TMI Blog2005 (2) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... amonium Prasad, and S.N. Jha, Advocates, with him), for the respondents. A.K. Ganguli, Senior Advocate (S.K. Bagaria, K.K. Mani, N. Prasad and K.B. Sandeep, Advocates, with him), for the appellant. -------------------------------------------------- The judgment of the Court was delivered by Mrs. RUMA PAL, J. -The issue to be decided in these appeals is whether the appellant is liable to pay interest on the balance of sales tax dues for the period October 1, 1993 to September 30, 1994 under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 or was it exempt from doing so under section 17-A(2) of that Act. 2. The appellant-company is a registered dealer under the Tamil Nadu General Sales Tax Act, 1959. Sometime in 1988 proceedings were commenced in respect of the appellant under the Sick Industries Companies (Special Provisions) Act, 1985 (referred to hereafter as "SICA"). Ultimately on 28th September, 1993 a scheme was sanctioned by the Board of Industrial and Financial Reconstruction (hereinafter referred to as "BIFR") for rehabilitation of the appellant. Under the heading, "Cost of the scheme and Means of financing", the BIFR noted the requireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that the deferred tax shall be paid over a period of five years in equal instalments after a moratorium of one year, that is from 1st October 1995 to 30th September, 2000." 7.. The implementation of the scheme was reviewed by the BIFR on 18th August, 1994. The Minutes of the Meeting record that according to the Monitoring Agency, (which was the Industrial Development Bank of India), after the sanction of the scheme the appellant had to incur additional capital expenditure of Rs. 468 lakhs and pay statutory dues of Rs. 155 lakhs on account of Central excise duty for the year 1991-1992. As such the enhanced cost of rehabilitation rose from Rs. 1,491 lakhs to Rs. 2,114 lakhs. In response to a query by the BIFR, the representative of the appellant submitted that the additional expenditure of Rs. 623 lakhs would be financed out of deferment of sales tax agreed to by the State Government. After hearing the parties, the BIFR sanctioned the enhanced cost of rehabilitation of Rs. 2,114 lakhs. It also stated that the additional cost of Rs. 623 lakhs would be financed out of sales tax deferment of Rs. 623 lakhs. 8.. Consequent to this amendment of the scheme, an amendment notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,282. 11.. In response to the letter dated October 30, 1996, the appellant wrote to the Industries Department of the State Government on 15th November, 1996 saying that they would like to settle the sales tax dues as claimed by way of a comprehensive package. The package envisaged: (a) The waiver of the interest amount of Rs. 4.37 crores; (b) Payment of the balance excess amount on Rs. 5.52 crores in two instalments, the first of which would be paid within a fortnight from the date of the order of the authorities and the second after six months. 12.. The State Government passed an order on the appellant's representation on 31st December, 1996 by which it permitted the appellant to pay the amount of tax due with interest in two instalments, one in December 1996 and the second before March 5, 1997 subject to three conditions, the third of which stated that there would be no waiver of the interest payable on the deferred payment. It was made clear that the appellant was liable to pay penal interest at 24 per cent per annum on the outstanding arrears till the date of the payment of the arrears under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959. 13.. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent did operate retrospectively, the High Court held that by virtue of section 15 of the Tamil Nadu General Clauses Act, 1891 the State Government had the power to deny the benefit of deferral granted retrospectively. 19.. The appellant submits that the view expressed by the High Court was contrary to the well established principles laid down in several decisions of this Court including Strawboard Manufacturing Co. Ltd. v. Gutta Mill Workers' Union AIR 1953 SC 95 and Kazi Lhendup Dorji v. Central Bureau of Investigation (1994) Supp 2 SCC 116. In addition, the appellant submits that the Scheme framed by BIFR also did not lay down any ceiling on the quantum of deferral of the sales tax. It is submitted that the scheme was a statutory one and binding on the State Government under the provisions of section 18(1), (4), (8) read with section 19(3) and section 32 of SICA. 20.. According to learned counsel for the respondents, neither the Scheme nor the first notification had granted an unlimited sales tax deferral as claimed by the appellant. The original scheme envisaged a deferment of sales tax of 6 crores 23 lakhs. This limit was subsequently raised to Rs. 1,246 lakhs at the reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any part of the tax payable in respect of any period. If, on the other hand, the conditions are not satisfied, then too the State Government may allow the tax due to be repaid in instalments under section 24(1) but in such a case the assessee would be liable to pay interest under section 24(3) which provides: "On any amount remaining unpaid after the date specified for its payment as referred to in sub-section (1) or in the order permitting payment in instalments, the dealer or person shall pay, in addition to the amount due, interest at one and half per cent per month of such amount for the first three months of default and at two per cent per month of such amount for the subsequent period of default." 23.. Both the Tribunal and the High Court have found as a fact that the scheme which was sanctioned by the BIFR initially on July 28, 1993 provided for a limit on the quantum of sales tax deferral namely Rs. 623 lakhs. We see no reason to interfere with this concurrent finding of fact. The sales tax deferral was part of the scheme and was granted as a measure of financial assistance to meet a projected need for the purposes of the appellant being rehabilitated. Both the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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