1996 (3) TMI 496 - AT - VAT and Sales Tax

Summary

Issues:
Interpretation of section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 in relation to the payment of interest on belated tax payment under different circumstances.

Analysis:
The case involved an assessee under rule 18 of the Tamil Nadu General Sales Tax Rules, 1959, who believed that the purchase tax payable was covered by the Interest Free Sales Tax Deferral Scheme, leading to non-payment of the tax. A notice of demand was later issued for belated payment of tax under section 24(3) of the Act. The petitioner contended that no tax was payable unless an order of assessment was made by the officer to the best of his judgment. The key issue was whether section 24(3) could be invoked in the absence of an assessment order under section 13(3) during the period of the High Court stay.

The Tribunal analyzed the provisions of section 13(3) which allow the assessing authority to determine tax payable by the dealer to the best of its judgment if no return is submitted or if the return appears incomplete or incorrect. It was noted that the tax becomes due and payable only after an order of assessment is made under section 13(3). In this case, no assessment was made during the High Court stay period. The assessment was eventually made under section 12 after the dismissal of the writ petition, and the tax amount was voluntarily paid by the assessee.

The Tribunal concluded that section 24(3) can be invoked only after the date of the order of assessment. Since the returns claiming the benefit of the scheme were not accepted, and the assessment was made under section 12, the impugned notice of demand was set aside. The Tribunal allowed the petition, but left it open for the Revenue to initiate fresh proceedings if necessary. The order emphasized that the impugned notice was not valid in the given circumstances and clarified the correct application of the relevant provisions of the Act.

In summary, the judgment clarified the interplay between sections 13(3), 12, and 24(3) of the Tamil Nadu General Sales Tax Act, 1959, in determining the tax liability and the payment of interest on belated tax payments. It highlighted the importance of proper assessment procedures and the timing of invoking interest provisions under the Act. The decision provided clarity on the legal obligations of the assessee and the Revenue in such situations, ensuring a fair application of the tax laws.