TMI Blog1996 (3) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of sugar. The petitioners, inter alia, manufacture spirit and liquor, etc. The State of Maharashtra passed the Maharashtra Purchase Tax on Sugarcane Act, 1962, with a view to levy tax on the purchase of sugarcane for the use in the manufacture or production of sugar including khandasari sugar. As per section 3 of the said Act, tax can be levied on the purchase of sugarcane which is used in manufacture or production of sugar in a factory. The Act also provides the rate of tax that can be levied, but it is made clear therein that in no case the rate so specified shall exceed 2 paise per kg. of sugarcane. The Act came into force in the year 1962 and the petitioners were being subjected to the levy of purchase tax which they had been paying. 3.. According to the petitioners during the accounting year July, 1978 to June, 1979, there was a grave depression among the sugar manufacturers as a result of which the petitioners suffered a set-back and this was due to decontrol of the sugar during that period, the price of sugar crashed from Rs. 450 per quintal to Rs. 250 per quintal. Due to the sudden fall in the price of sugar, the petitioners like the other sugar manufacturers were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugar factories remission was to be granted for crushing season 1978-79 to the extent of Rs. 8.10 per M.T. and the balance amount of Rs. 8.50 per M.T. was to be treated as loan to the concerned factories which loan was to bear interest at the rate of 6 per cent per annum. This was again reiterated by a subsequent resolution dated March 29, 1980. 6.. It is the case of the petitioners that in pursuance of the Government resolution referred to above, viz., dated March 29, 1980, an agreement bond was executed between the petitioners and the Government of Maharashtra and as per the terms of the said agreement bond, the amount of loan sanctioned and payable to the petitioners was to be adjusted towards its dues and arrears of purchase tax through the Accountant-General, Bombay. 7.. It is the case of the petitioners that as per clause 16 of the said agreement bond, it was agreed that the loan will be interest-free. Clause 16 of the said agreement bond reads as under: "The loan will be interest-free. The repayment shall commence after the loans obtained by Karkhana from Industrial Finance Corporation and other loan term financial institutions are fully paid with interest." Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said assessment orders, nor did he reserve the right to levy interest to any future date. 9.. Thereafter the petitioners submitted that the Assistant Commissioner of Purchase Tax (SC), Kolhapur Division, R.V. Sangli, being respondent No. 3, served on the petitioners show cause notices for the months of November, 1978 to July, 1979 all dated February 3, 1983. In the said show cause notices, the Assistant Commissioner of Purchase Tax proposed to levy interest at the rate of 6 per cent from the due date of payment to August 5, 1980, i.e., the date on which actually sugarcane purchase tax is converted into 6 per cent loan. The petitioners in their reply dated August 20, 1986 to the show cause notices raised various objections. The petitioners questioned the jurisdiction of the 3rd respondent and also pointed out clause 16 of the bond dated March 1, 1981, wherein it is stated that the loan is one of interest-free. However, the 3rd respondent, by its order dated November 5, 1986, imposed interest in respect of the months November, 1978 to July, 1979 by rejecting all the submissions and contentions advanced before him. 10.. Being aggrieved by the orders of the 3rd respondent, the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement dated March 1, 1981, entered into between the petitioners and the 1st respondent. 12.. Under section 6 of the Act the petitioners were liable to file monthly returns in respect of sugarcane purchased by them during each month. In the present case, the refund period under consideration is accounting period July 1, 1978 to September 30, 1979. According to the petitioners, the operation of crushing season in the said accounting period is from November 1, 1978 to July 31, 1979. According to the petitioners that due to grave crisis in the sugar industries and also in the context of negotiations which were going on between sugar manufacturers and the Government of Maharashtra, coupled with their inability to deposit the purchase tax, no returns were filed by the petitioners. However, it is seen that in due course of time, the Sugarcane Purchase Tax Officer, Sangli, commenced assessment proceedings and passed orders of assessment all dated October 12, 1981 from the month starting from November, 1978 to ending July, 1979. The Purchase Tax Officer while assessing the petitioners under section 7 of the said Act was fully aware and conversant with the adverse conditions through which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le or any part of interest payable by any occupier in respect of any period. " Section 9 of the Act reads as under: "9(1) Subject to such rules as may be made in this behalf and for reasons to be recorded in writing, the Commissioner, or any other prescribed revisional authority, may, upon an application or of his or its own motion, revise any order (including an order in appeal) made under this Act or any rules made thereunder, by any officer appointed to assist the Commissioner;" After referring to these two sections, the learned counsel appearing for the petitioners, reiterated his submissions, viz., the Purchase Tax Officer did not levy any interest under section 7B and secondly for the 3rd respondent to invoke section 9, there must be an order. The counsel pointed out the words as found in section 9 "upon an application or of his or its own motion, revise any order" would clearly show that unless there is some order passed by the Purchase Tax Officer, the 3rd respondent, viz., the Assistant Commissioner of Purchase Tax, has no authority or jurisdiction to impose interest. 14.. The counsel for the petitioners in this regard would place two decisions for our consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 57 of the Act. It is not a part of the powers of revision conferred under section 57 of the Act. This power appears to have been conferred on the revisional authority to take care of situations, where in the light of orders proposed to be passed in exercise of revisional power, modifying the order of assessment, etc., concealment of turnover is detected which might justify imposition of penalty under section 36(2) of the Act. In such a case, while passing the order in revision under section 57 of the Act, the revisional authority may itself impose penalty under section 36(2) of the Act, though no such penalty had been imposed by the assessing authority while assessing or reassessing the amount of tax." Secondly he would rely on the decision of the Madras High Court reported in Khemchand Rajkumar v. State of Tamil Nadu reported in [1974] 33 STC 78. That is also a case arising under the Sales Tax Act. In that case, the Division Bench of that High Court held that when the assessing authority has not chosen to exercise its power under section 12(3) for levy of penalty while making the assessment under section 12(2), the Board cannot, in exercise of its revisional power, levy pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reby imposing interest himself not by way of revising any order, cannot be said to be in terms of the provisions of the Act, as what is missing is an order. As contended by the learned counsel for the petitioners, such an order is a prerequisite or a pre-condition for the 3rd respondent to invoke section 9 and pass an order. We also find that this Court as well as the Madras High Court while dealing with identical provisions in the Sales Tax Act, took a similar view. Applying with the same ratio, we hold that the orders of the 3rd respondent dated November 5, 1986, marked at exhibits L1 to L9 are without jurisdiction. Consequently, it will follow that the orders of the 2nd respondent dated October 27, 1987 at exhibits M1 to M9 are also without jurisdiction and accordingly all the abovesaid orders are quashed and set aside. In view of the conclusions arrived above, we find it unnecessary to consider the second argument/submission of the counsel for the petitioners. Consequently the writ petition succeeds and stands allowed. There shall be no order as to costs. Rule is made absolute. Certified copy expedited. Writ petition allowed. - - TaxTMI - TMITax - CST, VAT & Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X
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