TMI Blog2018 (8) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... revisionist - the revisionist in fact has agitated its claim before the assessing authority by filing an application under Section 22 as such has disputed its liability from very inspection/binning. In this view of the matter, the same cannot be treated to be "admitted tax" or tax "admittedly payable" for the purpose of Section 8(1) of the Act. There was a bona fide dispute raised by the revisionist regarding liability for tax thereon, thus, it cannot be said to be its admitted taxable turnover and, therefore, there is no liability for payment of interest under Section 8(1) of the Act - The revision petitions are allowed and the assessing authority is directed to redetermine the interest in view of the provisions of Section 8(1-A) read with section 8(1-B) of the Act. Revision petition allowed by way of remand. - Sales/Trade Tax Revision No. 1596, 1592, 1593, 1594, 1595 of 2006 - - - Dated:- 8-8-2018 - Hon'ble Ashok Kumar, J. For the Applicant : Ajit Kumar Singh For the Opposite Party : S.C. ORDER Heard Sri Krishna Agrawal, learned counsel for the revisionist and Sri B.K. Pandey, learned standing counsel. These revisions are filed by the Union of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut four years from the end of the relevant assessment year there it is illegal. An application under Section 22 of the Act for rectification of the orders was created filed by the revisionist claiming that the interest is not chargeable as the liability of tax was not an admitted liability as such the demand of tax was disputed by the revisionist and it was even not accepted or admitted since beginning. Learned counsel for the revisionist has submitted that since the demand was quite belated and that the relevant provisions of Section 3-AAAA came into force on 17.4.1979 with retrospective effect from 1.4.1974 by U.P. Act 12 of 1979 therefore, the liability was not there in the relevant assessment years. However, the application filed by the revisionist under Section 22, was rejected by the assessing authority by an order dated 15.1.2001. Learned counsel for the revisionist has pointed out that a writ petition being Writ Petition No. 167 of 1989 was filed by the revisionist by which the assessment orders were challenged along with a prayer for mandamus directing the respondent department to refund the amount of purchase tax paid or realised from by the revisionist compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows : These rules clearly indicate that poppy grown by a cultivator remains his property till it is purchased by the Government in accordance with the Opium Act. Thus, in our view, the contention that there is complete embargo so far as the disposal of sale of poppy/opium by a cultivator is concerned and that the transaction between the petitioner and the poppy grower is not a sale, is misconceived. The cultivator is only required to dispose his produce in terms of the conditions of licence which he agreed to abide while taking licence and he can sell the produce of his cultivation in the form of poppy heads in terms of the licence to any one holding a licence to sell opium besides to the State Government or to nay one authorized by the State Government in that behalf, in lieu of which he gets the price of such produce. In this view of the matter, the phrase on account of in the Act cannot be interpreted to mean that the Central Government is the owner of the poppy and the cultivators are merely its agents. It was next argued that Article 285 of the Constitution exempts the property of the Union from all taxes imposed by the State or by any authority with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction on our part is necessary . It is admitted fact that the assessment orders were passed in the year 1979 on the return filed by the revisionist and in view of Section 9(4) of the Act (XV of 1948) it has attained the finality as the revisionist did not prefer any appeal against the order of assessment. Learned counsel for the revisionist therefore submitted that the issue is only finalised after the decision of the writ petition filed in the year 1989 decided on 21st January 2000, that there is liability of tax upon the revisionist and since the matter was bonafidely agitated by the revisionist no interest could legally be charged from it. In support of his submission learned counsel for the revisionist has placed reliance on a judgment of this Court in M/s Annapurna Biscuit Company vs. State and others reported in 1980 U.P.T.C. 1320. He has placed para 4 of the said judgment which contain, that the dealer may raise dispute about taxability or about rate, and then the question may arise what is tax payable under the Act, that the tax which is calculated or determined by dealer or that found to be due by assessing authority. In such cases it is the bona fide of assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of learned Single Judge in the case of M/s. Hashmatullah and Company, Bareilly vs. Commissioner of Sales Tax reported in 1995 U.P.T.C. 626. The relevant extract of the judgment is reproduced hereinbelow : Under the proviso to Section 3-AAAA as it stood at the relevant time no tax was leviable if it was proved to the satisfaction of the assessing authority that the goods so purchased had already been subjected to tax or may be subjected to tax under Section 3-AAA. Therefore, the admission or non-admission by the assessee is to be considered at the point of time when he furnished return and simply because by the time the assessment proceedings are taken the seller has not beer subjected to any tax it cannot be said that the dealer had wrongly denied its liability. It is only recently that Section 3-AAA has been amended by U.P. Ordinance No. 7 of 1994 with retrospective effect. Prior to that even purchases from unregistered dealers could not have been taxed if it could be established that they had been subjected to tax in the hands of those dealers. Relying on 1994 UPTC 893 (SC), held that the dealer having not admitted the liability to pay tax in respect of the purchases i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Commissioner of Sales Tax vs. Hindalco Industries Limited , 1999 UPTC page 1 that no interest can be charged on the turnover which has not been admitted by the dealer. It was held by Supreme Court that classification dispute is ordinarily resolved in assessment proceeding and if resolved against the assessee, the assessee has to make payment of differential amount of tax, as required by subsection (1-A) failing which provisions to Section (1-b) will apply. It may be noted here that interest at the lesser rate and for lesser period is payable under sub-section (1-A) and (1-B) of Section 8 of the Act. The interest is payable on the tax assessed under the Act and within 30 days of service of the notice of assessment and demand and not from the date of immediately following last date prescribed of deposit of admitted tax, as prescribed under Section 8(1) of the Act. 11. In view of the above discussion levy of interest under Section 8 (1) of the Act is not justified. However, the applicant would be liable to pay interest on the assessed tax in the light of sub-section (1-A) and (1-B) of Section 8 of the Act. In another case of M/s. Vijai Dall Mills, Kanpur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of interest could be demanded. He has further submitted that since beginning the revisionist has disputed its liability under the Act on the ground of not being a dealer, no purchase or sale of Opium is carried on, this property is not liable for taxation under the Constitution of India and there was no provision to leave any tax on purchase of Opium. According to the revisionist it is only when the writ petition filed in the year 1989 decided on 21.1.2000 was finally decided and thereafter the liability of revisionist has been crystallized. According to the learned counsel it was not at all admitted liability under the Act. Learned counsel for the revisionist has placed the provisions of Section 8(1) of Act which is reproduced hereinbelow : 8. Payment and recovery of tax.- (1) The tax admitted payable shall be deposited within the time prescribed or by 31st day of August, 1975, whichever is later, failing which simple interest at the rate of two percent per mensem shall become due and be payable on the unpaid amount with effect from the day immediately following the last date prescribed till the date of payment of such amount whichever is later, and nothing contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed standing counsel has also relied upon a decision of Hon'ble Supreme Court in the case of Commissioner of Sales Tax vs. Qureshi Crucible Centre reported in 1993 U.P.T.C. 901 in which the Hon'ble Supreme Court held that the tax admittedly payable means the tax which is payable inter alia according to the returned filed by the dealer. In the present case the return has been submitted by the dealer and on the basis of said returns the tax has been assessed by the assessing authority in accordance with law. He has submitted that therefore, the tax assessed by the assessing authority in accordance with law is tax admittedly payable by the revisionist. Learned counsel for the department has emphasized the observation of the Hob'ble Supreme Court particularly on the words admittedly payable . Learned standing counsel has also relied upon another judgment in the case of Commissioner of Sales Tax vs. M/s Vinus Auto Traders reported in 1980 U.P.T.C. 273. He has also referred a decision of this court in the case of Commissioner Trade Tax vs. M/s Control Switch Gears Company Ltd. Sector-2 , Noida and in para 29 this Court has observed as follows : Applying the principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts of the revisionist but it has treated the revisionist as a manufacturer as such is a dealer therefore, is liable to tax on purchase of Opium under Section 3-AAAA of the Act and that the Opium at the point of sale to consumer under Section 3-AAA of the Act. The revisionist disputed any admission of liability of tax on the purchase of Opium and has not deposited the tax initially but on heavy insistence by the respondent department the tax was deposited by the revisionist under protest. In this background the department has proceeded to ask interest by treating the liability of tax at the hands of the revisionist that the tax was admittedly payable . The department therefore, has proceeded to charge the interest on delayed payment and in this background a show cause notice was issued. According to the counsel for the revisionist the show cause notice was issued after a gap of four years from the end of the relevant assessment year therefore, it was illegal act on the part of the assessing authority. The revisionist had filed the rectification applications under Section 22 claiming that the interest is not chargeable as the liability of tax was never admitted nor it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest or interest can legally be from the revisioist. I have perused the material placed before me and the judgment which are relied by the respective parties. In view of the above facts, which are based on material evidence, I am of the opinion that the facts in the present case prima facie establishes that in fact the revisionist has never admitted any liability of purchase tax. It was not the tax which was admittedly payable by the revisionist. The High Court in Commissioner of Tax vs. H.A. Corporation 2002 (127) STC 258, on a plain interpretation of provisions of Section 8(1) of the Act held that the assessee was required to deposit the tax that was admittedly payable by it. The Supreme Court held that the words tax admittedly payable means the tax payable under the Act on the assessed turnover as disclosed in its accounts or admitted by it in its return or other proceedings under the Act. In the present case it is an admitted fact that the revisionist disputed the liability of payment of tax and that the revisionist never admitted liability to pay any tax on the transaction in question and this fact that the revisionist is disputed its liability under the Act is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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