1. The period of assessment in this case is from 1st April, 1949, to 31st October, 1952. The applicants sell milk, curds, sweets etc. The Sales Tax Officer assessed the tax to Rs. 13,433-12-0 and levied a penalty of Rs. 1,301-3-6 under Sub-section (3A) of Section 12 of the Bombay Sales Tax Act, 1946. The applicants appealed on the question of the penalty levied under Sub-section (3A) of Section 12, and they did not dispute the assessment. The Assistant Collector dismissed the appeal observing, "It must be observed that the penalty under Section 12 (3A) is leviable on the tax payable under the Act which need not necessarily be the tax payable according to the dealer's returns. This has happened in the case of the present appellant". There was a revision application against the order of the Assistant Collector. The applicants contended that they could be asked to pay the difference in the amount of tax payable and paid and that they could not be asked to pay any penalty thereon particularly as there was no deliberate withholding of the tax payable by them. As the applicants did not dispute the assessment, the Additional Collector of Sales Tax who heard the revision application regarded such admission as an indirect admission that the returns which had been filed by them had no basis and that they had been only arbitrarily filed; and he observed, "If the applicant had taken some care to estimate his liability on some reasonable basis, such a state of affairs would not have arisen. In addition I should like to mention that the applicant had not submitted any return for the period from 1st April, 1952, to 30th October, 1952.
I am of the opinion that the applicant has tried to submit the quarterly returns just for the sake of submitting them by claiming the deductions in a very arbitrary manner". On this ground he rejected the revision application.
2. Sub-section (3A) of Section 12 of the Bombay Sales Tax Act, 1946, which was inserted by the Bombay Act 1 of 1949 and came into operation with effect from 1st April, 1949, is in these terms : "If the tax payable under this Act is not paid by any dealer within the prescribed time, the dealer shall pay, by way of penalty in addition to the amount of tax a sum not exceeding three-fourth per cent, of the amount of tax for every month after the expiry of the prescribed period during which he continues to make default in the payment of the tax. The penalty so levied shall be without prejudice to any prosecution instituted for an offence under this Act". The period under assessment comprises 14 quarters in respect of which the applicants made payments in time except for one quarter ending on 30th June, 1951, the delay in that case having been of about 4 months. The penalty has been charged on the difference between the applicants' total liability as found, and what was paid, such difference amounting to Rs. 7,844-11-3. On this amount a penalty of three-fourths per cent, per month has been charged on the differences found due for the different quarters making up the above mentioned total.
3. Shri Kabe for the opponent relies on Section 5 of the Bombay Sales Tax Act, 1946, as the charging section. According to him under that section whatever is ultimately found due the assessee is responsible for paying in full even before the assessment is made, and this is the meaning of the expression "tax payable" in Sub-section (3A) of Section 12. Three expressions have been used in connection with the assessee's liability in the Act, viz., "liable to pay tax" (section 5); "tax due" [section 11 (1A)], and "tax payable" [section 12, including Sub-section (3A) thereof]. The contention of the applicants is that the tax does not become payable till it is assessed by the authorities. He points out that in Sub-section (1A) of Section 11 it is laid down that if the Commissioner is satisfied, without requiring the presence of a registered dealer or the production by him of any evidence, that the returns furnished in respect of any period are correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns ; so that even in a case where the assessing authority finds it unnecessary to make any inquiry and can accept the returns as furnished, it is necessary for him to make an assessment, and thus an importance is given to the assessment which is not to be found in the corresponding Act of several States. The applicants* contention is that the mere liability to pay tax under Section 5 does not make the tax payable within the meaning of Sub-section (3A) of Section 12. In our opinion, this contention is correct. In the case of Whitney v.Commissioners of Inland Revenue  A.C. 37, Lord Dunedin observed : "There are three stages in the imposition of a tax ; there is the declaration of liability) that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment. That, ex hypothesi, has already been fixed. But assessment particularises the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay". In the case of Chatturam Horilram Ltd. v. Commissioner of Income-tax  27 I.T.R.709, Section 3 of the Income-tax Act was referred to, and their Lordships observed, "It is by virtue of this section that the actual levy of the tax and the rates at which the tax has to be computed is determined each year by the annual Finance Acts. Thus, under the scheme of the Income-tax Act, the income of an assessee attracts the quality of taxability with reference to the standing provisions of the Act but the payability and the quantification of the tax depend on the passing and the application of the annual Finance Act". Section 3 of the Indian Income-tax Act says that "where any Central Act enacts that income-tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year", etc. This provision appears to us to correspond to the provisions of Section 5 of the Bombay Sales Tax Act, 1946, and the provisions regarding the payability and the quantification of the tax in the annual Finance Act appear to us to correspond to the provisions of Section 12 of the Bombay Sales Tax Act, 1946.
4. Sub-section (4) of Section 12 of the later Act reads as follows :- "(i) The amount of tax- (a) due where the returns are furnished with receipt showing full payment thereof, or (b) assessed under Sub-sections (1), (1A), (2), (3) and (4) of Section 11 less the sum, if any, already paid by the dealer in respect of the said period, or (c) assessed under Sub-section (5) of Section 11 together with the penalty directed to be paid under that sub-section, and (ii) the amount of the penalty payable under Sub-section (3A) shall be paid by the dealer into a Government treasury by such date as may be specified in a notice issued by the Commissioner for this purpose and the date to be so specified shall be not less than thirty days from the date of service of such notice : Provided that the Commissioner may, in respect of any particular dealer and for reasons to be recorded in writing, extend the date of such payment or allow such dealer to pay the tax due and the penalty (if any) by instalments.
Clause (ii) of the said sub-section provides that the penalty payable under Sub-section (3A) shall also be payable by the dealer. We are not concerned in this case with Sub-clause (a) of Clause (i) of Sub-section (4). Clauses (b) and (c) deal with the tax "assessed" under different subsections of Section 11. Here in this case the assessment was not made under Sub-section (1A), (3), (4) or (5) of Section 11, but under Sub-section (2) thereof. It is after such assessment that the tax assessed "shall be paid by the dealer", not on any prior date but by the date specified in a notice of demand for payment "not less than 30 days from the date of service of such notice", under Sub-section (4) of Section 12. It is in this sense, in our opinion, that the expression "tax payable" [also used in Sub-section (1) of Section 12] should be construed ; so that in this case before the tax due became payable the assessment under Sub-section (2) of Section 11 had to be made, except with regard to the part of the tax governed by Sub-section (2) of Section 11 in respect of one quarter. That sub-section reads thus :-"Before any registered dealer furnishes the returns required by Sub-section (1) of Section 10 he shall, in the prescribed manner, pay into a Government Treasury the full amount of tax due from him under this Act according to such returns and shall furnish, along with the returns, a receipt from such treasury showing the payment of such amount". This provision makes "the full amount of tax due...according to such returns". In our opinion, therefore, the penalty under Sub-section (3A) of Section 12 will be leviable (a) in respect of the tax due according to the assessees' return which was furnished late and (b) where the amount due was not paid within the prescribed time after assessment under Section 11. As regards (a) Shri Kabe has informed us that the penalty leviable on the basis of three-fourth per cent, per month would come to Rs. 7-4-0. As regards (b) the demand notice after assessment was received by the assessees on 18th December, 1953, and the payment was made on 22nd January, 1954, i.e., the payment was late by a few days beyond the period allowed for payment. We do not wish to interfere with the rate of penalty at three-fourth per cent, per month on the assessment which has been levied by the lower authorities, although they have given no reasons for imposing the maximum rate, as the amounts due under (a) and (b) are small. We, therefore, allow the application, and direct that the order of the Additional Collector shall be amended in accordance with the direction given above.