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2007 (4) TMI 262 - SC - VAT and Sales TaxWhether the assessee was entitled to interest @ 18% per annum from 20/21 December 2001 upto the date of refund/adjustment? Held that:- The assessee has paid the tax under the Sales Tax Act in order to avoid penalty. The question of paying interest will also not arise because sales tax is an indirect tax. It is collected by the assessee from its customers. The incidence of tax falls not on the assessee but on its customers. It is a sort of a loan given by the State to the assessee so that the assessee can use the tax amount to meet its working capital requirement. As stated the liability of the respondent-assessee accrued each year, therefore, there is no question of the Department paying interest @ 18% on the tax collected by the assessee during the aforestated period. The tax was collected by the assessee from its customers as an agent for the Government. The assessee is allowed to retain that amount which has accrued to the account of the State Government. Therefore, the question of payment of interest under the Deferment Scheme does not arise. This reasoning appears to be the basis for the Scheme for not providing for the payment of interest. Appeal allowed in part by setting aside the directions of the High Court to the State to refund the amount of the tax collected from 30-4-1997 to 20/21-12-2001 with interest @ 18% from 21-12-2001 upto the date of refund/adjustment.
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