2012 (10) TMI 880 - SC - VAT and Sales Tax

Writ petition for payment of dues in installments and remission/waiver of interest - Held that - Amount of Rs.5,169/- crores towards principal amount of the dues be paid by the appellant with interest at the rate of 10% p.a. effective from 17th January, 2012 (the date of the judgment of this Court) in eight equal quarterly installments, the first of such quarterly installment being payable on 2nd January, 2013, and the remaining installments being payable every quarter on the 2nd day of the concerned month (i.e. after expiry of the quarter or three months) and interest of 10% p.a. would be calculated on the reducing balance remaining payable by the appellants to the State Government - appeal is allowed with no order as to costs.

Summary

Issues: Liability for Sales Tax/VAT dues, Payment in installments, Interest on tax amount

Liability for Sales Tax/VAT Dues:
The appellant company was held liable for the payment of dues towards Sales Tax/VAT to the State Government by a previous judgment. The company then approached the High Court for payment in installments and for remission of interest on the tax amount. However, the High Court dismissed the writ petitions, stating that the retention of the tax amount by the appellant was unauthorized. Subsequently, the appellants appealed to the Supreme Court through a Special Leave Petition under Article 136 of the Constitution of India.

Payment in Installments:
Upon hearing the parties, the Supreme Court directed the appellant to demonstrate its bonafide by making a payment of at least Rs.1,000 crores towards Sales Tax/VAT dues to the State Government. The appellant complied by paying the said amount, leaving a balance of Rs.5,169 crores to be paid towards the principal amount of the dues. The Court then ordered that the remaining balance be paid by the appellant in eight equal quarterly installments with interest at the rate of 10% p.a. effective from the date of the previous judgment.

Interest on Tax Amount:
The Supreme Court, after considering the arguments presented, set aside the High Court's order and directed the appellant to pay the balance amount with interest at 10% p.a. calculated on the reducing balance remaining payable to the State Government. The payment was to be made in eight equal quarterly installments, with the first installment due on a specified date and subsequent installments to be paid every quarter thereafter. The Court clarified that the interest would be calculated on the outstanding balance owed by the appellant.

In conclusion, the Supreme Court allowed the appeal, directing the appellant to pay the balance amount of Rs.5,169 crores towards Sales Tax/VAT dues in installments with interest, as specified in the judgment, and no costs were awarded in the matter.