TMI Blog2015 (3) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... to be noted that at the time of passing Ext.P2 revised assessment order, the provisions providing for the levy of interest, for a delay in payment of tax, had already come into force through the 1991 Act. Further, by way of the transitional provisions contained in the 1991 Act, all proceedings initiated under the earlier enactment had to be deemed as proceedings under the later enactment for the purposes of assessment and recovery of tax. In that view of the matter, therefore, the levy of interest for the period from November, 1998 to May, 2006, when Ext.P2 order was passed, cannot be said to be illegal. Reference to sub section (5) of Section 99 is only in respect of arrears pursuant to assessments that were concluded prior to the coming into force of the 1991 Act. The said provision is an enabling provision that enables the State Government to recover taxes, that became due and payable under the earlier enactment, subsequent to the repealing of the said enactment and the passing of the new enactment. In the case of proceedings that were pending at the time of coming into force of the 1991 enactment, it is the provision of sub section (1) of Section 99 that would apply, to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand notice already issued to the petitioner, pursuant to Ext.P1 assessment order dated 27.3.1993, stands modified to the extent contemplated in Ext.P2 order. It would appear that against Ext.P2 order, the petitioner preferred an appeal before the First Appellate Authority, who dismissed the appeal. A further appeal was preferred before the 2nd respondent Appellate Tribunal, which, by Ext.P6 order, modified the orders passed by the authorities below to the extent of adopting the rate of tax applicable as 55%, in lieu of 60% that was adopted by the lower authorities. The contention of the petitioner with regard to the legality of the levy of interest in terms of the Agricultural Income Tax Act, 1991, when the assessment was done pursuant to the Agricultural Income Tax Act of 1950, was rejected by the 2nd respondent Tribunal in Ext.P6 order. Aggrieved by Ext.P6 order of the Tribunal, to the extent it did not accept the contention of the petitioner with regard to the legality of the levy of interest, the petitioner preferred a rectification application before the Tribunal. In Ext.P8 order, passed by the Tribunal in the rectification petition, the Tribunal found no reason to interfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o cited by the learned counsel for the petitioner. No doubt, as rightly pointed out by counsel for the petitioner, the law that applies for the purposes of assessment under the Agricultural Income Tax Act is the law that is in force as on the 1st day of April in the year of assessment and the assessment of the petitioner for the said assessment year would have to be completed on the basis of the said law. As a matter of fact, the law that was applied to complete the assessment of the petitioner was the law that applied as on the first day of April in the year of assessment. The petitioner, however, contends that the levy of interest was also to be governed by the law in force as on that date. It is relevant to note, in that connection, that the levy of interest is attracted only when there is a non-payment of tax that is assessed. The law that governs the levy of interest must therefore be the law that is in force when the delay in payment of tax is occassioned. It is not in dispute in the instant case that the assessment proceedings, which had been initiated pursuant to the filing of return by the assessee at a point of time when the Agricultural Income Tax Act, 1991 had not yet c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the said Act. (4) Notwithstanding such repeal of the Agricultural Income Tax Act, 1950 (Act XXII of 1950), any proceedings pending before any Agricultural Income Tax Authority, Appellate Tribunal or High Court at the commencement of this Act, shall be continued and finally decided or determined under the provisions of that Act. (5) Any arrears of tax or other amount pending and any recovery proceedings initiated or continued shall be continued as if the levy, collection and recovery are made or is continuing under the provisions of this Act and provisions of this Act relating to penalty and interest shall apply to such arrears of tax, or other amount which are in arrears at the commencement of this Act. It will be apparent from a reading of the said provision that the repeal of the Agricultural Income Tax Act, 1950 did not affect the previous operation of the said Act or anything done or any action taken, including any notice, order issued in exercise of any power conferred by or under the said Act and the same was deemed to have been done or taken in exercise of the powers conferred by under the 1991 Act. As already noticed, in the instant case, the proceedings th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the reference to sub section (5) of Section 99 is only in respect of arrears pursuant to assessments that were concluded prior to the coming into force of the 1991 Act. The said provision is an enabling provision that enables the State Government to recover taxes, that became due and payable under the earlier enactment, subsequent to the repealing of the said enactment and the passing of the new enactment. In the case of proceedings that were pending at the time of coming into force of the 1991 enactment, it is the provision of sub section (1) of Section 99 that would apply, to deem those proceedings as proceedings under the 1991 Act for the purposes of assessment and effecting recovery of tax thereafter. In that view of the matter also, I am of the view that the levy of interest on the amounts found due and payable by the petitioner in the instant case cannot be found fault with. Lastly, I must deal with the contention of the learned counsel for the petitioner that there was no demand notice served on the petitioner prior to levying interest for the delayed payment of tax. As already noted, while finalising the assessment, the respondents had issued a demand notice demandin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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