TMI Blog2009 (12) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... ough now found to be wrong by this court, the respondents should have settled the liability towards interest under the Amnesty Scheme, that was prevalent up to March 31, 2009. We find force in this contention because had the Tribunal dismissed the appeals probably the respondents would have settled the liability under the Amnesty Scheme. We therefore direct the assessing officer to grant amnesty benefit to the respondents reducing the interest in terms of the scheme and allow settlement of liability by demanding further interest at one per cent per month for the amnesty amount payable from the last date for payment under the amnesty scheme till date of payment. - S.T.R. Nos. 90,107 of 2009 - - - Dated:- 16-12-2009 - RAMACHANDRAN NAIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment. When the matter was heard, the Division Bench felt that subsequent amendment introduced to section 23(3A) with effect from April 1, 2004 is clarificatory in nature and the interest under section 23(3A) being compensatory in nature is payable on the short-fall in payment of tax which is the difference between the paid tax and assessed tax, whatever be the circumstances which led to non-payment of full amount of tax in time. In order to consider the issue, we have to refer to the provisions of section 23(3A) as it originally stood and after its amendment by the Finance Act, 2004 with effect from April 1, 2004, which are extracted below: 23.. Payment and recovery of tax. (1) . . . (3A) Where any dealer has failed to include any t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turns filed and to make provisional or regular assessment demanding actual tax. Therefore according to counsel if there is failure on the part of the assessing officer the assessee cannot be called upon to pay interest for the lapses of the officer. The Special Government Pleader has referred to the decision of this court in Chandramani Traders v. State of Kerala [2008] 16 VST 294 and two unreported decisions of this court in S.T.R. No. 484 of 2004 and M.F.A. No. 331 of 2000 and contended that interest is payable under section 23(3A) from the due date it was payable till payment, irrespective of the reason for non-payment, short payment or delayed payment of tax. On going through the provisions both before and after the amendment, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver of each such goods. Non-payment or short-payment will arise on account of the dealer mis-classifying taxable goods as non-taxable and can also happen on account of mis-classification of taxable goods at rates lower than the rates provided in the Schedules to the Act. Therefore failure of inclusion of turnover in the return leading to non-payment or shortpayment of tax under the pre-amended provision means non-inclusion of taxable turnover or any part thereof at the appropriate rate of tax. We hold that the amendment is only clarificatory because the turnover omitted in the return that attracts liability for interest is taxable turnover or otherwise the section before its amendment becomes meaningless. Interest payable under section 23(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 23(3A) of the Act. The finding of this court is that even if a dealer has declared the turnover at a lower rate of tax as against higher rate payable under the Act, still the dealer is not liable to pay interest under section 23(3A) because there was no omission to include turnover. This interpretation in our view defeats the very purpose of the section which is to recover interest in the form of compensation for belated payment of tax. We therefore overrule the judgment in P.K. Damodaran's case [2004] 138 STC 442 (Ker) above referred to and allow the revision cases by reversing the orders of the Tribunal and by restoring the interest levied under section 23(3A). However, counsel appearing for the respondents submitted that b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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