2015 (4) TMI 964 - HC - VAT and Sales Tax

Interest charged under Section 47(4)(a) of the Gujarat Sales Tax Act - Penalty u/s 45(6) - Held that - For the reasons stated in the said order and even otherwise, considering the provisions of Section 47(4)(a), it cannot be said that the learned Tribunal has committed any error in deleting the interest levied for the period between the payment of tax on ad-hoc basis till the order of assessment - once the dealer has made payment before the actual order of assessment, may be on ad-hoc basis, meaning thereby, the amount of tax due and payable as per the assessment order, already paid prior to the assessment order and the State/Department received the said amount of tax, there cannot be any interest levied during the aforesaid period. It cannot be disputed that levy of interest would be on delayed payment of tax due and payable. It is not the case that on finalization of the assessment, any amount more than the amount paid on ad-hoc basis, was assessed and/or required to be paid by the assessee. - No substantial question of law arises in this group of appeals - Decided against Revenue.

Summary

Issues:
1. Interpretation of Section 47(4)(a) of the Gujarat Sales Tax Act regarding the levy of interest.
2. Deletion of penalty levied under Section 45(6) of the Act.

Analysis:
The judgment by the Gujarat High Court addressed a group of appeals challenging a common judgment by the Gujarat Value Added Tax Tribunal. The Tribunal had partly allowed the appeals by modifying the interest charged under Section 47(4)(a) of the Gujarat Sales Tax Act. The State of Gujarat - Revenue appealed the decision, questioning the Tribunal's ruling on the levy of interest and the deletion of penalty under Section 45(6) of the Act.

Upon hearing the appeals, the Court noted that a similar issue had been considered by a Division Bench in a previous case, where the interest liability was reduced. The Court upheld the Tribunal's decision to delete the interest levied between the period of tax payment on an ad-hoc basis and the order of assessment. The Court found no error in the Tribunal's decision based on the provisions of Section 47(4)(a) of the Act.

The Court analyzed Section 47(4)(a) which pertains to the amount of tax due, assessed, or provisionally assessed. It emphasized that if the dealer had made payment before the assessment order, even on an ad-hoc basis, and the State had received the tax amount, no interest could be levied during that period. The Court clarified that interest is typically levied on delayed tax payments, and since no additional tax was assessed post the ad-hoc payment, no interest should apply for that interim period.

Consequently, the Court agreed with the Tribunal's decision to delete the interest levy during the period between the ad-hoc tax payment and the assessment order, leading to the deletion of the penalty under Section 45(6) of the Act. The Court concluded that no substantial question of law arose in the appeals, leading to the dismissal of all appeals.

In light of the dismissal of the appeals, the original jurisdiction civil applications in the respective appeals were disposed of accordingly.