TMI Blog2007 (4) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... e liability of the respondent-assessee accrued each year, therefore, there is no question of the Department paying interest @ 18% on the tax collected by the assessee during the aforestated period. The tax was collected by the assessee from its customers as an agent for the Government. The assessee is allowed to retain that amount which has accrued to the account of the State Government. Therefore, the question of payment of interest under the Deferment Scheme does not arise. This reasoning appears to be the basis for the Scheme for not providing for the payment of interest. Appeal allowed in part by setting aside the directions of the High Court to the State to refund the amount of the tax collected from 30-4-1997 to 20/21-12-2001 with int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,807/-. Consequently, assessee seeks refund of the tax amount paid by him during the period 30-4-1997 to 29-9-2001. This claim has been granted by the impugned judgment. Hence this civil appeal by the Department. 2. The short question which arises for determination in this case is whether the Department was liable to pay interest @ 18% p.a. on Rs. 42,62,807/- from 21-12-2001 till refund/adjustment. 3. At the outset it may be noted that the entitlement of the assessee to the grant of benefit of tax deferment is not in issue. The quantum of the benefit is not in dispute. Similarly, the period commencing from 30-4-1997 to 29-4-2004 is also not in dispute. Under the Deferment Scheme read with Punjab General Sales Tax (Deferment and Exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the above test the High Court has erred in granting interest @ 18% per annum for the aforestated period. Assessee has relied upon the provision of Section 12 of Punjab General Sales Tax Act, 1948 for refund. That Section states that the assessing authority shall in the prescribed manner refund to a registered dealer applying in this behalf any amount of tax, interest or penalty paid by such dealer if the amount of tax paid was in excess of the amount due under the Act. Section 12 is preceded by Section 11 which deals with assessment of tax. In the present case we are not concerned with regular assessment of tax. The assessment proceedings under the Act proceeds on the basis that if the tax paid by the dealer on his returns (declared turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of sale price. It forms part of his turn over for the stipulated period. Under the Scheme the liability to pay tax by the assessee accrues each year but the payment of tax is deferred. On expiry of seven years the assessee has to pay back the tax collected by it during 7 years. It is a sort of a loan given by the State to the assessee so that the assessee can use the tax amount to meet its working capital requirement. As stated the liability of the respondent-assessee accrued each year, therefore, there is no question of the Department paying interest @ 18% on the tax collected by the assessee during the aforestated period. The tax was collected by the assessee from its customers as an agent for the Government. The assessee is allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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