TMI Blog1997 (5) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... company adjusted the excess amount of tax paid in earlier year with tax payable according to those monthly returns and wrote letters to the assessing officer intimating that fact. By letter dated March 13, 1989 in respect of the return for January, 1989 the applicant-company wrote to Commercial Tax Officer (henceforth referred to as the CTO ) of Central Section (A/W) as under: The sales tax amount including turnover tax comes to Rs. 1,10,96,215.31. It should be mentioned here that an amount of Rs. 1,51,36,344.30 (sales tax Rs. 1,18,64,646.02 and turnover tax Rs. 32,71,698.28) has been deposited excess as mentioned in our West Bengal sales tax return for the month of December, 1988. As such, the balance excess deposited amount of Rs. 40,40,128.99 (sales tax Rs. 37,94,671.25 and turnover tax Rs. 2,45,457.74) will be adjusted in our subsequent returns. Similarly, while submitting the return for February, 1989 the applicant wrote letter dated April 7, 1989 to the CTO that the amount of tax payable being Rs. 11,58,731.13, when deducted from the aforesaid excess payment of Rs. 40,40,128.99, the balance excess amount would remain at Rs. 28,81,397.86, and that amount would be adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted the fact that there was an order for refund of Rs. 71,00,000 (obviously it was an approximate figure) in respect of year 1986-87. Accordingly, he disposed of the appeal by setting aside the determination of interest by CTO and directing .......assessing authority to make a fresh determination of interest taking into account the amount of sales tax and turnover tax as admittedly payable by the applicant as per its returns submitted, mentioning specifically the period during which such interest accrued in terms of section 8A of the West Bengal Sales Tax Act, 1954....... but while disposing of that appeal, respondent No. 2 rejected the contention of the applicant that excess amounts paid as tax in earlier years might be adjusted with tax payable according to the returns for the impugned months of January, February and March, 1989. He held that levy of penal interest for late payment of admitted tax was automatic and by operation of law. 3.. Thereafter the applicant preferred a statutory revision against the order of respondent No. 2 before respondent No. 4, the West Bengal Commercial Taxes Appellate and Revisional Board (in short, the Board ), which was formerly known as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 986-87. A sum of Rs. 40,00,000 paid by the applicant for the year 1981-82 was adjusted against the demand for the period of twelve months ending March 31, 1982 by order dated December 5, 1996. The applicant s affidavit-in-reply does not make any new case. 5.. The only dispute in this case is regarding liability to pay interest on taxes not paid at the time of submitting returns. Applicant has not challenged the vires of the relevant provisions of Act of 1954 and the relevant Rules framed under the Act. Every registered dealer is obliged to submit returns of turnover and specified purchase price in the prescribed manner and by prescribed dates under section 8(1). Sub-section (2) of section 8 is extracted below: The dealer shall, before submitting any return of turnover and specified purchase price referred to in sub-section (1), pay into a Government treasury or the Reserve Bank of India the amount of tax due under this Act according to such return and furnish along with the return a receipt from such treasury or bank showing payment of such amount. Rule 21(1) of the West Bengal Sales Tax Rules, 1954 (hereinafter mentioned as the Rules of 1954 ) lays down that every registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to which the prescribed authority shall, in the prescribed manner refund to a dealer any amount of tax, penalty or interest paid by such dealer in excess of the amount due from him under Act of 1954, either by cash payment or by deduction or adjustment of such excess from the amount of tax, penalty or interest due in respect of other period. Rule 29(1) lays down the procedure of refund under section 11(1). It is as under: If the amount of tax, surcharge, additional surcharge and penalty assessed under rule 23 or 24 is lower than the amount already paid by the dealer for the same period and if there are any arrears of tax, surcharge, additional surcharge and penalty assessed under section 9 remaining due from him in respect of any other period, the prescribed authority or, where the powers conferred by section 9 on the prescribed authority are delegated under sub-section (3) of section 3 to any person, such person shall serve upon the dealer a notice in form VII notifying him of the adjustment of the amount of such excess towards such arrears. If there are no such arrears or if after such adjustment there is still an excess, the prescribed authority or such person, as the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of even that amount did not arise at the time the returns for the months of January, February and March, 1989 were filed. 9.. One of the contentions of Mr. Arun Mukherjee, learned advocate for the applicant, was that since no action was taken under section 8(3), the returns were accepted as valid and hence interest cannot be levied. Learned State Representative, appearing for the respondents, submitted that the returns were not accepted, as alleged. It will appear from annexure E , the appellate order dated February 23, 1995, that the assessment order dated March 24, 1993 for the period of twelve months ending March 31, 1989 (that includes the months of January, February and March, 1989) did not proceed on acceptance of the returns filed. Because, the assessing officer had enhanced the gross turnover from the returned figure of Rs. 31,84,38,565.14 to rupees 40 crores. Apart from that, the fact that an assessment was made under section 9 for the impugned period clearly indicates that the returns were found unsatisfactory. Clause (a) of subsection (2) of section 9 makes this position very clear, as quoted below: If the prescribed authority is not satisfied that the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged and admitted tax was not paid and receipt of such payment was not furnished along with returns, in our opinion, it was a clear case of non-payment of tax. Mr. Mukherjee contended that apart from Rs. 71,16,258 other amounts were also paid in excess during earlier years, but at the time of argument, he could not show any such excess payment of tax during earlier years. As already noted, the sum of Rs. 71,16,258 was quantified to have been paid in excess on June 27, 1991 long after the returns for the impugned months were filed. Hence, the question of adjustment of that amount (by way of refund) on the part of the applicant could not arise. Therefore, this contention of Mr. Mukherjee is also without substance. 12.. Mr. Mukherjee s another contention was that the tax was not paid under a bona fide belief that excess payment made earlier could be allowed to be adjusted. It is sufficient to say that this contention also is without substance, because there could be no such bona fide belief, when the action of the applicant was knowingly contrary to the statutory provisions already discussed. Learned State Representative, Mr. J.K. Goswami, rightly argued that there could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest by the Revenue at the rate of twelve per cent per annum if the refund was delayed for more than six months from the date of an order referred to in section 33-B. In Act of 1954 of West Bengal, there is no such provision in section 11. Mr. Mukherjee also referred to the case of Capital Packers v. Commissioner of Sales Tax [1989] 75 STC 42 (All.). That was a case under section 8(1) of the U.P. Sales Tax Act, 1948. Tax had not been paid on sales of corrugated sheets on the ground that the dealer was claiming it to be paper . Therefore, that case is clearly distinguishable. Lastly, Mr. Mukherjee, on behalf of the applicant, relied on the case of J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 (SC). That was also a different type of case. The dealer filed returns on the basis that the amount of freight charged in respect of sale of cement under the Cement Control Order did not form part of the sale price for the purpose of sales tax. Hence, that case cannot be applied to the facts of the instant case. 16.. The last contention of Mr. Mukherjee on behalf of the applicant was that the refund of Rs. 71,16,258 was quantified on June 27, 1991 but paid by R.P.O. on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellate authority in the order dated February 23, 1995 held that the applicant could not, on its own, adjust certain amounts claiming that those amounts had been paid in excess in earlier years. It was, therefore, liable to pay interest. The appellate authority also set aside the CTO s order of determination of interest mainly on the grounds that the order did not contain calculation of interest vis-a-vis the period or periods for which interest became payable, and it was not clear whether the CTO had taken into account the payments of tax on June 22, 1989 respectively for the months of February and March, 1989. Hence, direction was given to CTO to re-determine the interest payable by the applicant. In the revisional order dated August 27, 1996 the Board upheld the finding of the appellate authority and the revision was dismissed. While the revision was pending before the Board, the new assessing authority (respondent No. 1) re-determined the interest payable by the applicant as Rs. 1,54,55,195 by order dated July 6, 1995. That order is the subject of a different appeal before a Deputy Commissioner and it is now pending. There is a conditional stay of the fresh order of determ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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