2005 (7) TMI 631 - HC - VAT and Sales Tax

Summary

Issues:
- Dispute over liability to pay interest on Central sales due to non-filing of form C
- Interpretation of Section 8 of the U.P. Sales Tax Act
- Precedents regarding liability for interest on unpaid tax amounts
- Impact of non-filing of form C on tax liability and interest payment

Analysis:
The case involved a revision against an order by the Trade Tax Tribunal regarding the liability to pay interest on Central sales due to non-filing of form C by the dealer. The Tribunal had ruled in favor of the dealer, stating that interest was not payable. The dispute centered around Section 8 of the U.P. Sales Tax Act, which outlines the payment and recovery of tax, including provisions for interest on unpaid amounts. The Act defines "tax admittedly payable" as the tax due on sales turnover as disclosed in the dealer's accounts or returns, whichever is later. The burden lies on the dealer to file requisite forms to claim concessional rates of tax, and failure to do so results in liability for the normal tax rate.

The judgment referenced various precedents to support the interpretation of Section 8 and the consequences of non-filing of form C. In the case of Ram Sahai Dal Mills, it was held that failure to file necessary declarations resulted in admitted tax liability. Similarly, in Annapurna Biscuit Manufacturing Co., it was emphasized that interest liability is not affected by the deposit of assessed tax within the specified time, and the dealer must prove the crucial facts, such as filing required forms, to determine tax payable accurately.

Further, the judgment cited the Supreme Court's decision in Commissioner of Sales Tax v. Qureshi Crucible Centre, which clarified that non-payment need not be mala fide for interest to apply, and the tax due is based on the return filed by the dealer. Additionally, the case of Indian Herbs Research and Supply Company highlighted that failure to fulfill statutory requirements for tax exemption leads to interest payment on the unpaid tax amount calculated without considering the exemption claim.

The judgment also discussed the impact of amendments to the Central Sales Tax Act on interest liability. It referenced the case of India Carbon Ltd. v. State of Assam, which emphasized that interest provisions can only be applied if substantively provided for in the Central Act. The subsequent amendment and validation clause in the Central Sales Tax Act were upheld in the case of Kajaria Ceramics Ltd., confirming the liability for outstanding interest on unpaid Central sales tax.

In conclusion, the High Court allowed the revision, setting aside the Tribunal's order and dismissing the dealer's appeal. The judgment underscored the importance of complying with statutory requirements, filing necessary forms, and accurately determining tax liability to avoid interest payments on unpaid amounts.