TMI Blog2003 (2) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1998-99, the assessee filed returns disclosing the rate of tax on cattle feeds only at the rate of 3 percent, whereas, the rate of tax for cattle feeds was fixed at 4 per cent, with effect from April 1, 1998, as per the Finance Act, 1998. The assessing authority did not object to the same until the final assessment for the year 1998-99 is completed as per order dated April 3, 2001. In the assessment order, the assessing authority has levied interest of Rs. 9,926. Being aggrieved by the said levy, the assessee filed an appeal before the Appellate Assistant Commissioner, Commercial Taxes, Kannur, who by his order dated November 13, 2001 (annexure-B), allowed the appeal in that respect. However, in appeal filed by the State, the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court also referred to the provisions of Rule 21(7A) of the KGST Rules, and observed that, no doubt the said rule casts an obligation on an assessee to file monthly return disclosing the total turnover and taxable turnover accompanied by proof of payment of the amount of tax within a specified time. It was also noted that, in that case, the assessee did not file the return, and observed that the failure to file return of taxable turnover may render the assessee liable for any other consequences or penal action as provided by law, but cannot attract the liability for payment of penal interest under sub-section (3) of section 23 of the Act, on the parity of reasoning that if a return of turnover would have been filed on the due date then t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to the present case also. 5.. In the instant case, as we have already noted, the assessee had filed the return, but showed the rate of tax only at 3 per cent. This is the self-assessment made by the assessee. If the same is not acceptable to the assessing authority, he could have invoked the provisions of rule 21(9) of the Rules, passed an order and could have raised the demand of the tax due. In such circumstances, it is only when the assessee fails to remit the tax so demanded within the time stipulated therein, the liability to penal interest arises. In the present case, the order of assessment has been issued only on April 3, 2001. Consequently the liability to pay penal interest arises only on default of payment of any tax due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had shown the rate of tax at 3 per cent as against 4 per cent due. Such a situation does not come within the ambit of sub-section (3A). As such there is no question of application of sub-section (3A) warranting levy of interest under sub-section (3) of section 23 from the date of return filed. For all these reasons, we are of the view that the Tribunal was not justified in sustaining the levy of interest in the assessment order. We accordingly set aside the orders of the appellate authorities on this point and direct the assessing authority to modify the assessment deleting penal interest of Rs. 9,926 levied in the assessment order. The T.R.C. is allowed as above. Order on C.M.P. No. 4309 of 2002 in T.R.C. No. 249 of 2002 dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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