Agricultural Income Tax Officer and Others vs Mangode Estate

T.L. Viswanatha Iyer, J.—The challenge in the writ petition was to the imposition of penalty u/s 17A(3) of the Kerala Agricultural Income Tax Act, 1950 ("the Act"), for non-payment, along with the return of tax admittedly due for the assessment year 1981-82. The learned single judge allowed the writ petition, following the decisions of two learned single judges of this court in Samogiri Pvt. Ltd. Vs. Agricultural Income Tax Officer and Another, and Velimalai Rubber Co. Ltd. Vs. Inspecting Assistant Commissioner of Agricultural Income Tax and Sales Tax and Another, . The Revenue is in appeal before us.

The return for the year was due on June 1, 1981, but the assessee filed it only on March 22, 1982. He had admitted a tax liability of Rs. 1,05,983 in the return. This amount was paid before the return was filed, though after June 1, 1981, when the return was due. In the view that the admitted tax had to be paid before the due date for filing the return, and that non-payment thereof in time attracts the provisions of Section 17A(3), the assessing authority imposed a penalty of Rs. 21,197 under the said provision by the proceedings, exhibit P-1. The assessee challenged it with the plea that Section 17A(3) is attracted only if there is default in payment of the admitted tax before or along with the return and that mere delay in paying the admitted tax before the due date for filing the return, namely, June 1 of the relevant assessment year, will not entail the penalty under the said provision. This was accepted by the learned single judge, as we stated earlier, relying on the two decisions referred to.

The matter is really covered by two Bench decisions of this court, one of Paripoornan and Nayar JJ. in Inspecting Assistant Commissioner of Agricultural Income Tax and Sales Tax and Another Vs. Velimalai Rubber Co. Ltd., (Appendix) (Writ Appeal No. 390 of 1991), an appeal against the decision in Velimalai Rubber Co. Ltd. Vs. Inspecting Assistant Commissioner of Agricultural Income Tax and Sales Tax and Another, referred to earlier. The appeal was dismissed in limine, by the Bench with the observation that what Section 17A(3) contemplates is levy of penalty for "non-payment" of the tax admitted to be due in the return, at the time the return is filed. Section 17A(3) justifies this conclusion in as much as it starts with the words "if any person fails to pay the tax or any part thereof in accordance with the provisions of Sub-section (1)". What Sub-section (1) contemplates is filing of the return and payment of the tax along with the return. The default for which penalty u/s 17A(3) is leviable is non-payment of the tax before or along with the return. If the return is delayed and that results in non-payment of the tax in time, the remedy of the revenue is elsewhere, and not u/s 17A(3). This was the ratio in W. A. No. 390 of 1991 Inspecting Assistant Commissioner of Agricultural Income Tax and Sales Tax and Another Vs. Velimalai Rubber Co. Ltd., (Appendix)). This decision was followed by another Bench of Varghese Kalliath and P. A. Mohammed JJ., in their judgment in W. A. No. 65 of 1990 rendered on February 22, 1994.

The default contemplated by the section is non-payment of the tax admitted to be due before or along with the return, and not non-payment on the due date for the filing of the return. True, the Act prescribes the date before which the return is to be filed, but on the language of the provision, the penalty is not leviable for default in payment on that day, but for default in payment before or along with the return. The terminus a quo for calculating the amount of penalty is the actual date of filing the return and not the. date on which it should have been filed.

We are, therefore, in agreement with the ratio of the above two decisions. There is no reason to take a different view having regard to the language of Section 17A(3). The decision of the learned single judge is, therefore, correct. The writ appeal entails dismissal. It is accordingly, dismissed.