1983 (7) TMI 287 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to the order of assessing authority demanding penalty under section 24(3) of the General Sales Tax Act.
2. Constitutional validity of section 24(3) in the context of allowing payment of tax in instalments.
3. Interpretation of Government Order (G.O.) permitting payment of tax in instalments and its impact on the application of section 24(3) for penal interest.

Analysis:
1. The petitioner, a registered dealer, was assessed to sales tax for certain years and requested to pay the arrears in instalments. However, the petitioner defaulted on the monthly payments, leading to a notice from the assessing authority demanding a penalty under section 24(3) of the General Sales Tax Act. The petitioner challenged this demand through a writ petition, arguing that the levy of penal interest was illegal and unconstitutional since they were permitted to pay in instalments by the Government.
2. The respondent contended that the permission to pay in instalments was subject to conditions, and non-compliance with these conditions would make section 24(3) applicable automatically. The respondent cited a previous court decision upholding the constitutional validity of section 24(3) despite its stringency. The court rejected the petitioner's constitutional challenge based on this precedent.
3. The court examined the specific language of the Government Order (G.O.) permitting instalment payments and noted that it explicitly stated the liability to pay penal interest at 24% on outstanding arrears under section 24(3. The G.O. clarified that penal interest could not be waived under any circumstances. Consequently, the court held that the petitioner's request for waiver of penal interest could not be granted due to the clear provisions of the G.O., thereby dismissing the writ petition.

In conclusion, the court upheld the assessing authority's demand for penalty under section 24(3), citing the conditions of the Government Order and the precedent supporting the constitutional validity of the section. The court emphasized the importance of complying with the terms of such orders and statutes, denying the petitioner's request for waiver of penal interest.