- (1.) THIS is a reference under Section 42 of the Haryana General Sales Tax Act, 1973 (for short "the Act") made at the instance of the Excise and Taxation Commissioner, Haryana. First the factual matrix : The respondent-dealer was required to file return for the quarter ending 30th June, 1976, on or before 30th July, 1976. He made an application for extension of time for filing the return. The extension was granted and the dealer was permitted to file return on or before 6th August, 1976. Complying with this order the dealer filed his return and paid the tax on 5th August, 1976. However, the Assessing Authority was of the view, inspired by the decision of the Final Court in Haji Lal Mohd. Biri Works v. State of U. P. [1973] 32 STC 496, that under Section 25 (5) of the Act the assessee became liable to pay interest on the amount of tax which became due and was not paid with effect from the date prescribed for filing the return. Liability to pay interest on the unpaid tax is created by the statute and the Assessing Authority has no discretion to grant any exemption from payment of any interest. The liability to pay interest is automatic and arises by operation of law. He held that the dealer was liable to pay Rs. 9,393 as interest under Section 25 (5) of the Act. Aggrieved, the dealer filed an appeal. The first appellate court affirmed the findings and conclusions of the Assessing Authority and held that despite the extension granted for filing the return, the dealer must pay interest. Still dissatisfied, the dealer went up in second appeal before the Sales Tax Tribunal, Haryana. The Sales Tax Tribunal, Haryana, held that on a conjoint reading of Section 25, Rules 2 (q), 17 and 62 of the Haryana General Sales Tax Rules, 1975 (hereinafter referred to as "the Rules"), the competent authority can extend the time for filing returns. The prescribed date for submission of the return, in such a case, shifts to the date fixed by the competent authority for filing the return and as such the provisions of Sub-section (5) of Section 25 of the Act do not come into play. The dealer was not liable to pay interest. He allowed the appeal and quashed the orders charging interest on the amount of the tax which has not been paid by 30th July, 1976.
(2.) THE Excise and Taxation Commissioner, Haryana, made an application under Section 42 of the Act and the Sales Tax Tribunal, Haryana, has referred the following question for our opinion : "whether, on the facts and in the circumstances of the case, interest was chargeable from the said firm under the provisions of Section 25 (5) of the Act, for the assessment year 1976-77 for the quarterly return due on 30th June, 1976, which was filed and paid the tax on 5th August, 1976, though having been granted extension of time by the appropriate authority ?" In order to resolve the legal issue posed in the question it will be apposite to read the relevant statutory provisions. "25. Submission of returns and payment of tax.-- (1) Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals, as may be prescribed. (2) Such dealer as may be required to do so by the Assessing Authority by notice served in the prescribed manner and every registered dealer shall furnish such returns by such dates and to such authority, as may be prescribed. (3) Before any registered dealer furnishes the returns required by Sub-section (2), he shall, in the prescribed manner, pay into a Government Treasury or the Reserve Bank of India or the State Bank of India the full amount of tax due from him under this Act according to such returns and shall furnish along with the returns receipt from such treasury or bank showing the payment of such amount. (4 ). . . . . . . . . . . . . . . (5) If any dealer fails to pay the tax due as required by Sub-section (3) he shall be liable to pay in addition to the tax due simple interest on the amount due at one per centum per month from the date commencing with the date following the last date for the submission of the return under Subsection (2) for a period of one month and at one and a half per centum per month thereafter during the period he continues to make default in the payment : RULES 2 (q) 'quarter' means the period from- (i) 1st April to 30th June, (ii) 1st July to 30th September, (iii) 1st October to 31st December, (iv) 1st January to 31st March. 17. Payment of tax and submission of returns [section 25].- (1) Every registered dealer or a dealer on whom a notice in form S. T. 8 has been served under Sub-section (2) of Section 25 in the State shall furnish return to the appropriate Assessing Authority in form S. T. 9 or in form S. T. 10 or both, as the case may be, for each quarter of a year, within thirty days of the expiry of the quarter. (2) Each return shall be accompanied by- (i) a treasury receipt in form S. T. 11 or a crossed bank draft in favour of the Assessing Authority drawn on a Scheduled bank with a branch situated at the headquarters of the appropriate Assessing Authority or at the head office of the business of the dealer in respect of tax and surcharge due according to return ; (ii) a list in form S. T. 12 showing the sale of goods leviable to tax at the first stage of sale or purchase and certificates in forms S. T. 13 and S. T. 14 or duplicate copy of the cash memo, or bill, as the case may be. 62. Where in these rules a period is prescribed for doing a certain act, the appropriate authority may, for special reasons to be recorded in writing, extend that period from time to time. "
(3.) IT is clear from a perusal of the above quoted statutory provisions that a dealer is liable to pay tax in the manner provided at such intervals as may be prescribed. Every registered dealer is obliged to furnish returns by such dates and before such authority as may be prescribed. Before filing the return the registered dealer shall pay into the Government Treasury or the State Bank of India the full amount of tax due from him under the Act according to such returns and append the receipt regarding such payment with the returns. If a dealer fails to pay the tax, he shall be liable to pay in addition to the tax due simple interest on the amount due at one per centum per month from the date commencing with the date following the last date for submission of the return under Sub-section (2) of Section 25 of the Act for a period of one month and thereafter at the rate of one and a half per centum per month. It is thus clear that the liability to pay interest on the non-payment or delayed payment of tax commences with the date following the last date for submission of the return under Sub-section (2) of Section 25 of the Act. Rule 62 clothes the appropriate authority with powers to extend the period prescribed for doing certain acts. The appropriate authority can, therefore, for special reasons to be recorded, extend the time prescribed for filing the returns or payment of tax.;