9911796707
TMI Blog1991 (6) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... y with effect from October 1, 1983, introducing interest. The company's aggregate gross turnover for the year ending March 31, 1979, exceeded Rs. 50,00,000 and as such, the company became liable to pay turnover tax in terms of section 6B of the 1941 Act and section 4AAA of the 1954 Act as soon as those provisions came into force. The company moved an application [C.R. 5416(W) of 1982] under article 226 of the Constitution of India in the High Court at Calcutta, challenging the constitutional validity of the aforesaid provisions relating to imposition of turnover tax. On April 12, 1982, the learned single Judge of the High Court passed an order restraining the respondents from giving any effect to those provisions till disposal of the writ application, on condition of depositing 50 per cent of the impugned tax in a separate account not to be operated by the applicant. That order was modified subsequently to the effect that the company could furnish bank guarantee instead of depositing the money in a separate account. A number of other dealers also moved the High Court under article 226 challenging the constitutionality of imposition of turnover tax. Many of those writ petitions wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the company. The applicant-company claims that the provisions as to interest, viz., section 10A(1) of the 1941 Act and section 8A(1) of the 1954 Act can have no application to its case and it has no liability under those provisions for the reason that returns were filed duly and the entire amount of payable turnover tax was paid. Similarly, sub-section (2) of those provisions should not apply to the applicant, as there was no failure to submit return. Sub-section (3) will also not apply to the case of the applicant. The applicant could not pay the turnover tax within the prescribed time, since the writ petition challenging imposition of the tax was pending in the High Court and since it was protected by an interim order of the High Court. It, therefore, cannot be saddled with interest on the principle that no one should suffer any prejudice having acted on the court's order. Moreover, the High Court had permitted the applicant to make payment of the turnover tax in instalments specified by the court. Thus, the tax was paid in accordance with the High Court's order. On these grounds, the applicant-company prays for quashing the notices and the orders of determination of interest a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest for a single year was made but the applicant has not yet paid the sum. As regards return under the 1954 Act, in the return for the month ending June 30, 1984, the turnover tax was computed but the reason for non-payment of tax was not stated and challan showing the payment of the tax was not enclosed. In the returns for the months of May and June, 1985 and for the years 1985 and 1986, similarly, no reason was given as to why the tax was not paid. Thus, returns were not submitted always in a correct and complete manner. It is also the case of the respondents that apart from the aforesaid defects in some of the returns, all the returns filed by the applicant were neither true nor correct, because those were not accompanied by treasury challans evidencing payment of the entire amount of the turnover tax computed therein. The provisions of law as to interest came into play and the interest actually accrued, when the turnover tax was not paid by the applicant within the time fixed by the statute. Interest has been demanded from the applicant only from the date from which the provisions of law as to interest came into force. Neither the interim order nor the final order under wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verned by sub-section (3), that the assessment has been made by the taxing authority. But as already stated, the common and basic condition which must be satisfied in each case before the liability of paying interest can arise is that the full amount of payable tax must not have been paid by the prescribed date. 7.. Parties have relied on the decisions of this Tribunal in the cases of Kingsway & Co. [1990] 76 STC 119 and M.L. Shroff & Co. [1991] 80 STC 65, to which two of us were parties. However, each case is decided and observations in each case are made in the context of the facts and circumstances of that case. Some observations may appear to be in the nature of general application, but those should also be considered in the context of the facts and circumstances obtaining in that particular case. Naturally, the court keeps in view the particular facts of each case, while deciding it or making any observation in the judgment. Therefore, the ratio decidendi of a decided case is to be considered in that perspective. In Kingsway & Co. [1990] 76 STC 119, it was decided by this Tribunal that the case was covered by either of the sub-sections (1) and (2) of section 10A of the 1941 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that by virtue of the stay granted by the High Court in the earlier writ petition, no interest could be demanded from them prior to February 24, 1988. They contended that they had filed returns and paid tax according to the returns and, therefore, they could not be held liable for interest on turnover tax under either sub-section (1) or (2) of section 10A. In any case, section 10A(3) did not apply. It was held by this Tribunal in the judgment reported in [1990] 76 STC 119 (Kingsway & Co. v. Commercial Tax Officer) that the return envisaged under section 10A is a full and complete return in all respects, and that the applicants did not submit complete returns for turnover tax. It was held, therefore, that if return is deemed to have been filed, then the applicants are liable under section 10A(1). It was, however, held that since no complete return was filed regarding turnover tax and no turnover tax was also paid, the applicants were liable to pay interest under section 10A(2). In the present case, the applicant-company, like many others, filed a writ petition challenging the validity of imposition of turnover tax. The petition was once dismissed for default, then it was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 129: "The injunction could not prevent the applicants from furnishing returns in respect of taxable turnover and then claiming exemption from payment of the same in view of the interim order of injunction. That does not appear to have been done." Dr. Chakraborty, learned advocate for the applicant, contended on the basis of the above observation that return was furnished in respect of taxable turnover in the present case and exemption was also claimed in most of the returns in view of the interim order. Therefore, he further contended that the liability to pay interest did not arise in respect of the applicant so long the interim order was in force. It may be noted that the writ petition having been dismissed for default on September 25, 1985 and having been restored to file and also disposed of on March 25, 1988, even the interim order stood vacated as on March 25, 1988, the date of final order and also during the intervening period from September 25, 1985 to March 25, 1988. Dr. Chakraborty's another contention is that the arrears of turnover tax were paid in terms of the order dated March 25, 1988, passed by the High Court. That being so, the question of liability to pay inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable turnover and payable turnover tax and the reason for nonpayment of the tax were stated in the particular part of the return meant for turnover tax. In those cases, it may be said that complete return was filed. But we have already seen that the statutory requirements cannot be said to have been complied with, if only returns are filed. The statute requires that the returns must be accompanied by receipted treasury challan showing payment of the computed turnover tax. Admittedly, the computed tax was not paid. The given reason for non-payment is no protection or safeguard against the statutory result accruing from delayed payment. Interest, it is now settled, is imposed with a view to tightening up the machinery for collection of sales tax and as a deterrent measure so that dealers may not evade or delay the payment of tax [see Haji Lal Mohd. Biri Works v. State of U.P. [1973] 32 STC 496 (SC) and Kingsway & Co. v. Commercial Tax Officer [1990] 76 STC 119 (WBTT)]. Thus, accrual of interest occurs in accordance with the statute, if tax is not paid within the prescribed date. The interim order of injunction of this nature did not put a stop to the accrual of interest. 12.. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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