2013 (2) TMI 706 - HC - VAT and Sales Tax

Whether contents of all the vats should be taken together for computing the percentage of the wastageor the contents of each vat should be taken separately

Summary

Issues:
1. Dispute over the method of computation of wastage of Extra Neutral Alcohol.
2. Challenge against the demand of interest by the appellant.
3. Applicability of Section 6 of the Revenue Recovery Act vs. Section 3 of the Interest Act.

Analysis:
1. The judgment addresses a dispute between a distillery and the Excise Department regarding the computation of wastage of Extra Neutral Alcohol. The appellant argued for a combined computation of all vats, while the respondents insisted on separate vat computation. The court upheld the petitioner's claim for adjustment of amounts due from the respondents, directing a reassessment by the 2nd respondent. It was decided that interest, if applicable, should follow the provisions of Section 6 of the Revenue Recovery Act.

2. The appellant challenged the demand for interest, arguing that interest should only be payable from the date of a specific demand as per Section 3 of the Interest Act. The court disagreed, stating that the Revenue Recovery Act governs the case, allowing for interest on the principal amount. The court emphasized the need for the appellant to compensate the State for the delay in payment, justifying the interest under Section 6 of the Revenue Recovery Act. Consequently, the writ appeal was dismissed.

3. The judgment clarifies that the Revenue Recovery Act applies to the case, allowing for the recovery of interest on the principal amount. The court highlighted the obligation of the appellant to compensate for the loss incurred by the State due to delayed payment, justifying the imposition of interest as per Section 6 of the Revenue Recovery Act. The court rejected the appellant's argument that Section 3 of the Interest Act should prevail, emphasizing the State's right to claim interest under the Revenue Recovery Act.