2005 (2) TMI 798 - HC - VAT and Sales Tax

Summary

Issues:
1. Imposition of penalty under the West Bengal Sales Tax Act, 1954.
2. Appeal against the penalty order and subsequent revision.
3. Application for refund of penalty amount.
4. Denial of interest on the refunded penalty amount.
5. Writ application challenging the denial of interest.

Analysis:
1. The judgment dealt with the imposition of a penalty under section 7(2) of the West Bengal Sales Tax Act, 1954. Initially, a penalty of Rs. 1,62,500 was imposed, which was later reduced to Rs. 1 lakh. The petitioner appealed against this order, but the appeal was dismissed by the Assistant Commissioner of Commercial Taxes. Subsequently, a revision application was filed, which was allowed by the West Bengal Commercial Tax Tribunal, holding the seizure to be illegal and the penalty imposed as bad in law.

2. Following the Tribunal's decision, the petitioner applied for a refund of the penalty amount under rule 30(2) of the West Bengal Sales Tax Rules, 1954. Despite repeated requests, the refund was delayed, leading to the petitioner seeking interest on the refunded amount. The West Bengal Taxation Tribunal, however, denied the petitioner's claim for interest, stating that the rule did not provide for interest on refunded amounts.

3. The petitioner then filed a writ application challenging the denial of interest. The court, after considering the submissions, held that the petitioner should be paid interest on the penalty amount due to the authorities retaining the amount without proper explanation after the revision application was allowed. The court directed the respondents to pay simple interest on the penalty amount between the date of dismissal of the review application and the actual refund date, at a rate of 6% per annum. Failure to comply would result in further interest at a rate of 12% per annum until payment.

4. In conclusion, the court disposed of the application with the direction for payment of interest on the penalty amount, excluding the period between the revisional order and the review application decision. No costs were awarded, and all parties were instructed to act on a signed copy of the order.