2020 (11) TMI 155 - HC - VAT and Sales Tax

Levy of Interest on belated payment of tax - belated filing of returns - Section 24(3) of the TNGST Act read with Section 9(2-A) of the Central Sales Tax Act, 1956 - HELD THAT - As per Section 24(3- A) of TNGST Act, a dealer who files the prescribed return, after the expiry of the prescribed period, but within 10 days from the expiry thereof is required to pay interest at 2% of the tax payable for every month or part thereof. It is abundantly clear that the liability to pay interest under Section 24(3-A) is triggered if the return is not filed on the prescribed date - However, this provision applies only if the return is filed belatedly but within 10 days from the expiry of the prescribed period. The prescribed period in these cases is the 12th of the succeeding calendar month and the learned Additional Government Pleader does not dispute the fact that the returns were filed on or before the 20th of the succeeding calendar month, which is within 10 days from the prescribed last date. Therefore, Section 24(3-A) undoubtedly applies to these cases. On account of the above position, we conclude that the apposite provision, in this case, is Section 24(3-A) rather than Section 24(3). Once Section 24(3-A) is held to be applicable, the challenge to the impugned orders is not sustainable and these orders are not liable to be interfered with except to the limited extent of holding that the relevant provision in these cases is Section 24(3-A) and not Section 24(3). In this regard, the settled position is that an order is not vitiated merely because a wrong provision of law is cited therein provided the relevant statute contains an appropriate provision for such purpose. The writ petitions are disposed of by affirming the liability to pay interest, albeit in terms of Section 24(3-A) of the TNGST Act read with the relevant provision of the CST Act, where applicable.

Issues Involved:
1. Applicability of Section 24(3) of the TNGST Act.
2. Applicability of Section 24(3-A) of the TNGST Act.
3. Interpretation of Rule 18(2) of the TNGST Rules.
4. Relevance of the Supreme Court judgment in EID Parry.
5. Liability to pay interest for belated filing of returns and payment of tax.

Issue-wise Detailed Analysis:

1. Applicability of Section 24(3) of the TNGST Act:
The petitioner contended that Section 24(3) of the TNGST Act is not applicable in this case. Section 24(3) is triggered only if any amount remains unpaid after the date specified for its payment as per sub-section (1) of Section 24. Section 24(1) deals with two situations: self-assessment and assessment by the tax department. The petitioner argued that since no assessment was undertaken by the tax authorities, Section 24(3) should not apply. The court examined Section 24(3) and concluded that it provides for the payment of interest on amounts remaining unpaid after the date specified for payment as per Section 24(1). Since no assessment was carried out, the second limb of Section 24(1) does not apply.

2. Applicability of Section 24(3-A) of the TNGST Act:
The petitioner argued that Section 24(3-A), introduced by an amendment in 1999, should apply. Section 24(3-A) stipulates that if a dealer submits the prescribed return within 10 days after the expiry of the prescribed period, they shall pay interest at 2% of the tax payable for every month or part thereof. The petitioner submitted returns and paid taxes within 10 days from the 12th of the succeeding calendar month, falling within the scope of Section 24(3-A). The court agreed and concluded that Section 24(3-A) applies in this case, rather than Section 24(3).

3. Interpretation of Rule 18(2) of the TNGST Rules:
Rule 18(2) of the TNGST Rules was amended to require dealers with a taxable turnover of ?200 crore or more in the previous financial year to file their monthly returns on or before the 12th of the succeeding calendar month. The petitioner failed to submit the returns by the 12th but did so by the 20th. The court noted that the petitioner's turnover was in excess of ?200 crore, and therefore, the returns were required to be filed on or before the 12th. The court examined Rule 18(2) and concluded that the petitioner is liable to pay interest due to the belated filing of returns.

4. Relevance of the Supreme Court judgment in EID Parry:
The petitioner relied on the Supreme Court judgment in EID Parry, where it was held that self-assessment tax is payable only when the returns are filed and not prior to such date. The court noted that EID Parry involved a controlled commodity (sugar) with complex price fixation. The Supreme Court concluded that interest was not payable as per Section 24(3) of the TNGST Act in that context. However, the court found that this judgment does not advance the petitioner's cause, as both the filing of the return and the payment of tax were after the prescribed date in the present case.

5. Liability to pay interest for belated filing of returns and payment of tax:
The court examined the relevant provisions, including Section 13(2) and Section 24(3-A). It concluded that the liability to pay interest under Section 24(3-A) is triggered if the return is not filed on the prescribed date but is filed within 10 days from the expiry of the prescribed period. Since the returns were filed on or before the 20th of the succeeding calendar month, Section 24(3-A) applies. The court affirmed the liability to pay interest in terms of Section 24(3-A) of the TNGST Act read with the relevant provision of the CST Act, where applicable.

Conclusion:
The court disposed of the writ petitions by affirming the liability to pay interest, albeit in terms of Section 24(3-A) of the TNGST Act. The orders were not interfered with except to the extent of holding that the relevant provision is Section 24(3-A) rather than Section 24(3). There was no order as to costs, and miscellaneous petitions, if any, were closed.

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