1. The circumstances of this case and the manner in which it has been dealt with are a little out of the ordinary.
2. The question relates to tax payable by the petitioner under the Mysore Motor Vehicles (Taxation on Passengers and Goods) Act. 1961 in respect of the months of January. February and March of 1962 and April and May of 1964. In respect of the first three months, it appears that he had deposited the calculated composition amount with the Sub Treasury at Hosakotc on 9-1-1962. It is also his case that he had made an application to the Tax Officer, viz., The Regional Transport Officer of the locality, on or about the same day The application is not traceable It is also stated that during that period when the Act had not been in force for much length of time, having come into force on 1-10-1961, there was some doubt about the exact procedure to he followed. Therefore, one need not be surprised ifupon investigation it is actually found that beyond depositing the money with the Treasury the petitioner had omitted to make any regular application to the officer. In respect of the month of April 1964 he had made a composition application dated 19-3-1904 and in respect of the month of May 1964, a similar application dated 16-4-1964. It is not clear whether or not orders were at all passed on those applications. But, some time towards the end of 1964, the Tax Officer issued a notice to him in Form No. IV which is the form prescribed for a notice appropriate to S. 6. viz., to cases where the assessee has not filed any returns, or he having filed returns, the officer is not satisfied about their correctness or completeness. The petitioner did not appear before the officer The officer, therefore, proceeded to assess him under Section 6 of the Act. By an order dated 26-11-1964 he imposed on him a tax of Rs 1714.16 as well as penalty of Rs. 85.71 and issued a notice of demand dated 23-2-65 to him demanding both the tax and the penalty The petitioner appealed to the Commissioner of Transport He modified the order and altered tax and penalty to Rs. 225 per month and Rs 25 per month, respectively The total liability thereunder came to be Rs 1125 for tax plus Rs 125 for penalty.
3. So far as the composition applications themselves are concerned, it is not possible on the material placed before us to accept as absolutely accurate the suggestion that in addition' to depositing the money in the Hosakotc Sub Treasury, the petitioner must have filed a regular composition application in respect of the months of January. February and March 1962 Regarding the applications for the two months of April and May 1964, they are clearly barred by time, but they had been filed within such time as would have enabled the Tax Officer to condone the delay Although it may not be right to state as a proposition of law that a separate application for condonation of the delay is absolutely obligatory, it is at least incumbent on the petitioner or persons in his position to set out the reasons, if any, in support of a request for condonation of the delay in the column provided in the prescribed form of composition application for setting out special circumstances, if any The original applications in the file shown to us by the learned Government Pleader show that the said column had been left blank In these circumstances we do not think that we can find fault with the statutory authorities for not condoning the delay
4. The result of this is that the Tax Officer must be held to have acted within his jurisdiction when he proceeded to assess the petitioner under Section 6 of the Act The tax payable by him having been reduced to Rs. 1125, the said amount must now be taken to represent the correct fax liability of the petitioner.
5. We are, however, of the opinion that the imposition of penalty was wholly misconceived Although the assessment in this case is governed by Section 6 and that therefore the penalty under Section 8 may be capable of beingvalidly levied, no such penalty could be levied unless there is default in payment of the whole or any portion of the tax payable pursuant to Section 6 in time. The time limited for payment of tax has to be ascertained from the provisions of Section 9 which says that a notice of demand should issue. Sub-section (2) thereof also says that action by way of issue of distraint warrants cannot be taken only if tax is not paid within 15 days from the date of ser-vice of the notice of demand. Form No. V prescribed fur such a notice of demand also sets out the same period. Hence, the penalty provision of Section 8 can come into operation only if the tax determined under Section 6 having been demanded by the issue of notice, under Section 9 remains unpaid for a period of 16 days from the date of service of notice. Even thereafter the Tax Officer has to apply his mind and pass a separate order because under Section 8 it is discretionary with him whether or not to leave a penalty
6. For these reasons, the direction for payment at penalty contained in the appellate order of the Commissioner, which he made in substitution of the order passed by the original authority has to be and is hereby quashed.
7. Because there have been delays both on the part of the petitioner as well as on the part of the Tax authorities, we think that it is only just that we should extend the time for payment of the balance tax, if any, due by the petitioner after deducting the tax already paid by Mm by 15 days from today.
8. We, therefore make a modified order that the balance tax due by the petitioner should be paid on or before 7th of April 1967. If he does not make payment by then it will be open to the original authority, the Tax Officer, to impose penalty if he thinks fit to do so under Section 8 of the Act.
The parties will bear their own costs
9. Ordered accordingly.