1989 (9) TMI 382

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..... f the appellant to pay penal interest in regard to sales tax payable for the years 1978-79 and 1979-80. The third respondent imposed penalty in regard to each year. The appellant challenged the same in revision petitions filed before the second respondent who held that the order of the third respondent is not sustainable and penal interest is leviable only on default to pay tax on demand made on t .....

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..... revised returns. This order is now challenged. 2.. The appellant has formulated two questions of law for consideration. It is necessary to consider only the second question, namely: "Whether the liability to penal interest under section 23(3) arises only on failure to comply with the demand for the tax? " This question arises in view of the fact that the Board of Revenue has taken the stand that .....

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..... produce evidence in respect thereof along with the return which he is required to submit under sub-rule (1) of rule 18." The question of law is therefore answered in favour of the appellant. 3.. In the result, we set aside orders No. E4-39375/81/TX dated November 17, 1982 and E4-39374/81/TX dated November 17, 1982. Orders dated June 26, 1981 in S.T.R.P. Nos. 33 and 32 of 1985 of the second respon .....

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