1996 (5) TMI 387 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of provisions regarding charging of interest under the Haryana General Sales Tax Act, 1973 based on extension granted by Assessing Authority.

Detailed Analysis:

The judgment of the Court was delivered by N.K. SODHI, J. The case involved a reference made by the Sales Tax Tribunal, Haryana under section 42(1) of the Haryana General Sales Tax Act, 1973 to answer a question of law regarding the charging of interest under section 25(5) of the Act. The issue arose when the Assessing Authority granted an extension for filing returns subject to the condition of payment of interest for a specific quarter, leading to a dispute over the imposition of interest for the extended period.

The facts of the case revealed that the assessee sought an extension for filing returns for the assessment year 1974-75 under rule 62 of the Haryana General Sales Tax Rules, 1975. The Assessing Authority extended the time for filing returns for all four quarters, with the condition of paying interest on delayed payment imposed only for the third quarter. The dispute arose when the Assessing Authority charged interest for late payment of tax for the extended period, leading to appeals and subsequent orders by the Appellate Authority and the Sales Tax Tribunal.

The Tribunal, relying on its earlier decision in Rohtas Industries case, held that the liability to pay tax arose on filing the return, and extension of time for filing automatically extended the time for payment of tax, rejecting the Revenue's argument that the extension was conditional. The Tribunal referred the question of law to the High Court, focusing on the charging of interest for the specific quarter where the condition was imposed.

The High Court analyzed the relevant provisions of section 25 of the Act, emphasizing that before filing returns, a dealer must pay the full amount of tax due and furnish a receipt from the treasury. The Court noted that the extension granted with the condition of paying interest for the extended period justified the Assessing Authority in charging interest under the law, rejecting the assessee's argument against the imposition of such a condition.

The Court held that the power to extend time for filing a return could be exercised by the Assessing Authority for special reasons, and imposing a condition regarding payment of interest was within its authority. The Court concluded that when time for filing the return is extended with the condition of paying interest, the Assessing Authority is justified in charging the interest under the law, ruling in favor of the Revenue and against the assessee.

In conclusion, the High Court answered the question referred in the affirmative, supporting the Assessing Authority's decision to charge interest based on the condition imposed during the extension granted for filing returns.