High Court · 2012

35C. Interest payable by assessee - (1) Where on making the regular assessment u nder section 20, the Agricultural Income Tax Officer finds that no payment of ad vance tax has been made in accordance with the provisions of section 35 or secti on 35A, interest at the rate of two per centum for each English Calendar month f rom the first day of April succeeding the financial year in which the advance ta x was payable up to the month prior to the month of such regular assessment shal l be payable by the assessee. (2) Where as a result of an order under section 21, section 24, section 26, sect ion 27, section 31, section 28 or section 29 the amount on which interest was pa yable under this section or section 35B has been reduced, the interest shall be reduced proportionately and the excess interest paid, if any, shall be refunded. 35H. Interest for deferment of advance tax- Where, in any financial year, the as sessee who is liable to pay advance tax under section 35 or 35A, has failed to p ay such tax by the prescribed date, he shall be liable to pay simple interest at the rate of one and half percent per month with effect from the immediate next day of the day as prescribed for payment of advance tax for the respective quart er, on the unpaid amount by which the tax to be paid for that quarter falls shor t, till the date of full payment of such short fall : Provided, however that the provisions of this section shall apply only u pto the end of the financial year, after which the provisions of section 35C as renumbered, shall apply. (cid:29)

7. The amendment made is as follows : (cid:28)8B. Notwithstanding anything contained in any other provision of this Act, in c ase of an assessee, being a company, which derives income from cultivation, manu facture and sale of tea, if the agricultural income tax payable under this Act o n the sixty percent portion of agricultural income computed as per provisions of the Income Tax Act, 1961 is less than ten percent of the sixty percent of the b ook profit computed in the manner as referred to in section 115 JB of the Income Tax Act, 1961, sixty percent of such book profit shall be deemed to be the agri cultural income for the purpose of levy of agricultural income tax under this Ac t of such assessee and the assessee shall be liable to pay agricultural income t ax at the rate of ten percent of such agricultural income. (cid:29)

8. In the face of the plain language of the above provisions, it is not pos sible to hold that the amended provisions did not apply for the assessment year 2009-2010 as such provisions were brought for the first time in the assessment y ear. Same is the position with regard to liability to pay interest.

9. Learned counsel for the petitioner relied upon the judgment of the Hon’b le Supreme Court in J.K. Synthetics Limited -Vs.- Commercial Taxes Officer, (199 4) 4 SCC 276 to submit that failure to deposit tax due before making of assessme nt could not attract interest.

10. The judgment relied upon cannot apply to the present case. Therein, Sect ion 11-B of the Rajasthan Sales Tax Act, 1954 came up for consideration in the l ight of Section 7(2) of the said Act. Under the scheme of the Act, liability to pay interest arose on failure to make payment of the amount payable as per retur n. If the assessee has paid as per return, he was not liable to pay interest. Th is is not the position under the scheme of the present law. The advance tax liab ility has been created which requires the assessee to pay tax on bonafide estima te of the income failing which there is liability to pay interest. If payment is not made during the financial year, higher rate of interest is attracted.

11. In view of above, we do not find any merit in these petitions. It is, ho wever, made clear that since we have gone only into the validity of the applicab ility of the impugned provisions, this order will not debar the petitioner from raising any other issue before the statutory forum in accordance with law.