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2016 (7) TMI 773 - GUJARAT HIGH COURT

2016 (7) TMI 773 - GUJARAT HIGH COURT - TMI - Levy of interest u/s 47(4A) of Gujarat sales tax - Levy of penalty u/s 45(6) - the dealer at the time of filing of the sales tax return had not deposited the entire amount payable thereunder - but the amount was paid before the sales tax assessment - Held that:- In the present case, since the dealer had already paid the entire amount prior to the date of the assessment order, the dealer was liable to pay interest on the differential amount till the d .....

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ference of tax assessed and tax paid. It is in these circumstances that the Tribunal has exercised discretion and reduced the penalty to 10%. In the light of the fact that the order passed by the Tribunal is merely a discretionary order, in the opinion of this court, the same would not give rise to any question of law warranting interference. - Decided against the revenue. - Tax Appeal No. 865 of 2015 - Dated:- 18-3-2016 - Harsha Devani And G. R. Udhwani, JJ. For the Appellant : Mr Chintan Dave .....

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hether the Hon ble Tribunal is right in law in holding that interest under section 47(4A) of the Act is not leviable till the date of assessment order? (2) Whether the Hon ble Tribunal is right in law in holding that interest under section 47(4A) of the Act is not leviable if difference between tax assessed and tax paid is less than 10%? (3) Whether the Hon ble Tribunal is right in law in reducing penalty levied under section 45(6) of the Act to 10%? 2. The facts of the case are that an assessme .....

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ble under the assessment order. The first appellate authority observed that the dealer had not paid the amount of ₹ 7,47,032/- in the relevant month of the year but had paid the same at a time on 22.5.1994 and 5.6.1994 and was of the view that such payment cannot be said to have been made with the returns and that such payment could be given deduction as tax, but could not be taken into account for the purpose of interest and penalty. According to the first appellate authority, if the inte .....

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ent giving the dealer a relief of ₹ 17,026/-. The order passed by the first appellate authority came to be challenged by the dealer before the Tribunal in the above referred second appeal. The Tribunal held that the dealer was not liable to pay interest under section 47(4A)(b) of the GST Act for the period after the date of payment of the total amount of tax due and having found the explanation given by the dealer to be acceptable, the Tribunal in exercise of discretionary powers reduced t .....

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escribed for payment of tax under sub-section (1), (2) or (3) and ending on date of order of assessment, reassessment, or, as the case may be, revision, simple interest at the rate of eighteen per cent per annum on the amount of tax not so paid or any less amount thereof remaining unpaid during such period. It was submitted that, therefore, the said provision provides that the interest on the differential amount of tax shall be payable from the date and the time prescribed for payment of tax und .....

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A) of section 47 of the GST Act. 3.1 As regards proposed question No.3, the learned Assistant Government Pleader submitted that the Sales Tax Officer had exercised discretion and imposed penalty and that merely because the Tribunal found the explanation to be bonafide, there was no warrant for decreasing the amount of penalty to 10%. It was submitted that a bonafide belief held by the dealer that he was not liable to deposit such amount cannot be considered to be a reasonable cause for not impos .....

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deposited the entire amount payable thereunder. Such amount came to be deposited at later dates on 22.5.1994 and 5.6.1994. The Sales Tax Officer thereafter, passed an assessment order raising a demand of ₹ 8,22,589/-, which amount was already paid by the dealer prior in point of time to the passing of the assessment order. It is the case of the appellant that to the extent of difference of the amount paid at the time of filing the return and the amount as assessed under the assessment ord .....

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tion 40, shall first pay into a Government treasury, in the manner prescribed, the whole amount of tax due from him according to such declaration or return along with the amount of any penalty payable by him under section 45. (3) A Registered dealer furnishing a revised declaration or revised return in accordance with sub-section (3) of section 40 which revised declaration or revised return shows that a larger amount of tax than already paid is payable, shall first pay into a Government treasury .....

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eriod. (b) Where the amount of tax assessed or reassessed for any period, under section 41 or section 44, subject to revision if any under section 67, exceeds the amount of tax already paid by a dealer for that period, there shall be paid by such dealer, for the period commencing from the date of expiry of the time prescribed for payment of tax under sub-section (1), (2) or (3) and ending on date of order of assessment, reassessment, or, as the case may be, revision, simple interest at the rate .....

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der section 45 at the time of furnishing declarations or returns. Sub-section (3) requires that when the revised return filed by the registered dealer shows that a larger amount of tax than that already paid is payable, he shall pay such amount in the Government treasury while furnishing a revised declaration or revised return in accordance with sub-section (3) of section 40 of the GST Act. Sub-section (4A)(a) of section 47 of the GST Act provides that where a dealer does not pay the amount of t .....

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a dealer who has not paid the amount of tax as prescribed under sub-sections (1), (2) or (3) is required to pay interest on the differential amount of tax till the date of payment of such amount. Therefore, the dealer would be liable to pay interest from the time prescribed under sub-section (1), (2) or (3) of section 47, as the case may be, till the date of payment of the amount of tax, simple interest at the rate of eighteen per cent per annum. Adverting to the facts of the present case, the .....

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or section 44 exceeds the amount of tax already paid by a dealer for that period, there shall be paid by such dealer, for the period commencing from the date of expiry of the time prescribed for payment of tax under subsections (1), (2) or (3) and ending on the date of order of assessment, reassessment, or, as the case may be, revision, simple interest at the rate of eighteen per cent per annum on the amount of tax not so paid or any less amount thereof remaining unpaid during such period. Ther .....

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mount as contemplated under clause (a) of sub-section (4A) of section 47 is already paid, the same is not required to be taken into consideration and the difference of amount paid on the prescribed date on the amount assessed has to be taken into consideration and the dealer is liable to pay interest from the prescribed date till the assessment order on the entire differential amount as contended by the appellant, inasmuch as, the same would then render the provisions of clause (a) of sub-sectio .....

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47 of the GST Act, it is evident that if any amount is paid subsequent to the prescribed date but prior to the order of assessment, the dealer would be liable to pay interest at the rate of eighteen percent on the differential amount from the prescribed date till the date of payment of such amount. However, if the amount under the assessment order is more than the amount already paid by the dealer, to the extent of the amount which exceeds the amount already paid by the dealer, he would be liab .....

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