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TMI Blog2001 (3) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... ent sub-section (3B)] is violative of articles 14, 19, 20 and 21 of the Constitution of India. And in case it is found to be valid, it was contended that the same could operate only prospectively. 3.. In the common judgment giving rise to the writ appeals, a learned single Judge held that section 23(3B) is valid and that it is retrospective in operation. 4.. In all the writ appeals as also in O.P. No. 4927 of 1996, the issue centres round the sales tax collected but remitted belatedly whereas in O.P. No. 3778 of 1996 it is regarding belated payment of turnover tax. 5.. Section 23 of the Act which provides for payment and recovery of tax reads as follows: "23(3). If the tax or any other amount assessed or due under this Act is not paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en during the period the collection of tax or other amount is stayed by any court or authority is the issue in dispute. It is to be noted that when section 23(3) was originally enacted, for belated payment of amount due, the expression used was that the assessee should pay the prescribed amount "by way of penalty". Subsequently the expression was amended as "by way of penal interest" in 1988. In 1993 by the Finance Act, 1993 the word "penal" was omitted. In short, it is now declared and clarified that the amount prescribed for belated payment of amount due is "by way of interest" only. Going by the rate of interest, it can be seen that such rate is prescribed with a view to tighten up the machinery for collection of sales tax and as a det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expired. Thereafter, what is stayed is only the collection thereof and so long as statute does not empower any court or authority to waive interest, the assessee is liable to pay interest for the amount due after the prescribed period. 8.. In Calcutta Jute Manufacturing Co. v. Commercial Tax Officer [1997] 106 STC 433; AIR 1997 SC 2920, the Supreme Court considered this aspect and it was held at paragraph 16 as follows: "16. The tax amount which they should have paid as per section 6B remained with the appellant during the entire period and they would have earned good profit with that amount. The State, to which the tax amount should necessarily have gone, was not able to utilize it for public purposes. When appellants had the advantage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for mesne profits, damages, costs, interest, etc., as may deem expedient and fair conforming to justice to be done in the facts of the case....". Applying the abovequoted principle, the apex Court in that case, after observing that "The company is an on going business concern and must have utilised the money, saved on account of the decision of the High Court, gainfully in its commercial activities........ "The Board had to suffer financial loss because of the said erroneous decision of the High Court. In the aforesaid circumstances, it will be lawful, conforming to equity and well-established principle of restitution for the Board to claim interest at 18 per cent on the unpaid portion of the bill drawn on the basis of revised tariffs", h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettled canon of interpretation that an amending Act may be purely clarificatory to clear the meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of such a nature has always retrospective effect. 13.. It is profitable in this context to refer to Justice G.P. Singh's "Principles of Statutory Interpretation", Seventh Edition, (Chapter VI): "An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the Principal Act was existing law when the Constitution came into force, the amending Act also will be part of the existing law." In Mithile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86-87 onwards and in any case prior to 1994. It is their contention that their cases are to be governed by the law that existed at the time of assessment, appeal or revision. We do not find any basis in the said contention. Merely because prior to 1993 the provision for interest was qualified as penal, it does not cease to be interest. That provision is intended only to tighten up the machinery for collection of sales tax and as a deterrent measure to compel the dealers not to evade or delay the payment of tax and for the removal of doubts only it was clarified by the Finance Act, 1993 omitting the word "penal" and retaining the word "interest" alone, but at the same time maintaining the rate of interest as such. As already observed by us a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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