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Commissioner of Sales Tax Vs. Sheo Nath Rai Kanhaiya Lal - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberS.T.R. No. 264 of 1971
Judge
Reported in[1973]32STC436(All)
AppellantCommissioner of Sales Tax
RespondentSheo Nath Rai Kanhaiya Lal
Appellant AdvocateStanding Counsel
Respondent AdvocateNone
Excerpt:
.....or 18, or has, without reasonable cause, failed to furnish it within the time allowed and in the manner prescribed. ..(3) if no return is submitted in respect of any quarter or month, as the case may be, within the period or if the return is submitted without the payment of tax in the manner prescribed in rule 48, the sales tax officer shall, after making such enquiries as he considers necessary determine the turnover to the best of his judgment, provisionally assess the tax payable for the quarter or the month, as the case may be and serve upon the dealer a notice in form xi and the dealer shall pay the sum demanded within the time and in the manner specified in the notice 7. rule 41(1) is referable to section 7(1) inasmuch as it prescribes the time and the manner in which the return..........or 18, or has, without reasonable cause, failed to furnish it within the time allowed and in the manner prescribed...he may direct that such dealer shall pay, by way of penalty....4. admittedly, the assessee had furnished the return within time but it is contended that because he had not deposited the admitted tax before or at the time of filing of return, the return was not furnished in the manner prescribed and, as such, he became liable to penalty.5. the material portion of section 7 is as under:7. determination of turnover and assessment of tax.-(1) every dealer who is liable to pay tax under this act shall submit such return or returns of his turnover at such intervals, within such period, in such form and verified in such manner, as may be prescribed....(1-a) before submitting.....
Judgment:

R.L. Gulati, J.

1. This is a reference under Section 11(1) of the U.P. Sales Tax Act.

2. For the assessment year 1967-68, the assessee filed its third quarterly return within time but did not deposit the admitted tax either before or at the time of filing the return. The Sales Tax Officer imposed upon him a penalty under Section 15-A(1)(a) of the U.P. Sales Tax Act (hereinafter referred to as the Act), On appeal, the quantum of penalty was reduced, but it was not cancelled. On revision, the revising authority accepted the assessee's plea that the case was not covered by Section 15-A(1)(a) of the Act and, as such, the penalty was illegal. At the instance of the Commissioner of Sales Tax, the following question of law has been referred to us for opinion:

Whether, on the facts and in the circumstances of the case, when the assessee did not deposit the admitted tax either before filing of the return or along with the return, imposition of penalty under Section 15-A(1)(a) of the U.P. Sales Tax Act was justified?

3. Section 15-A of the Act provides for penalties. Sub-section (1), which is material for our purposes, reads:

15-A. Penalty for failure to file returns.-(1) If the assessing authority is satisfied that any dealer--

(a) has without reasonable cause failed to furnish the return of his turnover which he was required to furnish under Section 7, 7-A or 18, or has, without reasonable cause, failed to furnish it within the time allowed and in the manner prescribed...he may direct that such dealer shall pay, by way of penalty....

4. Admittedly, the assessee had furnished the return within time but it is contended that because he had not deposited the admitted tax before or at the time of filing of return, the return was not furnished in the manner prescribed and, as such, he became liable to penalty.

5. The material portion of Section 7 is as under:

7. Determination of turnover and assessment of tax.-(1) Every dealer who is liable to pay tax under this Act shall submit such return or returns of his turnover at such intervals, within such period, in such form and verified in such manner, as may be prescribed....

(1-A) Before submitting the return under Sub-section (1) or along with such return the dealer shall deposit in such manner as may be prescribed the amount of tax due on the turnover shown in such return.

6. A reading of this provision shows that two distinct obligations have been cast upon an assessee. Under Section 7(1), he has to file a return within the prescribed time and in the prescribed manner and under Sub-section (1-A) of Section 7, he has to deposit in the prescribed manner the amount of tax due on the turnover shown in the return and such deposit has to be made before or at the time of filing the return. Rule 41 prescribes the time, the form and the manner in which the return has to be filed. It also provides how the tax is to be deposited. The relevant portion of Rule 41 is as under:

41. Submission of returns and assessment.-(1) Every dealer who is liable to pay tax under the Act shall, before the last day of July, October, January and April, submit to the Sales Tax Officer a return of his gross turnover for the quarters ending June 30, September 30, December 31 and March 31, respectively in form IV....

(2) Before submitting the return under Sub-rule (1), the dealer shall deposit in the treasury the amount of tax calculated by him on the turnover shown in such return and shall submit the treasury chalan with the return or submit with the return a cheque for the amount so calculated....

(3) If no return is submitted in respect of any quarter or month, as the case may be, within the period or if the return is submitted without the payment of tax in the manner prescribed in Rule 48, the Sales Tax Officer shall, after making such enquiries as he considers necessary determine the turnover to the best of his judgment, provisionally assess the tax payable for the quarter or the month, as the case may be and serve upon the dealer a notice in form XI and the dealer shall pay the sum demanded within the time and in the manner specified in the notice

7. Rule 41(1) is referable to Section 7(1) inasmuch as it prescribes the time and the manner in which the return has to be filed. It says that a return shall be filed within one month from the end of each quarter and such return will be in form IV. Rule 41(2) has reference to Section 7(1-A) and prescribes the time and the manner in which the tax is to be paid. It is very clear that the two requirements-one of filing the return and the other of depositing the admitted tax-are distinct and independent of each other. The deposit of tax is not one of the prescribed manner of filing the return. It is possible for a person to file a quarterly return and not to pay the tax and vice versa. If a return is filed and tax is not paid, the return would not become invalid. So long as the return is filed in form IV and within the prescribed time, it would be a return filed in the prescribed manner. The non-payment of admitted tax would attract Rule 41(3) so that such an assessee would become liable to a provisional assessment. Such an assessee may also be liable to prosecution under Section 14(1)(e) (for acting in contravention of the provisions of the Act or the Rules made thereunder), but he can- not be said to have failed to file a return in the prescribed manner so as to make him liable for the penalty under Section 15-A of the Act.

8. When we return to form IV, we find that the main requirement of that form is to give information with regard to the taxable turnover. Of course, columns Nos. 9 and 10 of that form require an assessee to show the amount of tax realised from the customers and the amount of tax deposited by him in the treasury, but that information obviously is required to enable the Sales Tax Officer to determine the tax actually payable by the assessee after the final assessment order and to enable him to make a provisional assessment under Rule 41(3) in case the assessee has not deposited the admitted tax. If an assessee omits to give this information or the information given by him is wrong it does not affect the validity of the return. A wrong return does not cease to be a return filed in the prescribed manner.

9. We are satisfied that the furnishing of the return is one thing and the deposit of tax is another. The non-deposit of tax does not invalidate the return nor does it render the return to be not in the prescribed manner.

10. We, accordingly, answer the question in the negative in favour of the assessee and against the department. As no one has appeared on behalf of the assessee, there will be no order as to costs.


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