Commercial Taxes Officer vs Nalwaya Minerals and Motor Parts

Milap Chandra, J.—These revision petitions have been filed u/s 15 of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Rajasthan Act"), against the common order of the Rajasthan Sales Tax Tribunal, Ajmer, dated September 10, 1988, by which it has held that interest could not be charged u/s 11-B on the amount of tax levied on assessment u/s 12 of the Rajasthan Act. The facts of the cases giving rise to these revision petitions may be summarised thus.

The original assessments for the assessment years 1968-69 and 1969-70 were made on January 27, 1973, under the Central Sales Tax Act (hereinafter to be called "the Central Act"). In these proceedings, deductions of the amounts of sales to the extent of Rs. 64,674.85 and Rs. 83,959.85 were allowed on the ground that these sales were in the course of export. The cases were reopened u/s 12 of the Rajasthan Act read with Section 9 of the Central Act. In the reassessment proceedings, the assessing authority held that the said sales were not in the course of export and levied tax and interest. These matters were agitated in appeals and revisions. Even after two remands, it was ultimately held by the Commercial Tax Officer (Special Circle), Udaipur, that the aforesaid sales were not in the course of export and accordingly levied tax on these sales by his orders dated May 11, 1987, passed u/s 12 of the Act. Interest u/s 11-B was also imposed. Appeals were preferred against these orders before the Deputy Commissioner (Appeals), Udaipur. They were dismissed by orders dated January 29, 1988. Thereafter, the assessee preferred second appeals before the Rajasthan Sales Tax Tribunal, Ajmer. The Tribunal held that the said sales could not be held as sales in the course of export and maintained the levy of tax. As regards the imposition of interest, it observed that it is the consistent view of the Tribunal that interest cannot be charged on the amount of tax levied u/s 12 of the Act. Accordingly, the levy of interest of Rs. 21,215 and Rs. 25,944 imposed u/s 11-B of the Rajasthan Act read with Section 9(2) of the Central Act, was set aside.

It has been contended by the learned counsel for the Revenue that the Tribunal has seriously erred in holding that no interest is leviable on the amount of tax assessed u/s 12 of the Rajasthan Act particularly when it is leviable in the provisional assessments under Sections 7-A and 7-B and regular assessments under Sections 10 and 10-A of the Rajasthan Act and such an interpretation is contrary to the letter and spirit of the provisions of Section 11-B. He further contended that it is illogical and unreasonable that interest is leviable in provisional and regular assessments but not on reassessment, arising from the detection of escapement or evasion of tax. He also contended that the liability for the payment of interest is automatic, relying upon Associated Cement Company Limited Vs. Commercial Tax Officer, Kota and Others, . He lastly contended that Section 12 has been added in the explanation of Section 11-B by the Rajasthan Sales Tax (Amendment) Act, 1987, w.e.f. April 1, 1987 and it (Act No. 7 of 1987) is clarificatory in nature.

In reply, it has been contended by the learned counsel for the assessee that it is well-settled law that a taxing statute is to be interpreted strictly and there is no equity or logic in interpreting it. He also contended that the Tribunal has observed in the order under revision that it is its consistent view that interest is not leviable in the assessments u/s 12 of the Rajasthan Act. He relied upon Commercial Taxes Officer, Circle ''B'' Jaipur Vs. Hemraj Udhyog and Another,

The only question for consideration in these revision petitions is whether the interest was leviable u/s 11-B in the assessment proceedings u/s 12 of the Rajasthan Act, relating to assessment years 1968-69 and 1969-70. Section 11-B was inserted in the Act for the first time w.e.f. May 2, 1969. It was substituted by Section 8 of the Rajasthan Act No. 4 of 1979 w.e.f. April 7, 1979. Explanation given below Sub-section (1) of Section 11-B runs as under :

"Explanation.--The expression ''liability to pay tax is quantified'' in this clause means determination of the tax liability u/s 7A, 7B, 10, 10A, 13 or 14 of this Act :

Provided that, where any such dealer shows to the satisfaction of the assessing authority that the whole or any part of the balance of tax found due or liability to pay tax quantified is attributable to any particular period, he shall be liable to pay interest on such amount at the rate of two per cent per month from the date by which the tax for the said period was required to be paid by or under the provisions of this Act until the date of quantification."

Section 12 does not find mention in it. For the first time, it has been added by Section 10 of the Rajasthan Sales Tax (Amendment) Act, 1987 (Rajasthan Act No. 7 of 1987), with effect from April 1, 1987. In a taxing Act one has to look merely at what it is clearly said. There is no room for any intendment. Nothing is to be read in and nothing is to be implied. The subject is not taxed unless the words of taxing statute unambiguously imposes the tax on him. If the legislature fails to express itself clearly, and tax payers escape by not being brought within the letter of law, no question of unjustness as such arises. Courts are not entitled to fill in any lacuna in any taxing Act. It has been observed in State of Punjab Vs. Jullunder Vegetables Syndicate, , as follows :

"Before we advert to the rival contentions it will be convenient to clear the ground. It is a settled rule of construction that in interpreting a fiscal statute the court cannot proceed to make good the deficiencies, if there be any, in the statute ; it shall interpret the statute as it stands and in case of doubt, it shall interpret it in a manner favourable to the tax payer : See C.A. Abraham, Uppoottil, Kottayam Vs. The Income Tax Officer, Kottayam and Another, . In considering a taxing Act, the Court is not justified in straining the language in order to hold a subject liable to tax."

The above quoted explanation is a charging provision and not a provision prescribing machinery for the computation of interest. Such provisions are strictly construed. Reference of Murarilal Mahabir Prasad and Others Vs. Shri B.R. Vad and Others, , may be made here. It has been held in H.H. Prince Azam Jha Bahadur (Dead) through LRs Vs. Expenditure Tax Officer, , that logic or reason is not of much avail in a taxing Act.

There is yet another aspect of the matter. Para No. 10 of the order of the Tribunal runs as under :

"10. As regards charging of interest in the reassessment proceeding is concerned, there is consistent view of the Tribunal that the interest cannot be charged in reassessment proceedings u/s 12 of the State Act. The Tribunal, in the case of Abdul Karim, Stone Contractor v. Commercial Taxes Officer reported in (1986) RTC 251, has held as under:

''No liability when assessment made u/s 12--Ashoka Traders v. Assistant Commercial Taxes Officer (1986) RTC 165 followed.''

Similar view was taken by the Tribunal in [1988] 3 RTJS 229 and (1986) RTC 165."

It has been held in Commercial Taxes Officer, Circle ''B'' Jaipur Vs. Hemraj Udhyog and Another, as follows :

"In these circumstances, we arc of the view that a particular interpretation was accepted and acted upon by the taxing authorities for a long period of time and the provision no longer exists, but has been replaced by a different provision, it would not be proper for this Court to depart from the interpretation which has held the field for a very long time. We may refer in this connection to a decision of their Lordships of the Supreme Court in Commissioner of Income Tax, West Bengal III Vs. Balkrishna Malhotra,

Having regard to these facts, circumstances and authoritative observations, there exists no good ground for interference.

Consequently, the revision petitions are dismissed. No order as to costs.