1981 (8) TMI 201 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to imposition of interest on arrears of tax under the Central Sales Tax Act.
Validity of interest charged under sections 8(1) and 8(1-B) of the U.P. Sales Tax Act for assessments under the Central Sales Tax Act.

Analysis:
The petitioner submitted quarterly returns for assessment under the Central Sales Tax Act for the year 1975-76. The Sales Tax Officer assessed the turnover, imposed tax, and directed a demand notice for the unpaid amount. The petitioner challenged the imposition of interest, claiming the Sales Tax Officer did not credit the tax already deposited. The Court noted the direction to give relief upon proof of larger tax payment and rejected this ground due to lack of evidence. The vires of section 8(1) of the U.P. Sales Tax Act were also challenged, but the Court negated this based on a previous judgment. No arguments were presented on the challenge based on constitutional articles.

The main contention was the jurisdiction of the Sales Tax Officer to impose interest on arrears of tax under the Central Sales Tax Act using sections 8(1) and 8(1-B) of the U.P. Sales Tax Act. The petitioner argued that the Central Sales Tax Act lacked a provision for interest charge. The counsel cited precedents to support this argument. However, the standing counsel contended that after a retrospective amendment in section 9(2) of the Central Sales Tax Act, the previous precedents were no longer applicable.

The Court examined the impact of the amendment in section 9(2) by the Central Sales Tax (Amendment) Act, 1976. The validating provision in section 9(4) sought to validate interest charges under State law provisions. The Court analyzed the amended section 9(2) and concluded that the amendment incorporated provisions for charging interest, aligning with sections 8(1) and (1-B) of the State law. Therefore, the Court dismissed the petition, upholding the interest charge under the U.P. Sales Tax Act for assessments under the Central Sales Tax Act. The order also applied to other related writ petitions.

In conclusion, the Court dismissed the petition challenging the imposition of interest on arrears of tax under the Central Sales Tax Act. The judgment clarified the jurisdiction of the Sales Tax Officer to charge interest using provisions of the U.P. Sales Tax Act, as validated by the amendment in the Central Sales Tax Act. The Court's analysis emphasized the alignment of interest charging provisions between State and Central laws, leading to the rejection of the petitioner's claims.