FERTILIZER CORPORATION OF INDIA LTD. versus STATE OF BIHAR

Citation: [1988] 2 S.C.R. 148 · Decided: 04-12-1987 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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FERTILIZER CORPORATION OF INDIA LTD. 
v. 
STATE OF BIHAR 
""' 
DECEMBER 4, 1987 
ll 
[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] 
Bihar Sales Tax Act, 1959: ss. 14, 15 & 20-Rebate-Belated 
returns-Provisions for extension of time not availed of-Returns 
otherwise accepted-Penal provision for delay not invoked-Tax 1
deposited within time-Assessee whether entitled to rebate. 
c 
Interpretation of Statutes: Procedural provision-Interpretation 
of-Can be construed liberally so long as the principal object is not 
frustrated. 
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Section 14(1) of the Bihar Sales Tax Act, 1959 requires dealers to 
I) furnish returns within such period and to such authority as may be 
prescribed. Rule 10(2) of the Bihar Sales Tax Rules, 1959 requires the 
assessee to file quarterly returns within one calendar month of the 
expiry of the period to which they relate. Sub-section (3) of s. 14 
provides for extension of time for submission of the return. Sub· 
section (2) of s. 20 requires dealers to pay into the Government 
f;: 
Treasury the full amount of tax due and furnish a receipt along with 
the return. Section 15 entitles the assessee to rebate in tax on returns 
furnished under sub-s. (I) of s. 14 or within extended period. The 
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proviso to sub-s. (2) of s. 20 entitles a dealer to deduct from the 
... 
amount of tax due from him any amount which may be admissible as 
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rebate under the provisions of s. 15. 
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The assessee filed its quarterly returns under s. 14(1) of the Act 
late by a few days. There was no application made by it to the pres-
cribed authority for extension of time. The assessee, however, paid the . 
tax before the due date of the respective returns and availed Itself of 
the rebate by deducting the same while paying the tax due. 
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The Tribunal held that as the assessee did not file its returns 
within the prescribed period and had sought no extension, it was not 
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entitled to the rebate. The High Court upheld the view taken by the 
Tribunal. 
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Allowing the appeal, 
148 
) r 
FERIBJZER CORPN. v. STATE OF BIHAR 
149 
HELD: 1. The assessee was entitled to the rebate of tax provi-
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ded for ins. 15 of the Bihar Sales Tax Act, 1959. [156B) 
2. The condition in s. IS referring to a return has a substantive 
as well as procedural content. The latter should be construed 
somewhat liberally and generously so long as the principal object of B 
the provision is not frustrated. [ tSSH; t56A) 
C./. T. v. Kulu Valley Transport Co. Pvt. Ltd., [1970) 77 I.T.R. 
518; Gursahai Saigal v .. C.I.T. (1963) 48 I.T.R. S.C. I; Allen v. 
Trehearne. [1938] 22 T.C. 15 and C.J. T. v. Mahaliram Ramjidas, 
[1940] 8 I.T.R. 442. referred to. 
3.1 The object of s. 15 of the Act is to confer a benefit on an 
assessee for prompt payment of the tax. In the instant case, the 
assessee had paid the tax before the due dates. The tax paid accords 
with the tax due on the basis of returns. There was short delay only in 
the filing of the returns. I 153D-E) 
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y 
3.2 The Act does not set out any particular procedure for 
obtaining extention of time. It does not prescribe any form of appli-
cation. It does not require that the prescribed authority must pass an 
order recording his satisfaction that the time should be extended and 
granting time. it envisages three consequences to the assessee for 
failure to file a return within the prescribed time, or extended time: (i) 
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loss of rebate under s. 15, (ii) risk of a penalty under s. 14(4), and (iii) 
risk of a best judgment assessment under s. 16(4). I 154A-D I 
3.3 In the instant case the assessing authority has neither levied 
a penalty nor made a best judgment assessment nor recorded a finding 
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that the delay was without reasonable cause. From these circum-
stances it is reasonable to infer that the returns, though filed bela-
tedly, have been accepted and acted upon by the prescribed authority, 
An extention of time can thus be inferred from the attendant circum-
stances of the case. I t54D-F) 
3.4 The condition precedent for the grant of rebate that the G 
assessee should have filed its return within the prescribed or extended 
petjod, can, therefore, be said to have been fulfilled in the present 
case. ll53H; 154A) 
Jamuna Floor & Oil Mills Pvt. Ltd. v. State of Bihar, [1968] 22 
S.T.C.1, approved. 
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150 
SUPREME COURT REPORTS 
[1988] 2 S.C.R. 
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CIVIL APPELLA1E JURISDICTION: Civil Appeal Nos. 
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p 
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f 
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948-950 of 1975. 
From the Judgment and Order dated 12.9.19
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