DWARKA PRASAD, J. - (1.) AS a common question of law arises in these two cases, we propose to dispose of them by a common order. These reference applications under section 15 (2) and section 15 (3a) of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Act") are treated as revision petitions under section 15 (1) of the Act as amended by the Rajasthan Sales Tax (Amendment) Act, 1984, because of the provisions of sub-section (10) of section 13 of the Amending Act of 1984, as they were pending before this Court at the time when the amending Act of 1984 came into force. The question which arises in both these cases is as to whether interest could be levied under section 11b of the Act in respect of default of payment of tax for part of a month at the relevant time. The period of assessment in the case of M/s. Hemraj Udhyog in respect of which this question arose, was from June 22, 1974, to July 10, 1975. In the case of M/s. Keshrilal Lalchand the period of assessment was from April 1, 1971, to March 31, 1972. The provisions of section 11b of the Act, which are relevant for consideration in these cases read as under : " 11b. Interest on failure to pay tax, fee or penalty.- (a) If the amount of any tax payable under sub-section (2) and (2a) of section 7 is not paid within the period allowed, or (b) if the amount specified in any notice of demand, whether for tax, fee, or penalty, is not paid within the period specified in such notice, or in the absence of such specification, within 30 days from the date of service of such notice, the dealer shall be liable to pay simple interest on such amount at one per cent per month from the day commencing after the end of the said period for a period of three months and at one and a half per cent per month thereafter during the time he continues to make default in the payments : Provided that, where, as a result of any order under this Act, the amount, on which interest was payable under this section, has been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded : Provided further that no interest shall be payable under this section on such amount and for such period in respect of which interest is paid under the provisions of sections 11 and 14. "
(2.) IT was held by the Board of Revenue that according to section 11b of the Act interest could be charged only in respect of completed months and that no interest was chargeable for default in the payment of tax in respect of periods of time less than a month. IT was argued by the learned counsel for the department that the crucial words in the provisions contained in section 11b of the Act were "during the time" and that the Board was not justified in holding that interest could be charged under those provisions only for completed months in default and not for shorter period constituting a month. On the other hand, it was argued by the learned counsel for the assessees that the Board of Revenue has consistently taken the view right from 1976 up-till now that interest under the aforesaid provision of section 11b of the Act could be charged only for completed months and that a period of less than a month should be ignored on the ground that the words "per month" were employed in section 11b of the Act. It may be pointed out that prior to the insertion of section 11b in the Act, provision relating to penalty was contained in section 16 (1) (b) of the Act and according to clause (ii) of section 16 as it stood prior to May 2, 1969, if a dealer without reasonable cause failed to pay any tax, fee or penalty within time, then in addition to the amount payable, penalty was payable at the rate of 1 per cent of the amount of tax, fee or penalty for each completed month for the first three months and at the rate of 1 1/2 per cent for each completed month thereafter during the time the default continues. On May 2, 1969, the provision relating to penalty for default in payment of tax, fee or penalty contained in section 16 (1) (b) of the Act was deleted by amending Act No. 11 of 1969 and the provisions of section 11b as reproduced above, were inserted. These provision continued to hold the field until section 11b was wholly substituted by a new section 11b with effect from April 7, 1979, by the amending Act No. 4 of 1979. According to sub-section (1) of section 11b, as the provision now stands after April 7, 1979, if a dealer has not paid tax as per the return or within the time allowed by or under the provisions of the Act, he is liable to pay interest on the whole or that part of the amount of tax which has not been paid as per the return, at the rate of 1 1/2 per cent per month from the date by which he is required to pay the tax by or under the provisions of the Act for a period of three months and at the rate of 1 1/2 per cent thereafter until the date of payment. Thus the position of law has been clearly specified from April 7, 1979, that interest was payable with effect from the date by which the dealer was required to pay the tax until the date of payment. However, as pointed out above, we are concerned with the period between May 2, 1969, and April 7, 1979, in which the unamended provision of section 11b of the Act was in force. Learned counsel for the Revenue sought support for his submission by referring to provisions of the Income-tax Act relating to imposition of penalty and the decisions bearing on such provisions. We may point out that the provisions relating to imposition of penalty contained in section 271 (1) (a) of the Income-tax Act, 1961 provide that penalty is payable in the circumstances mentioned therein for "every month during which the default continued". Thus, from the very language employed in section 271 (1) (a) of the Income-tax Act, 1961 it is quite clear that penalty could be imposed only for completed months during which the default continued and no penalty could be imposed for fraction of a month on account of the expression "for every month" used in the aforesaid provision. As such there could be no controversy about the provisions relating to imposition of penalty under the Income-tax Act. The expression used in section 11b of the Act is "during the time he continues to make default to pay tax" and it is possible that the aforesaid may be interpreted to mean not only completed months but also fraction of a month, but it was pointed out by the learned counsel for the assessees that the Board of Revenue has consistently interpreted the provisions contained in section 11b of the Act as referring to completed months and it has been held that a period less than a month should be ignored in calculating interest imposable under section 11b of the Act. In face of the fact that the Board of Revenue has taken this view consistently for a loan period of ten years, it is urged that this Court should not unsettle the settled position relating to the interpretation of the provisions contained in section 11b of the Act even if two views on the subject are possible. It cannot definitely be held that the view taken by the Board of Revenue is wholly erroneous and the language employed by the legislature in section 11b of the Act is capable only of one interpretation that interest is imposable also on fractions of a month. To our mind it appears that the provisions contained in the unamended section 11b of the Act are ambiguous and can be interpreted in the manner in which the Board of Revenue has tried to interpret the same, although it is possible that we may decline to take a different view. We may refer to the decisions of the Board of Revenue which have been brought to our notice on the subject.
(3.) IN Premier Vegetable Products v. Commercial Taxes Officer, Special Circle II, Jaipur 1974 RRD 324, although the question of charging interest on the outstanding amount of tax arose and interest was undoubtedly charged for a period of 20 days, but no objection was raised, not the question was considered in the aforesaid decision as to whether the interest could be legally charged under section 11b of the Act in respect of a fraction of month or for a period less than a completed month. Then in Nagpal Bros. v. Commercial Taxes Officer, Special Circle I, Jaipur 1976 RRD 330 a single member of the Board of Revenue held that interest was imposable only for completed months, although in this decision also no discussion appears relating to the interpretation of section 11b of the Act. In Commercial Taxes Officer, Special Circle I, Jaipur v. National Engineering Industries Ltd. (1978) 12 TR 295 a Division Bench of the Board of Revenue held that interest could not be imposed if the amount of tax remained unpaid for less than one month and agreed with the view taken by the Board of Revenue in Nagpal Brothers' case 1976 RRD 330. ;