SALES TAX CIRCULAR NO. 4 OF 1994,

DATE 14^th APRIL , 1994

SUBJECT:--   LEVY OF ADDITIONAL TAX ON CASE FALLING UNDER SECTION 11 AND SECTION 36 OF THE SALES TAX ACT,1990.

                A question has arise regarding the date and time of calculation the additional tax in case where tax due under section 6 is not paid in the due date or return is not filed or in-correct return is filed and assessment order is passed under section 11 of the Sales Tax Act, 1990.

2.     The question has been examined in consultation with the justice Division and necessary directions are being issued through this circular.

3.      Section 6 of the Sales Tax Act lays the time and manner for the payment of tax. Under section 11, if a registered person does not file return or the amount of tax shown as payable in the return is not correct, appropriate officer of Sales Tax Department makes an assessment of the tax which the registered person is required to pay within the specified time. Under section 34, if a registered person fails to pay the tax within the time specified in section 6, he shall, in addition to tax due, be liable to pay additional tax and surcharge at the rate specified in section 34.

4.      The provisions of section 6, 11 and 34 read together lead to the conclusion that if tax is not paid on the due date, the additional tax starts accumulating and whenever an assessment of tax is made under section 11, the period of default is to be calculated from the date when the tax was originally due and should have been deposited and not from the of assessment order under section 11. Section 11 lays down the date by which the original tax and additional tax etc. due under section 34 is to be deposited.

5.      Regarding case falling under section 36, it is pointed out that additional tax is in the nature of a charge payable by the tax payer who fails to deposit the tax within the specified time, Section 36 does not exclude application of section 34 in case which fall in the scope of section 36.

6.      Filed formations may take further action in the light of this ruling.

Mr. Akhtar Ali

Secretary (STP)