TMI Blog2002 (3) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... ennai [1999] 113 STC 233. 2.. In order to comprehend the point to be resolved in this case, the following facts are to be stated: The petitioner, an incorporated company under the Companies Act is an assessee on the file of the first respondent. The petitioner received, inter alia, lease rentals from M/s. Ennore Foundries Limited on the lease of diesel gensets in a sum of Rs. 1.50 crores for both the assessment years 1991-92 and 1993-94. Section 3-A of the Tamil Nadu General Sales Tax Act (hereinafter referred to as "the Act") provides for levy of tax on the right to use any goods. The petitioner challenged the said provision by filing writ petition in W.P. No. 6240 of 1992 and this Court by its order dated April 29, 1992 granted interim stay of operation of the impugned provision section 3-A of the TNGST Act, 1959, in so far as they purport to levy sales tax on the lease transactions of the petitioner. It is pertinent to state that the abovesaid provision of section 3-A introduced by Act 28 of 1984 was subsequently amended by Act 25 of 1993 with retrospective effect of the date of original inception. In view of the amendment made, the writ petition filed by the petitioner wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 (SC); (2001) 1 SCC 278. (3) Food Corporation of India v. State of Haryana reported in [2000] 119 STC 1 (SC); (2000) 3 SCC 495. (4) Commissioner of Income-tax, Bhopal v. Hindustan Electro Graphites Ltd., Indore, reported in [2000] 243 ITR 48 (SC); (2000) 3 SCC 595; and (5) J.K. Synthetics Ltd. v. Commercial Taxes Officer reported in [1994] 94 STC 422 (SC). 4.. On the other hand, the learned Government Pleader contended that there is absolutely no merit in the case of the petitioner. The statute provides that if on any amount remaining unpaid after the date specified for its payment, the dealer shall pay in addition to the amount due interest at 2 per cent per month of such amount for the entire period of default. The petitioner though filed the return for the relevant assessment years disclosing the taxable turnover of Rs. 1.50 crores, has not paid the tax on the relevant dates. Though this Court has granted stay at the instance of the petitioner, ultimately the writ petition was disposed of as infructuous. Hence, as per the statutory provision of section 24(3) of the TNGST Act, the petitioner has to pay interest for the belated payment. He prayed for the dismissal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h transaction was involved in the petitioner's business. In paragraph No. 14 of the affidavit, it was stated that in the case of a "deemed sale", there is no actual sale at all; there being no actual sale in a lease transaction, even the Constitution (46th Amendment) Act cannot enlarge the definition of "sale" so as to make it include transactions in which there is no transfer of property at all from one of the contracting parties to the other. Article 366, clause (29-A), sub-clause (d) is therefore invalid in law, being beyond the competence of Parliament itself and consequently the new charging section 3-A of the TNGST Act is also invalid. Further, it was contended that clause (29-A) of article 366 is also bad in law in view of the specific new provision contained in article 286 of the Constitution. With the above grounds, the petitioner ultimately sought for a declaration of section 4 of the Constitution (46th Amendment) Act, 1982 in so far as it has inserted a new sub-clause (d) in the new clause (29-A) in article 366 of the Constitution of India and likewise, the new charging section 3-A and section 2(g), 2(n) and 2(r) of the TNGST Act, 1959, as amended by the Tamil Nadu Act 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though the writ petition was disposed of as infructuous, the petitioner's contention was deemed to have been accepted for amending the provision cannot be accepted and cannot in any way advance the case of the petitioner. On the contrary, the transaction of the petitioner, which was sought to be assessed under section 3-A is simplicitor a transaction of lease rental of the goods purchased locally and leased out to Ennore Foundries Limited as per the sworn affidavit and taxable under section 3-A both in the unamended and amended form. When a specific question was put to the learned counsel as to what are all the transactions sought to be assessed under section 3-A and what was the cause of action, which prompted the petitioner to file the earlier writ petition, the learned counsel is not able to answer and admitted that the transactions of the petitioner are nothing to do with the restriction imposed under article 286 of the Constitution of India. The Statement of Objects and Reasons for the Amendment Act 25 of 1993 also did not suggest anything as to the amendments were made because of the reason of challenge of the provision in a court of law, but rather proceeds as follows: "In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since it is only compensatory and not penal in nature in the event of dismissal of the substantive proceedings in the main writ petition. 12.. Further, though the writ petition has been disposed of as early as December 22, 1994, the petitioner paid the tax due to the Government only on September 20, 1995. The petitioner retained the amount legitimately due to the Government in the guise of filing a writ petition without there being any cause of action or bona fide and obtained an order of stay thereby retained the amount with it during the entire period and earned good profit with the amount and further deprived the State from utilising the said amount for its public purpose. The disposal of the writ petition ultimately rendered the petitioner to pay interest for the belated payment under section 24(3) of the Act. 13. It is well established principle that no act of court causes prejudice to any party. The pristine doctrine couched in the maxim "actus curiae neminem gravabit" has ever remained a salutary and guiding principle. Hence, we are of the clear view that there is absolutely no bona fides on the part of the petitioner to file the writ petition in W.P. No. 6240 of 1992, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity Board reported in (1997) 5 SCC 772 instead of supporting the case of the petitioner, rather advance the case of the Revenue. In that case, the Supreme Court has held thus: "Stay of operation of order or notification only means the order or notification which has been stayed would not be operative from the date of passing of the stay order and it does not mean that the order or notification has been wiped out from existence. An order of stay granted pending disposal of a writ petition, suit or other proceeding comes to an end with the dismissal of the substantive proceeding and it is the duty of the court in such a case to put the parties in the same position they would have been but for the interim orders of the court." The Supreme Court further held thus: "The grant of stay of the notification in the instant case had not the effect of relieving the consumers/petitioners of their obligation to pay late payment surcharge/interest on the amount withheld by them when their writ petitions were dismissed ultimately. Holding otherwise would mean that even though the Electricity Board, who was the respondent in the writ petitions succeeded therein, yet would be deprived of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, during the period from May 17, 1975 to January 6, 1997, the tax on levy transaction was held to be unconstitutional by the Punjab and Haryana High Court. That decision was not challenged by the State. However, in the year 1982, a demand notice was issued levying sales tax on the turnover involving levy transaction. That demand was held constitutional by the Supreme Court on being taken before it. Consequent to that, the appellant paid the tax in respect of the assessment year 1975-76 also. However, the Revenue demanded interest under section 59 of the Haryana General Sales Tax Act, 1973 for the assessment year 1975-76. The levy being upheld by the High Court, the Supreme Court held that during the period from May 17, 1975 to January 6, 1997, the law declared by the High Court was that the State of Haryana did not have the constitutional authority to impose sales tax on levy transactions. Therefore, until January 6, 1997, the State of Haryana could not have made a demand for the payment of sales tax on levy transactions. The declaration of law made by the Supreme Court empowered the State to raise a demand even for the assessment year 1975-76. The valid demand for the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o furnish returns showing his actual turnover for each month or other periods as may be prescribed and to pay tax on the basis of such returns. The tax under this subsection shall become due without any notice of demand to the dealer on the date of receipt of the return or on the last due date as prescribed, whichever is later. The relevant rules for enforcement of section 13(2) are rule 18(1) to (4) of the Tamil Nadu General Sales Tax Rules, which are as follows: "18(1). In lieu of opting for payment of advance tax described in the foregoing rules, the dealer may apply to the assessing authority for permission to submit returns and pay tax in accordance with the provisions of sub-rules (2) to (7) of this rule. If the dealer desires that this method of assessment should be applied to him from the beginning of any year he shall intimate his desire in writing to the assessing authority at the time of submitting the return prescribed in rule 9 or sub-rule (2) of rule 15 and, on being permitted, shall submit the returns and pay the tax in accordance with the provisions of sub-rules (7) to (9) of this rule. (1-A) ..... (1-B) ..... (2) Subject to the provisions of sub-rule (5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides that on any amount remaining unpaid after the specified date, the dealer shall pay in addition to the amount due interest at 2 per cent per month on such amount for the entire period of default. Even the liability to pay the interest is not only automatic, but the section enjoins a liability on the part of the dealer to pay the interest in addition to the amount due by way of tax under section 24(3). 20.. Much reliance has been placed by the learned counsel for the petitioner on the decision of J.K. Synthetics Ltd. v. Commercial Taxes Officer reported in [1994] 94 STC 422 (SC) to contend that the interest under section 24(3) could be levied only for the period subsequent to assessment of sales tax in the final assessment are made. The petitioner paid the amount even prior to final assessments were made. Hence, there can be no question of payment of interest. The said contention is raised only for rejection on the simple reason that sections 7(2), 7(2A) and 11B of the Rajasthan Sales Tax Act, which were considered in the said decision are not pari materia provisions of sections 13(2), 24(1) and 24(3) of the TNGST Act and rule 18(2) of the TNGST Rules, 1959 with which we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the year of account of the dealer. The rule further provides that if the return is not accompanied by a receipt showing deposit of tax as required by section 7(2), the assessing authority shall not be bound to take cognizance of the return. Column 11 of ST 5 return requires the dealer to indicate the turnover for the concerned quarter and permits certain deductions enumerated therein. The return has to be verified in the manner indicated at the foot of the form. 23.. While considering the above provisions, the Supreme Court held that under section 11B of the Rajasthan Sales Tax Act, the liability to pay interest on unpaid tax amount accrued on the dealer in two situations only, viz., (i) failure to pay the tax due under subsections (2) and (2A) of section 7 and (ii) failure to pay the tax within the time allowed by the notice of demand or thirty days from the receipt of the notice by the dealer. Section 11B before its amendment nowhere provided for payment of interest on the unpaid tax amount as found on final assessment from the date of the filing of the return under section 7 of the Act. If the amount of tax payable under sub-section (2) is paid on the basis of return, not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es laid down in the decision of the apex Court in J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 relied on by the learned counsel for the appellant are applicable to the facts of the present case. The decision of the Supreme Court referred to above turned on the following facts: the Commercial Taxes Officer in that case passed assessment orders relating to the assessment years 1975-76, 1976-77 and 1977-78 under the provisions of the Rajasthan Sales Tax Act, 1954 (Act 29 of 1954) and the Central Sales Tax Act, 1956. The returns were filed by the appellant in that case on the premises that the amount of freight charged in respect of sale of cement under the Cement Control Order did not form part of the sale price for the payment of sales tax. In Hindustan Sugar Mills Ltd. v. State of Rajasthan and J.K. Synthetics Ltd. v. Commercial Tax Officer, Kota [1979] 43 STC 13 the apex Court held that freight element formed part of the price of cement and sales tax was leviable on the sale price inclusive of the freight amount. The appellant in that case was therefore, required to pay sales tax on the sale price, inclusive of the freight. The point that arose for considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. As pointed out by the division Bench in the decision in Apollo Tubes Limited v. Additional Deputy Commercial Tax Officer, Ranipet [1994] 93 STC 339 (Mad.); (1992) 2 MTCR 190, section 24(3) merely says that on any amount remaining unpaid, after the specified date, the dealer shall pay, in addition to the amount due, interest at 2 per cent per month on such amount for the entire period of default. The liability to pay interest is not only automatic, but the section enjoins liability on the part of the dealer to pay the interest in addition to the amount due by way of tax under section 24(3). The apex Court in the decision referred to above was concerned with the interpretation of sections 7(2), 7(2A) and 11B of the Rajasthan Sales Tax Act which are not in pari materia with the provisions in sections 13(2), 24(1), 24(3) of the Act and rule 18(2) of the Rules with which we are concerned. It is seen from the discussion at page 437 in J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 that section 7(1) of the Rajasthan Sales Tax Act enjoins on every dealer that he shall furnish prescribed returns for the prescribed period within the prescribed time to the assessing a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
