)(i)(ii)&(iii). Clauses (i) and (ii) of sub-section (4)(a)(1) of Section 26 of the Act of 1994 clearly stipulates that if a dealer fails without sufficient cause to pay the amount of tax payable according to the return or files a revised return under sub-section (3) showing a higher amount of tax, such dealer shall be liable to pay interest. In the present case, the petitioner was liable to pay entry tax in accordance with the notification dt.1.10.1997. He himself admitted the aforesaid liability. He paid part of the amount of Rs. 50,000/- on 15.10.1999 and remaining amount on 16.8.2001. The aforesaid amount could not be paid without filing the revised return, hence, action of the petitioner would amount to filing of revised return. Consequently, in accordance with Section 26(4)(a)(1)(ii) of the Act of 1994, the petitioner was liable to pay interest. In such circumstances, in our opinion, the order passed by the authority is in accordance with law. Consequently, we do not find any merit in this petition. It is hereby dismissed. No order as to costs.