9911796707
TMI Blog1994 (1) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... f the date of the said judgment. The petitioner did not deposit the sum of Rs. 25,000 as directed in O.P. No. 546 of 1983 within time. The Assistant Commissioner (Assessment), Sales Tax, thereupon issued the notice exhibit P1 dated March 2, 1983 to the petitioner informing him that he has failed to comply with the directions issued by the High Court in O.P. No. 546 of 1983 and calling upon him therefore to pay the entire arrears for the assessment year 1978-79 with penal interest before March 10, 1983, threatening coercive process on his failure to pay the entire arrears. Meanwhile the petitioner sent exhibit P2 letter to the Assistant Commissioner of Sales Tax along with a cheque for Rs. 25,000 stating that the payment was in compliance with the directions of the High Court in O.P. No. 546 of 1983 and further informing the authority that the petitioner has filed a petition for extension of time and orders were being awaited on that application. It was also stated that an order in that behalf will be produced before the authority as soon as such an order was obtained. The petitioner had filed C.M.P. No. 6400 of 1983 in O.P. No. 546 of 1983 for extension of time as indicated in exhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter dated March 21, 1983 to the Assistant Commissioner of Sales Tax (Assessment). It pointed out that the High Court had extended the time for deposit and the amount having been deposited within the extended time, the balance tax due for the assessment year 1978-79 could not be recovered before the disposal of the appeal relating to the year 1978-79. It was, therefore, submitted that the adjustment ordered under exhibit P5 on the basis that the entire amount of tax for the assessment year 1978-79 could be recovered since there was no stay of recovery was erroneous and requesting the Assistant Commissioner of Sales Tax (Assessment) to refund the sum of Rs. 23,364 which had been adjusted. It was pointed out that the authority had no right to adjust it as done in the light of the High Court decision. In reply, the petitioner received exhibit P7 dated March 25, 1983, informing the petitioner that the Sales Tax Officer, IV Circle, Calicut, had been given instruction to refund the sum of Rs. 23,364 thus accepting the stand adopted by the petitioner in his communication, exhibit P6. 3. Meanwhile the petitioner filed his return for the month of September, 1983. Since the amount ordere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to him by way of refund, it cannot be taken that he has not paid the admitted tax along with his return for the month of September, 1983. The 2nd respondent took the view that against the notice in form No. 24 issued to the petitioner in terms of section 23(3) of the Act no refund would lie under section 36 of the Act. On the facts the 2nd respondent took the view that it was not open to the assessee to suo motu adjust the sum of Rs. 23,364. But it is seen that no definite finding as such was entered by the 2nd respondent in that behalf since the 2nd respondent proceeded to decide the question of the maintainability of the revision first and on finding the revision not to be maintainable, dismissed the same. It is this decision of the 2nd respondent that is challenged by the petitioner in this original petition. 5.. Section 23 of the Act deals with the payment of tax and the recovery thereof. Section 23(3) of the Act as it stood at the relevant time read as follows: "If the tax assessed or any other amount due under this Act or any instalment thereof is not paid by any dealer or other person within the time specified therefor in the notice of demand or in the order permitting pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 23(3) and rule 21(7) read with rule 31 of the Rules. Form No. 14D, as also form No. 24, provided by the Rules to the extent they militate against the statutory provisions, section 23(1) read with section 23(3) of the Act, and rules 21(7) and 31 of the Rules should bow down to the parent provisions. The implication sought to be made out, by a reference to form No. 14D and form No. 24, that the service of a notice of demand is a pre-requisite for levy and recovery of penal interest under section 23(3) of the Act, is not acceptable. It will be contrary to section 23(1) read with section 23(3) of the Act and also rules 21(7) and (10) and 31 of the Rules. Such statutory provisions should prevail in preference to the entries in the statutory forms." This Court also proceeded to hold that a notice of demand is not an essential pre-requisite for the levy and collection of penal interest. Thus, the principle laid down in Haridas case [1979] 44 STC 26 (Ker) was affirmed. In the order exhibit P12 the 2nd respondent has followed the decision in Haridas case [1979] 44 STC 26 (Ker) and has distinguished the decision in Joy Varghese's case [1986] 62 STC 227 (Ker) on the ground that what fell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he three stages contemplated by the statute. He also contends that in this case somebody had to determine while seeking to recover the penal interest as to whether the petitioner was really liable to pay the penal interest in terms of section 23 of the Act and in a case where there is such a determination or there is an implied adjudication to support the issuance of a notice in form No. 24, it has certainly to be construed as a proceeding so as to enable the assessee to file a revision before the revisional authority. On the facts of this case he submits that the note contained in exhibit P11 itself amounts to a proceeding within the meaning of section 36 of the Act and hence the revision before the 2nd respondent-authority was perfectly maintainable. He also points out that the word "proceeding" is not defined as such and seeks support from the decision of the Federal Court reported in Governor-General in Council v. Shiromani Sugar Mills Ltd. (in Liquidation) AIR 1946 FC 16; [1946] 14 ITR 248 (FC) and also the decision reported in E.K. Ibrahim v. Joseph Joseph 1975 KLT 167. 7.. I find some substance in the contention that in a case where a question may arise as to whether the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the return should be accompanied by a crossed cheque or crossed draft for the full amount of tax payable on the taxable turnover for the month to which the return related. It is therefore not possible to accept the contention of the petitioner that the petitioner was entitled to adjust by itself the amount of Rs. 23,364 due to it by way of refund on another head. It has to be remembered that there was no order permitting him to adjust the amount towards the tax due for the assessment year 1983-84 or in respect of any particular month of that year. No doubt there was an order of refund to him and the amount was in fact due to him. But considering the scheme of the Act as explained in P.C. Abdulla's case [1992] 86 STC 259 (Ker) [FB]; 1992 KLJ (Tax Cases) 259 [FB] and the wording of rule 21(7) I am of the view that the stand adopted by the learned Special Government Pleader (Taxes) cannot be said to be unreasonable. In this context it has also to be remembered that the adjustment of the amount towards the tax due for the year 1978-79 had been effected in view of the failure of the petitioner to comply with the directions of this Court in O.P. No. 564 of 1983. Though he obtained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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