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TMI Blog2007 (12) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... ed afresh and therefore, the question of providing an opportunity of issuing notice before the levy of penal interest does not arise. In view of the Full Bench decision of the Tamil Nadu Taxation Special Tribunal and the subsequent amendment, giving retrospective effect from April 1, 1970, the contention raised by the petitioner is not tenable.In the result, the writ petition is dismissed. - W.P. No. 12229,14299 of 2004 - - - Dated:- 3-12-2007 - MANIKUMAR S. , J. ORDER:- S. MANIKUMAR J. The petitioner has challenged the proceedings of the respondent dated April 21, 2004, in the light of the law laid down by the Supreme Court in India Carbon's case reported in [1997] 106 STC 460 and for further orders. Brief facts leading to the writ petition are as follows: The petitioner is a registered dealer dealing with lifts and lifts components and assessee on the files of the respondent. During assessment year 2002-03, the petitioner opted for payment of tax on works contract at compounded rates under section 7C of the Tamil Nadu General Sales Tax Act, 1959 (in short, the TNGST Act ) and remitted the same, vide monthly returns. However, in respect of the petitioner&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional sales tax, the provision, which provides for levy of penal interest under the TNGST Act, cannot be applied. As TNAST Act does not authorise the levy of penal interest for the belated payment of additional tax, the impugned proceedings, levying the penal interest under section 24(3) of the TNGST Act, are liable to be set aside. The petitioner has further contended that the unilateral decision of the respondent directing the petitioner to pay penal interest is contrary to the instructions of the Special Commissioner and Commissioner for Commercial Taxes dated April 20, 2001, wherein, instructions were given to the assessing officers to issue notice, proposing penal interest under section 24(3) of the TNGST Act and penalty should be imposed only after providing sufficient opportunity to the assessees and therefore, the impugned order is violative of the principles of natural justice. The respondent in his counter-affidavit has submitted that for the assessment year 2002-03, the petitioner was assessed to tax at Rs. 58,07,733, surcharge at Rs. 1,72,102 and additional sales tax at Rs. 10,59,632, vide proceedings dated February 26, 2007 under the TNGST Act. As there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, he submitted that as the additional sales tax was due for the months of April and May, 2002, the respondent has no jurisdiction to collect penal interest prior to insertion of Explanation V to section 2(1)(aa) of the TNAST Act, which came into effect from July 1, 2002, and section 3B of the TNAST Act does not provide for levy of penal interest for belated payment of additional sales tax. Mr. R. Mahadevan, learned Additional Government Pleader, referring to the judgment in E.I.D. Parry (India) Ltd. v. Assistant Commissioner (CT), CAC, Chennai reported in [1999] 113 STC 233 (TNTST), submitted that the issue relating to imposition of penal interest on the belated payment of additional sales tax is no more res integra and therefore, the impugned notice is well within the jurisdiction of the respondent. He further submitted that pursuant to the decision of this court in Wipro G.E. Medical Systems's case [W.P. No. 11632 of 1999, dated September 14, 2001], the Government have introduced an amendment to the Tamil Nadu Additional Sales Tax Act (Act 14 of 2005), by which, section 2(1)(aaa) has been inserted enabling the levy of penal interest, as specified in subsection (3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay interest as specified in sub-section (3) of section 24 of the said Act, in addition to such amount of additional tax or penalty due. Section 24(3) of the Tamil Nadu General Sales Tax Act, which provides for levy of penal interest, is extracted hereunder: On any amount remaining unpaid after the date specified for its payment as referred to in sub-section (1) or in the order permitting payment in instalments, the dealer or person shall pay, in addition to the amount due, interest at one-and-a-half per cent per month of such amount for the first three months of default and two per cent per month of such amount for the subsequent period of default: Provided that if the amount remaining unpaid is less than one hundred rupees and the period of default is not more than a month, no interest shall be paid: Provided further that where a dealer or person has preferred an appeal or revision against any order of assessment or revision of assessment under this Act, the interest payable under this sub-section, in respect of the amount in dispute in the appeal or revision, shall be postponed till the disposal of appeal or revision, as the case may be, and shall be calculated on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analysing the various provisions of the TNGST Act, 1959 and the Rules framed thereunder and the TNAST Act, 1970, the Full Bench of the Special Tribunal, at paragraphs 38, 39, 57, 62, 63 and 67, held as follows: 38. From the above provisions of Act and Rules quoted, it is quite clear that levy of additional sales tax as well as surcharge is by operation of law and it is corollary to the tax payable under the principal Act. The words 'said Act' occurring in section 2(1)(b) of the Tamil Nadu Additional Sales Tax Act, 1970 and in section 3(2) and section 3A(2) of the Tamil Nadu Sales Tax (Surcharge) Act, 1971 refer to the Tamil Nadu General Sales Tax Act, 1959. Thus, for any default in payment of additional sales tax or surcharge, the dealer is liable to penal interest as contemplated under section 24(3) of the principal Act. 39.. The decision of the apex court rendered in India Carbon Ltd. v. State of Assam [1997] 106 STC 460 in the context of levy of interest on delayed payment of Central sales tax has no relevance in the present case. In that case it was held that section 9(2A) of the Central Sales Tax Act, 1956 relating to offences and penalties has no reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitions in O.P. Nos. 1766 of 1997, 2612 of 1997, 340 of 1996 and 1083 of 1997 are dismissed. . . . 67.. In T.P. No. 1769 of 1997, penal interest levied on additional sales tax that remained unpaid as per returns filed under the Act is in order. Hence, the petition is dismissed. Before the Tribunal, the petitioner therein mainly relied on the decision in India Carbon Ltd. v. State of Assam reported in [1997] 106 STC 460 (SC), and the Tribunal has held that the abovesaid decision has no relevance to the case, as it was rendered in the context of levy of interest on delayed payment of Central Sales Tax Act. During the course of hearing of the present writ petition, it is brought to the notice of this court by the learned Additional Government Pleader for the respondent that the decision of E.I.D. Parry's case [1999] 113 STC 233 (TNTST) has become final. It is also brought to the notice that earlier this court in Wipro G.E. Medical Systems v. Tamil Nadu Taxation Special Tribunal [W.P. No. 11632 of 1999, dated September 14, 2001], held that the levy of interest on the additional sales tax under the TNAST Act is impermissible in the absence of any specific provision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied date in addition to such amount of additional tax or penalty due, has not been challenged so far. The main contention of the petitioner that in the absence of any substantial provisions under the TNAST Act, authorising the levy of penal interest, the penalty imposed by the respondent under section 24(3) of the TNGST Act, for belated payment of additional sales tax is without jurisdiction, has already been answered by the Full Bench of the Special Tribunal in E.I.D. Parry (India) Ltd. v. Assistant Commissioner (CT), CAC, Chennai reported in [1999] 113 STC 233, and it has become final. That apart, the above amendment in Act 14 of 2005, giving retrospective effect, for the levy of penal interest on the remaining amount unpaid after the specified date, and the validation provision are squarely applicable to the facts of this case and therefore, the contentions of the petitioner that the demand made by the assessing officer without jurisdiction, is not tenable. The additional sales tax has to be paid on the prescribed date and after the due date, it becomes an amount remaining unpaid. It is not determined afresh and therefore, the question of providing an opportunity of issuin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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