1979 (12) TMI 140 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the admitted tax for the purposes of section 9 of the U.P. Sales Tax Act, 1948, includes interest.
2. Whether appeals could be entertained when the admitted tax was deposited before filing the appeals but the interest was deposited afterward.

Issue-wise Detailed Analysis:

1. Whether the admitted tax for the purposes of section 9 of the U.P. Sales Tax Act, 1948, includes interest:

The main question was whether the interest payable under section 8(1-C) of the Act is to be treated as part of the admitted tax. Section 8(1-C) states, "The amount of interest payable under sub-sections (1) and (2) shall be without prejudice to any other liability or penalty that the dealer may incur under this Act or under any other law for the time being in force and shall be added to the amount of tax and be also deemed for all purposes to be part of the tax."

However, the court noted that the amendments made by the U.P. Sales Tax (Amendment and Validation) Act, 1975, including section 8(1-C), were not given retrospective effect. Thus, for the assessment year under consideration (1972-73), the interest could not be treated as part of the admitted tax. The right of appeal is a substantive right, and as per the Supreme Court in Garikapati v. Subbiah Choudhry, this vested right of appeal can be taken away only by a subsequent enactment if it expressly provides or by necessary intendment.

The court also referred to Commissioner of Sales Tax, U.P. v. Vijay and Company, which held that the entertainability of an appeal under section 9 is to be determined by reference to section 9 alone and not by reference to section 8. Therefore, it was concluded that the interest accrued on the tax admitted could not have been treated as a part of the admitted tax for the purposes of section 9.

2. Whether appeals could be entertained when the admitted tax was deposited before filing the appeals but the interest was deposited afterward:

Section 9 of the Act provides that no appeal against an assessment order shall be entertained unless the appellant has furnished satisfactory proof of the payment of the admitted tax. The term "entertained" was explained by the Supreme Court in Lakshmiratan Engineering Works v. Assistant Commissioner, Sales Tax, to mean "admitted to consideration." The court shall not proceed to admit to consideration an appeal which is not accompanied by satisfactory proof of the payment of the admitted tax.

In the present case, the admitted tax was deposited before the filing of the appeals, while the interest was deposited afterward. The court noted that if the interest were treated as part of the admitted tax, the appeals would be deemed properly filed only on the date when the interest was deposited. Since no application for condonation of delay was submitted under section 9(6) of the Act, the appeals would be barred by time.

However, the court concluded that since section 8(1-C) was not applicable to the assessment year under consideration, the interest could not be treated as part of the admitted tax. Therefore, the appeals were not barred by time as the admitted tax had been deposited before filing the appeals.

Conclusion:

The revisions were allowed, and the Assistant Commissioner (Judicial) was directed to entertain the appeals and dispose of them according to law. The assessee was entitled to costs assessed at Rs. 250 in each revision and counsel's fee in like figure, but of one set only.

Petitions allowed.

← Previous Next →