TMI Blog2000 (9) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... II was issued accordingly by the respondent No. 1, but without enclosing the Refund Payment Order (cash) for Rs. 5,71,692 in terms of section 12 of the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act"). As regards the deposit of excess amount as tax, the company's case is that it collected tax at the full rates from the customers, registered under the 1941 Act, who failed to supply declaration forms and that it deposited such money into the Government treasury. It is its further case that when any such customer had produced declaration forms later, refund of the appropriate amount of tax was made by the company to such customers. Since the aforesaid amount was found to be in excess by the assessing officer, several reminders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of tax, penalty or interest paid by such dealer in excess of the amount due from him under this Act, either by cash payment or by deduction or adjustment of such excess from the amount of tax, penalty or interest due in respect of other period." Rule 55(1A) of the 1941 Rules is the rule corresponding to section 12. This rule runs as follows: "55. (1) ................................. (1A) If the amount of tax, surcharge, additional surcharge and penalty assessed under rule 54 is lower than the amount already paid by the dealer for the same period and if there are any arrears of tax, surcharge, additional surcharge and penalty assessed under section 11 remaining due from him in respect of any other period, the assessing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther period, but no other type of arrear can be adjusted against such excess amount. A penalty, as may be imposed in a proceeding under section 10E(3), cannot be said to be a penalty under section 11. Therefore, in making an adjustment/deduction under rule 55(1A), the assessing officer cannot invoke his jurisdiction under section 10E(3). Moreover, section 12 and rule 55(1A) speaks of "amount" of tax, penalty, interest, etc. In other words, at the time of adjustment/deduction from the excess amount, the arrear amount must be a known figure. Since it is obligatory to send the Refund Payment Order along with the notice in form VII, it is not permissible to keep back the refundable money for years together after the service of the notice in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Here inspite of issue of demand notice in form VII, the assessing officer has withheld the money on the off chance of imposition of penalty under section 10E in a proceeding which is still pending. This is not permissible. Therefore, under no circumstances the impugned withholding of the amount is justified. 7.. No doubt the 1941 Act does not have any provision for payment of interest to a dealer for default in refunding of an excess amount unless such excess amount arises out of an order under section 20 or 21. Since it has been made obligatory under rule 55(1A) to send the Refund Payment Order along with a notice in form VII, the Legislature did not consider it necessary to make any provision for interest to be paid to a dealer for de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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