TMI Blog2010 (8) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... filed till December, 1992, that is up to monthly return filed for November, 1992 and by sustaining the interest levied for the remaining period of default. since all the petitioners are public sector companies, and considering the high rate of interest payable under section 23(3) which we have upheld for the periods commencing from the period after the Full Bench judgment, we feel if the petitioners clear the entire arrears of interest within one month from the date of receipt of a copy of this judgment, they should be exonerated from payment of penalty under section 45A of the Act for the assessment years 1988-89 to 1992-93 for the Indian Oil Corporation Ltd. , 1987-88 to 1990-91 for the Hindustan Petroleum Corporation and for the year 1987-88 for the Bharath Petroleum Corporation Ltd. However, if interest liability is not settled as above, penalty levied will stand sustained and if paid penalty levied will stand cancelled.The petitioners are free to adjust penalty if any paid against balance interest liability while settling interest liability as above - 7483,6233,6164 of 1999 - - - Dated:- 19-8-2010 - RAMACHANDRAN NAIR C.N. AND GOPINATHAN P.S. , JJ. The judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeals filed, the Supreme Court did not grant any stay against operation of the Full Bench judgment of this court. The Supreme Court ultimately dismissed their appeals vide judgment dated October 9, 1996 which is reported in Hindustan Petroleum Corporation v. State of Kerala [2000] 118 STC 311. In fact, even thereafter review petitions were filed and the same were also rejected by the Supreme Court on January 7, 1997. All the petitionercompanies remitted sales tax on excise duty during 1996-97 that is after the ultimate judgment of the Supreme Court dismissing the appeals filed against Full Bench decision of this court. Consequent upon non-payment and delay in payment of sales tax on excise duty, the Department demanded interest under section 23(3) of the KGST Act for the entire period of default and for a few years, details of which are given separately hereunder. Penalty was also levied under section 45A of the Act. Orders levying interest and penalty were subject-matter of revision at two levels before the Deputy Commissioner and Commissioner of Commercial Taxes. Both the statutory authorities found that interest for belated payment of tax on excise duty is statutory liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but continued to file returns without including excise duty in taxable turnover until the Supreme Court dismissed the SLP filed against Full Bench judgment of this court on October 9, 1996, which is reported in Hindustan Petroleum Corporation v. State of Kerala [2000] 118 STC 311 (SC). (4) Admittedly arrears of tax on excise duty were paid without interest by all the petitioners on various dates from December, 1996 to March, 1997. Interest is levied and demanded under section 23(3) of the Act which during the relevant period stood as under: 23. Payment and recovery of tax. (1) . . . (3) If the tax or any other amount assessed or due under this Act is not paid by any dealer or other person within the time prescribed therefor in this Act or in any rule made thereunder and in other cases within the time specified therefor in the notice of demand or within the time allowed for its payment by the appellate or revisional authority, as the case may be, or if payment is permitted in instalments by any of the authorities empowered in this behalf, any such instalment is not paid within the time specified therefor, the dealer or other person shall pay, by way of penal interest, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f-assessment scheme, the statute provides for regular and provisional assessment of tax and based on the same, the assessing officer is free to demand further tax from the dealers. Default in payment of tax pursuant to assessment and notice of demand is covered by situation (1) above stated which attracts interest. Besides tax liability, registration fee, penalty, interest, licence fee, compounding, etc., are also payable under various provisions of the Act. Default in voluntary payment of these amounts, that is any other amount other than tax on due date wherever provided is covered by situation (4) above that attracts interest. Wherever computation or determination of such liability is required, default arises after such determination and service of demand and default in such cases is covered by situation (2) above referred that attracts interest. In these cases, the specific case of the petitioners is that tax assessed or due under the Act means tax due along with monthly or final returns filed or the tax assessed and demanded by the Department. According to the petitioners, the petitioners did not disclose taxable turnover by including excise duty in the monthly returns or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners before us. In this judgment, this court following the earlier Division Bench decision in Miracle Elastomer (India) Ltd. v. Commissioner of Commercial Taxes [2007] 10 VST 493; [2006] 2 KLJ 105, held that if tax due and payable under the Act is not paid, the same attracts interest. The contention raised by the Government Pleader is that interest is payable for the whole period and continued default after Full Bench judgment should be termed as deliberate evasion warranting not only levy of interest but penalty as well. After hearing both sides and after going through the two judgments of this court referred above, we feel all the judgments relied on by the petitioners were considered by this court in the above judgments. This court held that if the tax due under the Act is not paid, interest under section 23(3) is attracted. Therefore the question to be considered is what is the tax due under the Act. The contention of the petitioners is that until assessment tax due under the Act is what is declared as due by them in the monthly and annual returns filed by them. We are unable to accept this contention, because the tax due under the Act means tax due under the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rns filed in January, 1993 onwards. O.Ps. and S.T. Rv stand allowed in part by deleting levy of interest for periods up to monthly return filed till December, 1992, that is up to monthly return filed for November, 1992 and by sustaining the interest levied for the remaining period of default. The challenge in the remaining petitions is against the levy of penalty under section 45A of the KGST Act. Penalty is now reduced by the Commissioner in all the cases to 25 per cent of the tax amount attributable to excise duty. The petitioners have contended that all of them are public sector companies under the control of the Central Government and the contest made by them was bona fide and contumacious, dishonest or fraudulent conduct cannot be attributed to them for the bona fide contest against liability on excise duty. They have relied on the decision of the Supreme Court in Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 and the decision of this court in P.D. Sudhi v. Intelligence Officer, Agricultural Income-tax and Sales Tax, Mattancherry [1992] 85 STC 337. It is to be noted that the Supreme Court and this court have taken the view that penalty is not for technical breach ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
