JUDGMENT
Dr. B.P. Saraf, J.
1. By this reference under section 61(1) of the Bombay Sales Tax Act, 1959, made at the instance of the assessee, the Maharashtra Sales Tax Tribunal has referred the following question of law to this Court for opinion :
“Having regard to the provision of section 36(3) of the Bombay Sales Tax Act, 1959, whether penalty can be levied in respect of default for a part of a month ?”
2. The material facts relevant for deciding the controversy are as follows : The assessee is reseller in chemical and plastic raw materials having a number of agencies. The main business of the assessee is to receive plastic raw materials from Indian Petro Chemicals Corporation, Baroda, on consignment basis and to sell the same to the local manufacturers. He is registered as a dealer under the Bombay Sales Tax Act, 1959 (“the Bombay Act” or “the Act”) as well as the Central Sales Tax Act, 1956 (“the Central Act”). For the period from November 5, 1983 to October 24, 1984, he was assessed by the Assistant Commissioner of Sales Tax (Assessment), Bombay, under the Bombay Sales Tax Act, 1959 and the Central Sales Tax Act, 1956, by his order of assessment dated April 7, 1987. The said order of assessment-cum-penalty resulted in a demand notice for a sum of Rs. 2,75,036 under the Bombay Act and Rs. 9,726 under the Central Act. The above demand included a sum of Rs. 2,38,571 levied by way of penalty under section 36(3) of the Act in the assessment under the Bombay Act and Rs. 1,330 in the assessment under the Central Act. The assessee appealed to the Deputy Commissioner of Sales Tax, Bombay (“the Deputy Commissioner”) against the levy of penalty under section 36(3) of the Act. The Deputy Commissioner upheld the levy of penalty but reduced the quantum thereof under both the Acts. The penalty under the Bombay Act was reduced from Rs. 2,38,571 to Rs. 1,43,171 and under the Central Act from Rs. 1,330 to Rs. 810. The assessee went in second appeal to the Maharashtra Sales Tax Tribunal (“the Tribunal”). Before the Tribunal, the assessee challenged the quantum of penalty on the ground that the penalty had been levied for periods less than a month which, according to the assessee, on a correct interpretation of section 36(3)(b) of the Act, was not tenable. The Tribunal did not accept the above contention of the assessee and following its earlier decision dated April 22, 1982, in the case of Perfect Engineering Associates v. State of Maharashtra in Second Appeal Nos. 148 and 149 of 1981 held that penalty under section 36(3) could be calculated not only for a completed month but also for a part thereof. Hence this reference at the instance of the assessee.
3. Mr. Surte, learned counsel for the assessee, urged before us that penalty under section 36(3) could be levied only for a complete month and not for a part thereof. In support of this contention, our attention was drawn to sub-section (3) of section 36 of the Act as substituted by the Maharashtra Act 22 of 1988 with effect from April 21, 1987, wherein the words used are “for each month or for part thereof” as against the words “for each month” appearing in the said sub-section as it stood during the material period which was prior to April 21, 1987. According to him, the substituted section clearly shows that under the earlier provision, penalty could be levied only for a completed month and not a part thereof. On the other hand, the submission of the learned counsel for the Revenue Mr. N. T. Saraf, is that section 36(3) as it stood at the material time, provided in clear and unambiguous terms that the penalty would be leviable for the period of default calculated at the rates which were specified therein with reference to a month. There is nothing there to suggest that penalty can be levied at those rates for default for completed months only and not for any period which falls short of a complete month.
4. We have carefully considered the rival submissions. We have perused section 36(3) of the Bombay Sales Tax Act, 1959, as it stood from time to time. For a proper appreciation of the controversy, it will be useful to set out the said sub-section as it stood from time to time. Sub-section (3) of section 36 originally stood as under :
“(3) If a dealer does not, without reasonable cause, pay tax within the time he is required by or under the provisions of this Act to pay it he shall subject to the provisions of sub-section (5) of section 55 pay by way of penalty, in addition to the amount of tax a sum equal to –
(a) one per cent of the amount of tax for each complete month for the first three months, after the last date by which he should have paid that tax, and
(b) one and one-half per cent of the amount of tax for each complete month thereafter, during the time he continues to make default in the payment of tax :
Provided that, the Commissioner may subject to such conditions as may be prescribed, and an appellate authority in an appeal under section 55, may remit the whole or any part of the penalty payable in respect of any period.”
By the Bombay Sales Tax (Amendment) Act, 1969 (the Maharashtra Act XL of 1969) the bracketed portion beginning with the words “he shall” and ending with the words “in respect of any period” was substituted by the following :
“the Commissioner may, after giving the dealer an opportunity of being heard, by an order in writing, impose upon the dealer by way of penalty, in addition to the amount of tax a sum equal to –
(a) one per cent of the amount of tax for each month for the first three months, after the last date by which dealer should have paid that tax, and
(b) one and one-half per cent of the amount of tax for each month thereafter, during the time the dealer continues to make default in the payment of tax :
Provided that, the Commissioner, or any appellate or revisional authority, may remit the whole or any part of the penalty payable in respect of any period.”
This amendment came into force with effect from September 1, 1969 and the amendment sub-section remained in operation till April 20, 1987, except that by the Maharashtra Act 32 of 1973, with effect from April 11, 1973, the rates of penalty in clauses (a) and (b) were enhanced from one per cent and one and one half per cent to one and one half per cent and 2 per cent respectively and a second proviso was also added during this period by the Maharashtra Act 32 of 1981 which was later amended by Maharashtra Act 15 of 1985. These amendments are not relevant for our purpose.
This sub-section was substituted with effect from April 21, 1987, by the Maharashtra Act 22 of 1988 by the following :
“(3) (a) If a dealer or a person does not pay the tax within the time he is required by or under the provisions of this Act to pay it, then he shall be liable to pay by way of simple interest, in addition to the amount of such tax, a sum equal to two per cent of the amount of such tax, for each month or for part thereof after the last date by which he should have paid such tax.
(b) If any tax, other than the tax on which interest is leviable under clause (a), is found due from a dealer or a person in respect of any period as a result of an order of assessment passed under the Act in his case, then such dealer or person shall be liable to pay by way of simple interest, a sum equal to two per cent of such tax, for each month or for part thereof from the first date after the end of the period for which the dealer or person has been so assessed, till the date of such order of assessment. If, as a result of any order passed under this Act, the amount of tax found due is enhanced or reduced, as the case may be, interest shall be enhanced or reduced accordingly.
………………..”
By the above amendment, the provision for penalty was deleted and new provision was made for levy of simple interest at the specified rate for the period of default. We are not concerned in the present case with the post-1987 sub-section (3). It will be useful for a limited purpose to appreciate the contention of the counsel for the assessee that “for each month” appearing in sub-section (3), as it stood at the material time, should be read as “each complete month” because in the newly inserted sub-section (3) the Legislature itself has used the expression “for each month or part thereof …….” The submission of the counsel, in other words, is that from the use of expression “for each month or part thereof” in sub-section (3) as introduced by the Maharashtra Act 22 of 1988 with effect from April 21, 1987, it should be inferred that the expression “each month” appearing in sub-section (3) meant “each complete month” and no penalty could be levied for default for a part of a month.
5. On careful consideration of the submission of the learned counsel, we find it difficult to accept the same, particularly, in view of the fact that the expression used in sub-section (3) as originally enacted was for “each complete month” which was substituted with effect from September 1, 1969, by the expression “for each month”. The legislative intent behind substitution of the expression for “each complete month” by the expression “each month” is clear and unambiguous. The Legislature did not intend to keep the penalty restricted to defaults for a complete month only. It, therefore, deleted the word “complete” and substituted the words “each complete month” by the words “each month”. As a result, penalty of a sum equal to the specified percentage of the amount of tax for each month became leviable. The rate of penalty is specified as a percentage of the amount of tax for each month. Reference to month is in contradistinction to “quarter”, “half-year”, or “year”, etc. It does not and cannot mean that it can be levied only for “a complete month “. If a dealer commits default in paying tax within the prescribed time, he would be liable to penalty. For first three months, the rate is lower than the rate applicable for default beyond that period. That was the position before September 1, 1969, when the expression used in clauses (a) and (b) was “for each complete month”. The law was changed thereafter and the expression “for each complete month” was substituted by the expression “for each month”. The purpose of the above amendment has been explained in note (f) of the Statement of Objects and Reasons appended to the Bombay sales Tax (Amendment) Bill, 1969, which was enacted as Maharashtra Act 40 of 1969, as follows :
“……… The rate of penalty has been specified at present in terms of a complete month. It is proposed to substitute the expression complete month by the word month ……..”
Despite such clear position of law, to construe the expression “each month” as “each complete month” would amount to rendering the amendment made by the Legislature with the specific object of changing the existing position, nugatory which is not permissible mode of interpretation.
6. We are, therefore, of the clear opinion that for “each month” does not mean for “each complete month”. So far as the use of the expression “for each month or part thereof” in sub-section (3), as substituted from April 21, 1987, is concerned, we find that the substituted sub-section (3) no more deals with penalty, it provides for levy of interest. It is in that context that the Legislature, with a view to remove all disputes in regard to interpretation, used a different expression, which is explicit.
7. In view of the above, we answer the question referred to us in the affirmative and in favour of the Revenue.
8. In the facts and circumstances of the case, we make no order as to costs.
Reference answered in the affirmative.