R. C. Lahoti, J. - (1.) Whether the appellant, an assessee, is liable to pay any penal interest on the assessed tax under Section 23(3) of the Kerala General Sales Tax Act, 1963 (hereinafter 'the Act', for short), from the date when return was due though neither a return was furnished nor any tax paid on self-assessment basis, is the question arising for decision in this appeal.
(2.) Briefly stated the relevant facts are as follows. In April, 1983 the appellant, stationed in Patna, entered into an agreement with M/s. Tata Oil Mills Co. Ltd. to supply imported inedible tallow to their factory at Ernakulam. Accordingly, the tallow was imported at the Cochin Port and delivered to the buyer. The appellant did not file a return of the turnover relating to the above-said transaction. The Sales Tax Officer finalised the assessment on 10-10-1984 and served the appellant on 4-3-1985 with notice raising a demand of sales tax whereafter the tax was paid. The appellant was then served with two notices raising demand for payment of Rs. 1,85,882.58p. as penal interest under sub-section (3) of Section 23 of the Act for the period 20-5-1983 (the date by which the return of turn-over was due to be filed accompanied by proof of payment of the tax due as per return) to 25-2-1985. This demand was impugned by filing a writ petition before the High Court of Kerala at Ernakulam. A learned single Judge allowed the petition and quashed the said demand. The State of Kerala preferred a writ appeal which has been allowed and the judgment of the learned single Judge has been set aside. The aggrieved appellant has filed this appeal by special leave.
(3.) Sub-section (3) of Section 23 of the Act reads as under:- "(3) If the tax or any other amount assessed or due under this Act is not paid by any dealer or other person within the time prescribed therefor in this Act or in any rule made thereunder and in other cases within the time specified therefor in the notice of demand, or within the time allowed for its payment by the appellate or revisional authority, as the case may be, or if payment is permitted in instalments by any of the authorities empowered in this behalf, any such instalment is not paid within the time specified, therefor, the dealer or other person shall pay, by way of penal interest, in the manner prescribed, in addition to the amount due, a sum equal to- (a) one per cent of such amount for each month or part thereof for the first three months after the date specified for its payment; (b) two per cent of such amount for each month or part thereof subsequent to the first three months aforesaid." ;