TMI Blog1998 (12) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1997, O.P. No. 1083 of 1997, 1257 of 1998, T.P. Nos. 1754 of 1997, 1755 of 1997 and 1759 of 1997, 1769 of 1997, O.P. Nos. 81 to 84 of 1997, 1552 of 1997, 670 of 1996, T.P. No. 2299 of 1997, O.P. No. 392 of 1987, T.P. No. 3126 of 1997, O.P. Nos. 3131 of 1997, 3992 of 1997, 696 of 1997 and 3818 of 1997. 3.. In the following petitions the prayer is to quash the notice/order which levied 24(3) penal interest on additional tax/surcharge tax for belated payment or payment made by filing revised return before completion of final assessment or orders passed in revision justifying such orders: O.P. Nos. 2612 of 1997, 1766 of 1997, 1321 of 1997, 1269 of 1998, 340 of 1996, 1382 of 1996 and 3685 of 1997. 4.. In the following works contract assessees cases, the point of time from which penal interest under section 24(3) of the Act is leviable with reference to revised returns filed and payments made is questioned: O.P. Nos. 1723 to 1726 of 1997, 3946 of 1997 and 2326 of 1996. 5.. In the following cases, the plea is that refund due to the petitioner has not been adjusted properly and hence the penal interest levied under section 24(3) of the Act has to be cancelled: T.P. No. 126 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 1990-91 the relevant dates are as follows: Apart from paying clause 3 price as and when sugarcane is delivered, the petitioner pays State advice price also over and above the clause 3 statutory price and shows the payment in accounts as advance against clause 5-A . In [1988] 71 STC 444 (Mad.) (Thiru Arooran Sugars Ltd. v. Deputy Commercial Tax Officer) it was held that sugar mill is liable to pay purchase tax only on the statutory price fixed under clause 5A of the Control Order and this is confirmed by the Supreme Court in the case of State of Tamil Nadu v. Kothari Sugars Chemicals Ltd. [1996] 101 STC 197. Thus, the petitioner is liable to pay purchase tax on clause 5A price as and when price is fixed by the Director of Sugar. While submitting monthly returns the petitioner paid tax on clause 3 price and did not pay any tax on advance paid. As and when clause 5A price is fixed, on adjusting from advance account the amount payable under clause 5A, the petitioner paid tax promptly within a month by filing revised return. However, the penal interest under section 24(3) of the Act was levied as if tax on clause 5A turnover was due from the date of filing origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h were covered by an independent contract. Subsequently, on the basis of a decision by the members of South Indian Sugar Mills Association taken on September 12, 1995 supplementary return was filed on September 13, 1995 and tax on subsidy element was paid under protest without prejudice to the stand of the petitioner to claim exemption at the time of assessment. On September 18, 1995 the assessing officer called for monthwise details within seven days, failing which its entire turnover will be construed as having taken place in the beginning of April month itself. On October 30, 1995 again the assessing officer informed that the details called for have not been received and that interest will be calculated as per the findings in the notice dated September 18, 1995. The petitioner on November 8, 1995 sought time till December 15, 1995 to furnish details pertaining to the year 1990-91. On November 14, 1995 the petitioner filed writ petition challenging the tax on subsidies. On November 23, 1995 the assessing officer issued a demand notice for penal interest for the period from May 20, 1990 to September 13, 1995 adopting his own calculation on interest. The petitioner sent a lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed but interest had to be paid only for the period subsequent to determination of sales tax under the final assessment after the expiry of the period allowed under the notice of demand. In that case payment of tax on freight charges was paid on August 20, 1978 though the High Court rendered the judgment on September 10, 1976. In the present case of the petitioner tax payment under protest was made on September 13, 1995, though the High Court decided the issue on July 24, 1996. Whether price amount includes subsidies is a highly disputable issue as in the case of freight charges . In Calcutta Jute Manufacturing Co. v. Commercial Tax Officer [1997] 106 STC 433 the apex Court at page 441 observed as follows: It was a highly debated dispute whether price amount would envelope the freight charges paid by the dealer and until the controversy was resolved by the court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 (SC); (1978) 4 SCC 271 the dealers were justified in excluding the freight charges from sale price. It was for that reason the Constitution Bench refrained from mulcting the tax-payer with liability to pay interest additionally. Therefore, in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. On April 29, 1992, stay in writ petition filed in W.P. No. 6240 of 1992 was granted, Act 25 of 1993 was enacted on March 12, 1993 with retrospective effect from April 1, 1986 to overcome the legal infirmity pointed out in Larson and Toubro Limited case in [1993] 88 STC 289 (Mad.). Assessment for 1991-92 was completed on August 13, 1993 except section 3-A turnover in view of W.M.P. No. 8901 of 1992 dated April 29, 1992 and excess tax paid to the extent of Rs. 41,01,423 was refunded. The above excess payment was adjusted towards tax for July, 1993 due in August, 1993. On December 22, 1994 in view of Act 25 of 1993, the writ petitions were dismissed. On September 20, 1995 the petitioner deposited Rs. 10.95 lakhs towards taxes on section 3-A turnover. However, on February 24, 1997 the assessing authority levied penal interest calculating from April 20, 1992 to September 20, 1995. Objections were filed on March 21, 1997 stating assessment has not been completed, original assessment on August 31, 1993 showed refund due and return filed claiming non-liability as per stay order of court. On March 21, 1997 lease rental assessment, under section 3-A was completed. As the tax was paid on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urns 1994-95, the petitioner did not admit the liability based on promise held out by Government and head of the department, but clearly reported that the petitioner was eligible for deferral on such amounts. No provisional assessment was made raising statutory demands. In a similar case in O.P. No. 25 of 1996 dated March 18, 1996 [Amarjothi Spinning Mills Limited v. Deputy Commercial Tax Officer [1996] 102 STC 16 (TNTST)] the levy of penal interest has been quashed. Therefore, the penal interest levied on January 28, 1997 is to be cancelled. In J.K. Synthetics Ltd. s case [1994] 94 STC 422 (SC), it has been held that provision to be made for levy of interest in tax laws is to be construed as substantive law and not a machinery provision. It was held that penal interest could be levied on final assessment only and the assessee cannot be expected to predict future events for sake of avoiding penal interest. In the case reported in [1997] 104 STC 362 [FB] (United Riceland Limited v. State of Haryana), the Punjab and Haryana High Court held that penal interest could be levied only if it is shown that the assessee attempted to contravene the provisions of the Act with the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity regarding penal interest as held in the case of Amarjothi Spinning Mills Limited v. Deputy Commercial Tax Officer [1996] 102 STC 16 (TNTST). As taxes were paid before final assessment there is no liability regarding penal interest. In any event, the machinery provisions were struck down on December 23, 1992. Though for tax purpose retrospective effect can be given from June 26, 1986, for penal liability there is only prospective effect. Thus, in any event penal interest charged prior to March 12, 1993 is illegal. As reported in [1961] 12 STC 182 (SC) (Commissioner of Sales Tax v. Modi Sugar Mills Ltd.) a legal fiction must be limited to the purposes for which it has been created and cannot be extended beyond its legitimate field. As has been held in J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 (SC) the due date for liability to levy penal interest arises only on completion of final assessment. When voluntarily revised returns were filed and taxes paid before final assessment no penalty arises following the ratio of the decision in State of Tamil Nadu v. K. Balasubramanian [1996] 100 STC 226 (Mad.). Hence, the orders imposing penal interest may be set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutory obligation has been fully complied with. In O.P. No. 2612 of 1997 additional tax was paid at 2 per cent every month. In January, 1995 owing to increased turnover the rate of tax charged to 2.25 per cent and this position was realised only in March 1996 and immediately the differential tax was paid on March 15, 1996. Thus, the payment was made before final assessment. In O.P. No. 340 of 1996, the final assessment was completed on October 15, 1993 and immediately the additional tax was paid. No provisional assessment was made as contemplated in rule 4 of Additional Tax Rules when turnover exceeded Rs. 10 lakhs. Thus, the levy, which was declined to be entertained by the suo motu authority, has to be set aside. In O.P. No. 1083 of 1997, the petitioner claimed exemption on sales of skimmed milk powder and butter in the monthly returns but the petitioner was compelled to pay taxes on this turnover. In the order of assessment claim of exemption was rejected. No provisional assessment was made earlier. However, penal interest was levied for belated payment of taxes though the taxes were paid before final assessment. Hence, the levy is to be cancelled. 18.. Thiru V. Sundareswara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercial Tax Officer (CT) IV, Central Assessment Circle III, Madras [1982] 50 STC 141 (Mad.). The claim to refund is independent of the petitioners liability to pay interest under section 24(3) of the Act and the petitioner cannot claim adjustment of the refund against the tax to be paid by him as held in Apollo Tubes Limited v. Additional Deputy Commercial Tax Officer, Ranipet [1994] 93 STC 339 (Mad.). The same view is expressed in Garden Reach Ship Builders Engineers Ltd. v. Assistant Commissioner, Commercial Taxes [1998] 110 STC 87 (WBTT). Personal difficulties or inconvenience to pay tax in time is no excuse. The validity of section 24(3) of the Act is not questioned before this Special Tribunal. Levy of penal interest arises automatically from the date by which the tax was required to be paid as held in Bumpy Udyog v. Commercial Taxes Officer [1997] 106 STC 105 (RTT). In view of section 2(1)(b) of Tamil Nadu Additional Sales Tax Act read with rule 4(2) and rule 5 of Tamil Nadu Additional Sales Tax Rules, 1970, there is authority to collect penal interest on belated payment of additional tax and the decision reported in Golden Leathers v. Deputy Commercial Tax Officer [1995] 98 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevance at all. In the affidavit in O.P. No. 76 of 1997 it was stated that the supplementary return was filed to avoid the harsh provisions of section 12(3) introduced during 1993. In such circumstances, the plea of bona fide has no relevance and penal interest cannot be withheld even for a bona fide mistake as considered in the case reported in Godrej Boyce Manufacturing Co. Ltd. v. Joint Commissioner of Commercial Taxes-IV [1995] 97 STC 44 (Mad.). Thus, levy of penal interest even in case where revised return is filed and tax paid prior to finalisation of assessment is quite in order. 23.. Thiru C. Natarajan, learned Senior Counsel, while replying to the arguments of the Government advocate reiterated that liability to pay tax arises only after the clause 5A price is declared by the Director of Sugars and the petitioner from the year 1979 onwards has been giving advance against 5-A price and such advance amount cannot be treated as price in terms of the decision reported in Thiru Arooran Sugars Ltd. v. Deputy Commercial Tax Officer [1988] 71 STC 444 (Mad.). The issue pertaining to subsidy was really a highly debatable issue and only in such circumstances a Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ....... 25.. Section 13(1) contemplates payment of tax in equated instalments with reference to estimated turnover in a return filed under rule 9 and tax determined under rule 10 or 11 as contemplated in rule 13 of the Rules on commencement of business or under rule 15 with reference to annual return filed on or before 1st May in every year. The assessee who pays provisional tax in equated monthly instalments as per notice in form B served on him is called a rule 15 assessee. None of the petitioners before us is a rule 15 assessee and hence this section 13(1) and Rules thereunder are not relevant to us. 26.. An assessee who pays tax under section 13(2) is called a rule 18 assessee and the relevant part of rule 18 are sub-rules (2), (3), (4) and (6) and they read as under: Rule 18(2). Subject to the provisions of sub-rule (5), the dealer shall submit a return in form A-1 showing the total and taxable turnover for each month and the amount or amounts actually collected by him by way of tax or taxes during that month. The return for each month shall be submitted so as to reach the assessing authority on or before the 20th of the succeeding month. Along with the return, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that if no return or returns have been submitted by the dealer as required by sub-rule (2), or if any return or returns submitted by him appear to the assessing authority to be incorrect or incomplete, the assessing authority shall, after making such enquiry as he considers necessary, and after giving the dealer notice as prescribed in rule 12, determine the turnover to the best of his judgment and finally assess under a single order the tax or taxes payable under section 3, 3-A, 3-B or 4. 27.. Thus, as assessee who opts for payment of tax every month by filing monthly returns showing actual turnover under section 13(2) of the Act, should file the return for each month on or before 20th of succeeding month and submit proof as specified in sub-rule (1) of rule 55 for payment of the full amount of tax or taxes on or before 20th of the month to which the return relates after deducting therefrom amount if any claimed as refund due in the month under rule 23. The adjustment of refund as contemplated in rule 23 relates to reimbursement or refund of tax paid in certain cases as contemplated in sections 4-A to 4-E of the Act. 28.. The tax payable under sub-section (2) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is set aside in appeal or revision and fresh assessment is made on remand. Thus, the situations for tax liability for a rule 18 assessee may be summarised as follows: Situation Date on which tax liability accrues. (a) Monthly return filed 20th of the month in which the return is due. (b) No return filed and best judgment provisional assessment made. On expiry of 30 days from the date of service of demand notice. (c) Best judgment provisional assessment made with reference to incorrect or incomplete return. On expiry of 30 days from the date of service of demand notice. (d) Original return filed after expiry of prescribed period or supplementary or revised return filed but before best judgment provisional or final assessment. (If it is provisional best judgment assessment it is one made after 10 days of the date prescribed for filing return.) From the 20th of the month to which the return relates. (e) Final assessment On expiry of 30 days from the date of service of demand notice. Once final assessment order is served, the liability to pay penal interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed return within ten days after the expiry of the prescribed period, he shall also pay, in addition to the amount of tax due as per his return, interest at two per cent of the tax payable for every month or part thereof. Section 24(4): Where the tax paid under this Act is found to be in excess on final assessment or revision of assessment, or as a result of an order passed in appeal, revision or review, the excess amount shall be refunded to the dealer after adjustment of arrears of tax, if any, due from him. Where the excess amount is not refunded to the dealer within a period of ninety days from the date of the order of assessment or revision of assessment or order passed in appeal, revision or review, the Government shall pay by way of interest, where the amount refundable is not less than one hundred rupees, a sum equal to a sum calculated at the rate of one per cent or part thereof or such amount for each month or part thereof after the expiry of the said period of ninety days. 32.. Thus, according to sub-section (1) of section 24, an assessee who opted to pay tax by filing monthly return is liable to pay without any notice of demand. Where the tax is assessed to best jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of order of assessment or revision of assessment, etc. 36.. Before considering the case laws cited and facts of the cases, we shall examine whether there are adequate provisions to levy penal interest for belated payment of additional sales tax and surcharge and the implications of the judgment of the Madras High Court in the case of Larsen and Toubro Limited v. State of Tamil Nadu [1993] 88 STC 289 which struck down rules 6-A and 6-B of the Rules and the scope of retrospective legislation by Act 25 of 1993 as regards liability of civil contractors. 37.. Levy of additional sales tax as well as surcharge is by operation of law. The material provisions are extracted below: Additional Sales Tax Act, 1970.- Section 2(1)(b)-The provisions of the said Act shall apply in relation to the additional tax payable under clause (a) as they apply in relation to the tax payable under the said Act. Rules 4(2), 4(3), 5, 7 and 9 read as follows: Rule 4(2): Every dealer, whose taxable turnover under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), exceeded rupees ten lakhs in the previous year and who has opted to pay tax on the basis of his monthly returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al tax is found to be due from the dealer, the assessing authority shall serve upon the dealer a notice in form N7 and the dealer shall pay the additional tax demanded at the time and in the manner specified in the notice. Rule 9: Savings.-Save as otherwise expressly provided for in these Rules, the provisions of the Tamil Nadu General Sales Tax Rules, 1959 shall apply, mutatis mutandis, to the additional tax leviable under section 2 of the Act. Section 3(2) and section 3-A(2) of the Tamil Nadu Sales Tax (Surcharge) Act, 1971 read as follows: Section 3(2): Save as otherwise provided in this Act, the provisions of the said Act shall apply in relation to the surcharge payable under sub-section (1) as they apply in relation to the tax payable under the said Act. Section 3-A(2): Save as otherwise provided in this Act, the provisions of the said Act shall apply in relation to the additional surcharge payable under subsection (1) as they apply in relation to the tax payable under the said Act. Rules 4(3), 5, 7 and 8 read as follows: Rule 4(3): In lieu of the method of assessment described in sub-rule (1), a dealer liable to pay surcharge under section 3 of the Act and whose t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a notice in form X and the dealer shall pay the surcharge demanded at the time and in the manner specified in the notice. Rule 8: Savings.-Save as otherwise expressly provided for in these Rules, the provisions of the Tamil Nadu General Sales Tax Rules, 1959, and the Tamil Nadu Sales of Motor Spirit Taxation Rules, 1939, shall apply, mutatis mutandis, to the surcharge leviable under sections 3 and 4 respectively of the Act. 38.. From the above provisions of Act and Rules quoted, it is quite clear that levy of additional sales tax as well as surcharge is by operation of law and it is corollary to the tax payable under the principal Act. The words said Act occurring in section 2(1)(b) of the Tamil Nadu Additional Sales Tax Act, 1970 and in section 3(2) and section 3-A(2) of the Tamil Nadu Sales Tax (Surcharge) Act, 1971 refer to the Tamil Nadu General Sales Tax Act, 1959. Thus, for any default in payment of additional sales tax or surcharge, the dealer is liable to penal interest as contemplated under section 24(3) of the principal Act. 39.. The decision of the apex Court rendered in India Carbon Ltd. v. State of Assam [1997] 106 STC 460 in the context of levy of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-B by appropriate legislation, including subordinate legislation in accordance with the principles and dicta laid down by the Supreme Court of India in the decisions in (i) Gannon Dunkerley and Co. v. State of Rajasthan [1993] 88 STC 204; (1992) 2 MTCR 474 and (ii) Builders Association of India v. State of Karnataka [1993] 88 STC 248; (1992) 2 MTCR 542. (f) Nothing in this order shall affect the right of the Revenue to initiate or continue or pursue and proceed to decide or pass orders or assess and recover the tax due as and when the law is validly made and in accordance with law; and (g) These writ petitions, shall stand ordered and finally disposed of in the above terms. 41.. As could be seen from the above findings, only the orders passed and any action initiated on the basis of rules 6-A and 6-B have been held invalid in law. Otherwise, the liability of the dealers to pay tax has not been altered and after making valid law by removing the infirmity the Revenue was authorized to collect taxes in accordance with law. Thus, Act 25 of 1993 was enacted on March 25, 1993 with retrospective effect from June 26, 1986 by removing the deficiencies pointed out in the decision re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, without any contractual or statutory basis fixing the sale price of sugarcane at an amount higher than the minimum cane price fixed under clause 3 and the additional cane price fixed under clause 5A, any sum paid by the purchaser to the grower as advance prior to fixation of the additional cane price under clause 5A cannot form part of the price of cane sugar. In these matters there is admittedly no statutory basis since the State advice to the purchasers to pay a certain amount in addition to the minimum cane price fixed under clause 3, in anticipation of fixation of the additional cane price under clause 5A, does not have any statutory basis. The amount paid as advance under the State advice also does not have any contractual basis since this was not paid as a result of an agreement between the grower and the purchaser. The amount of advance was paid in anticipation of fixation of the additional cane price under clause 5A which means that in case the fixation under clause 5A was at a higher amount than the amount paid as advance then the purchaser would have to pay the deficit amount. Similarly, when the amount of advance was in excess, the purchaser would be entitled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under the cane development expenses cannot and does not affect the character of payment. It cannot be disputed that, while calculating the profits the payment of the sum of Rs. 1,59,305.48 has also been taken into account. The amount paid as subsidy is undoubtedly retained by the cane growers and it is over and above the price fixed by the Government as the price of the sugarcane. It is therefore relatable to the supply of sugarcane. Therefore there is an implicit agreement that the subsidy forms part of the price. There is one other way of looking at the entire picture. The total price received by the cane growers is equal to the price fixed under the statute plus subsidy amount which is retained by the cane grower. Therefore the sale price of the product cannot be less than or more than the above price received by the cane grower. Necessarily they have to be equal. It follows therefore that the sale price includes the subsidy payment and therefore rightly forms part of the purchase turnover. 46.. Thus, the principle what is the amount which is paid from one pocket to another towards the sale or purchase has to be considered, though such a principle was rejected in Thiru Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tta High Court and which finally ended up in upholding of its validity. Hence, there was no question of the assessee waiting for the determination and the turnover as there was no dispute on that aspect. The fact that appellants questioned the constitutional validity of the charging provision cannot be equated with a dispute whether the freight paid would also form part of the sale amount. It was a highly debated dispute whether price amount would envelope the freight charges paid by the dealer and until the controversy was resolved by the court in Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13 (SC); (1978) 4 SCC 271 the dealers were justified in excluding the freight charges from sale price. It was for that reason the Constitution Bench refrained from mulcting the tax-payer with liability to pay interest additionally. Appellants in these cases have never disputed that they are liable to pay tax on the turnover under section 6B of the Act even while they focussed on the vires of that provision. 48.. As the ultimate basis for the decision in J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 (SC) turned on the intrinsic interpretation of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of cement entered into by the assessee with them under the provisions of the Control Order. It is true and we are aware that there is no legal liability on the Central Government to do so, but it must be remembered that we are living in a democratic society governed by the rule of law and every Government which claims to be inspired by ethical and moral values must do what is fair and just to the citizen, regardless of legal technicalities. We hope and trust that the Central Government will not seek to defeat the legitimate claim of the assessee for reimbursement of sales tax on the amount of freight by adopting a legalistic attitude but will do what fairness and justice demand. After all, the motto of every civilized State must be: Let right be done . 49.. However, as we have seen earlier, subsidy issue was well-settled long before and it is not to be considered as a highly debated issue to bring it on par with the freight charges issue, notwithstanding the fact that a dispute raised subsequently was referred to a larger Bench for decision. 50. The decision in Calcutta Jute Manufacturing Co. s case [1997] 106 STC 433 (SC) is very important in the context of penal int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le thereon in the return filed by them. If that be so the consequence is that they have failed to furnish a return which is referred to in section 10 . The corollary is that there was failure to furnish the return as envisaged in sub-section (2). Thus, the liability to pay interest commenced under that subsection at the very moment the assessing authority made the assessment under section 11. Interest thereon would start accruing from the date prescribed for furnishing the correct return in accordance with section 10. 52.. It is useful at this stage to refer to the observations in the case of Godrej Boyce Manufacturing Co. Ltd. v. Joint Commissioner of Commercial Taxes [1995] 97 STC 44 wherein the Madras High Court considered the case of a dealer who filed the return for the month of December, 1991 by omitting a certain turnover by mistake but rectifying the same on February 19, 1992 by filing a revised return and paying the difference in tax. At pp. 52-54, after analyzing the decision in J.K. Synthetics Ltd. s case [1994] 94 STC 422 (SC) and comparing with provisions of the Tamil Nadu General Sales Tax Act, the following observations were made: Now, let us consider whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be paid only for the period subsequent to the determination of sales tax under the final assessment after the expiry of the period allowed under the notice of demand. However, that is not the position under the provisions contained in sections 13(2), 24(1) and 24(3) of the Tamil Nadu Act read with rule 18(2) of the Rules under the provisions of Tamil Nadu General Sales Tax Act referred to above. The liability to pay interest arises, the moment the dealer fails to pay the full amount of tax in respect of the actual turnover for a particular month on the due date, i.e., the 20th of the succeeding month, irrespective of the date of filing of the return and that such liability to pay the interest at 2 per cent per month for such amount of tax which remains unpaid after 20th of the succeeding month is automatic. As pointed out by the Division Bench of this Court in Apollo Tubes Limited v. Additional Deputy Commercial Tax Officer, Ranipet [1994] 93 STC 339; (1992) 2 MTCR 190, in such a case there need not be an order of assessment before interest is levied under section 24(3) of the Act. Section 24(3) does not refer to any assessment or any proceeding on behalf of the officers for purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 13(2), 24(1), 24(3) of the Act and rule 18(2) of the Rules and the admitted facts and circumstances present in this case, we have no hesitation in holding that, it is not open to the appellant to claim that only on the date of filing of the revised return on February 19, 1992, the differential tax becomes due and that inasmuch as the differential tax was paid on February 19, 1992 it is not liable to pay interest under section 24(3) of the Act. 53.. In page 2 of affidavit in O.P. No. 76 of 1997, in para 3 the petitioner stated that since the petitioners were advised that they had a fair case for nonpayment of tax, no purchase tax was paid during the period . 54.. In view of the discussions supra and especially in the light of the observations of the Division Bench of Madras High Court in Godrej Boyce Manufacturing Co. Ltd. v. Joint Commissioner of Commercial Taxes IV [1995] 97 STC 44 (Mad.) and Supreme Court in Calcutta Jute Manufacturing Co. v. Commercial Tax Officer [1997] 106 STC 433, we hold that subsides included in the revised returns filed belatedly attract levy of penal interest under section 24(3) of the Act. 55.. It is further seen that the assessing authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed. 58.. As we have held that Act 25 of 1993 is valid from June 26, 1986 to levy tax and penal interest in respect of works contract assessees, the prayers in O.P. Nos. 1723 of 1997 to 1726 of 1997 fail as the revised returns were filed and taxes paid belatedly before final assessment. Accordingly the petitions are dismissed. 59.. In T.P. Nos. 1754 of 1997 and 1755 of 1997 cheques deposited with monthly returns were dishonoured when presented for payment. Thereafter the petitioner paid the tax dues by tendering demand drafts. When cheques bounced such cases should be considered as filing of monthly returns without payment. T.P. No. 1759 of 1997 is a case of delayed payment of taxes. Thus, the action initiated to levy penal interest under section 24(3) of the Act is in order and accordingly the petitions are dismissed. 60.. Notwithstanding the initiation of revenue recovery proceedings for arrears of tax, the penal interest runs till the arrears are paid. Thus, action taken in T.P. No. 2703 of 1997 to demand penal interest after initiating Revenue Recovery proceedings is in order. Filing revised return and paying tax before final assessment in O.P. No. 1382 of 1996 also call ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: The least that the petitioner could expect is an order for refund of excess amount which is admitted to be due to the petitioner. So far as other two prayers are concerned they require investigation. Hence an interim order is made directing the respondent to pass orders on the request of the petitioner to refund the excess amount collected for the years 1991-92 and 1992-93 with interest . Further, there is nothing wrong in the refusal of the officer to adjust entry tax paid towards tax payable on spares sales. Thus, for the arrears of tax with reference to payment made towards surcharge and additional tax subsequently the calculation of penal interest is in order. In O.P. No. 1257 of 1998, there is delay in filing return as well as in making payment. The revision petition dismissed by the Joint Commissioner (RP) following the ratio of the decision in Godrej Boyce Manufacturing Co. Ltd. v. Joint Commissioner of Commercial Taxes IV [1995] 97 STC 44 (Mad.) is in order. In O.P. No. 1088 of 1997, taxes due as per supplementary returns remained unpaid on April 20, 1990. Thus, penal interest levied is in order. The plea that refund was due for the assessment year 1989-90 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt along with January 1997 taxes payable on or before February 20, 1997. Apparently the officer is wrong in construing that January 1992 deferral amount is payable on or before 20th of January 1997 by which time only the tax for December 1996 is due. However, it is seen that April 1992 tax was paid only on June 3, 1997 and so on as per 24(3) penal interest demand notice dated February 27, 1998. Therefore, the remedy available to the petitioner is to file revision petition before the Deputy Commissioner (CT). Thus reserving the right to prefer revision, this petition is dismissed. 70.. In T.P. No. 3126 of 1997, the plea is that the 24(3) penal interest worked out is erroneous and the date of payment of tax has not been considered properly. In that case the remedy lies in preferring revision petition. Thus, reserving the right of filing revision petition before the Deputy Commissioner (CT), this petition is dismissed. 71.. In O.P. No. 3131 of 1997 tax has been paid by filing revised consolidated return before final assessment. Thus, penal interest levied for belated payment of tax is in order and the petition is dismissed. 72.. In O.P. No. 3992 of 1997, before final assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by the revisional authority on November 26, 1997 regarding instalment payment and bank guarantee is not in order and accordingly the order is quashed and the petition is allowed. 78.. In O.P. Nos. 1798 of 1998 to 1800 of 1998, the common prayer is to refund the 24(3) penalty interest collected on section 3(4) turnover which is covered by IFST deferral scheme. The petitioners have alternative remedy by filing revision petitions. Thus, reserving the right to prefer revision petitions, these petitions are dismissed. 79.. In O.P. No. 419 of 1997, dispute has been raised in respect of 12(3)(b) penalty and 24(3) penalty. As regards 12(3)(b) penalty the Appellate Assistant Commissioner (CT), Cuddalore in A.P. No. 575 of 1996 dated October 29, 1996 has dismissed the claim. As regards 24(3) penalty he has not entertained it. In such circumstances, the remedy against 24(3) penalty lies in preferring revision petition. Thus, this petition is dismissed, reserving the right of filing revision petition. 80.. In O.P. No. 671 of 1997, though the tax relating to REP licence premium was paid before final assessment, the turnover in question was not disclosed in the return. The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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