2011 (3) TMI 1433 - HC - VAT and Sales Tax

Revision petition - suppression in purchase and sales - whether interest is charged on penalty levied under Section 17(5A) of the Act which is the levy made as a result of the revised order issued under Section 19(1) of the KGST Act in modification of the original order issued under Section 17(4) of the Act Held that - Assessing Officer directed to examine the correctness of the revised order in regard to the levy of interest based on rectification application to be filed by the Petitioner Petitioner is also free to settle liability including interest on penalty under the Amnesty Scheme

Summary

Issues:
1. Assessment based on suppression in purchase and sales.
2. Reduction of addition in appeal.
3. Justification for acceptance of accounts.
4. Charging of interest at 65 per cent.
5. Correctness of demands raised by the Assistant Commissioner.
6. Levy of interest on penalty under different sections of the Act.
7. Directions to the Assessing Officer regarding interest and rectification application.

Analysis:
The judgment by the Kerala High Court, delivered by Justice C.N. Ramachandran Nair and B.P. Ray, dealt with a case involving assessment based on suppression in purchase and sales. The Petitioner was found to be involved in suppression, leading to an estimation basis assessment where three times the value suppressed was added to the declared turnover. In the appeal, a substantial relief was granted by reducing the addition to the equal amount of suppression detected. The Tribunal confirmed this order, leading to the filing of a revision. The Court observed that suppression was proved with evidence, dismissing the revision case due to lack of merit.

The Court also addressed the issue of charging interest at 65 per cent by the Assistant Commissioner based on the orders of the Tribunal. The judgment highlighted the confusion regarding whether interest was charged on penalty levied under specific sections of the Act. The Court directed the Assessing Officer to examine the correctness of the revised order concerning the levy of interest. It was emphasized that interest on penalty under certain sections cannot be demanded from the date of the original demand but can be demanded for default in payment of penalty under a different section of the Act.

Furthermore, the judgment provided directions to the Assessing Officer for the examination of the demands raised by the Assistant Commissioner. The Court instructed the Petitioner to file a rectification application along with a copy of the judgment to address the issue of interest on penalty. Additionally, the Petitioner was given the option to settle the liability, including interest on penalty, under the Amnesty Scheme. The detailed analysis of the judgment reflects a comprehensive review of the issues related to assessment, reduction of addition, charging of interest, and directions for further proceedings regarding the levy of interest on penalty under different sections of the Act.