9911796707
TMI Blog2004 (4) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... els as same commodity. No tax was levied on cashewnut if the petitioner exported cashewnut kernels. No purchase tax was imposed under section 7A of the Act. In 1983, the authorities in Tamil Nadu started issuing notice for imposing purchase tax by disallowing the claim of export sales under section 5(3) of the Central Sales Tax Act, 1956, on the ground that cashewnut and cashewnut kernel are different commercial commodities and hence, if cashewnuts were purchased locally for the purpose of export, then, purchase tax under section 7A can be imposed. In view of the change in the nature of the commodities, no exemption under section 5(3) of the CST Act was available. Dealers challenged the said notices and writ petitions were filed before the High Court, Madras. The High Court admitted the writ petitions and also granted interim stay. The writ petitions filed were heard together and disposed of by the court, by a common judgment dated December 12, 1984, which has been reported in Dinod Cashew Corporation v. Deputy Commercial Tax Officer [1986] 61 STC 1 (Mad), and the court confirmed the levy of tax and held that cashewnut and cashewnut kernels are different commercial commodities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not in force and that being so, the question of the petitioner committing default would not arise. According to him, the Deputy Commercial Tax Officer is not justified in invoking section 24(3) of the Act and imposing penalty. The stand of the department is that even though the word penalty was used in section 24(3) of the Act, in effect and substance, what was provided for is nothing more than interest, which is claimed by the State, because the amount of arrears of taxes which should have gone to the coffers of the State is being retained by the dealer and it is only by way of compensation for use of such of the moneys, which rightly belongs to the State, by the assessee. Section 24(3) of the TNGST Act, 1959 as it stood prior to Tamil Nadu Act No. 22 of 1982, reads thus: If the tax assessed under this Act or any instalment thereof is not paid by any dealer or person within the time specified therefor in the notice of assessment or in the order permitting payment in instalments, the dealer or person shall pay by way of penalty, in addition to the amount due, a sum equal to a sum calculated at the rate of 2 per cent of such amount for each month or part thereof aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in force during that period and that being so, no tax can be demanded. We do not find any substance in this submission. By virtue of the order of stay, only the recovery or collection of tax was postponed till the matter is decided by the court and nothing more than that. There is no basis for the petitioners to claim that the period, during which the stay was in operation, has to be excluded and that the writ petitioner is not liable to pay any tax which is in the nature of compensation for the said period when the stay was in force. The following paragraph in the judgment of the Supreme Court reported in Calcutta Jute Manufacturing Co. v. Commercial Tax Officer [1997] 106 STC 433 would be an answer to the point raised by the writ petitioner (page 441): The tax amount which they should have paid as per section 6B remained with the appellant during the entire period and they would have earned good profit with that amount. The State, to which the tax amount should necessarily have gone, was not able to utilise it for public purposes. When appellants had the advantage of keeping the amount of tax without paying it to the State exchequer only because the High Court granted o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed to be a defaulter in respect of the total remaining amount of tax due. 42.. Mode and time of recovery. (1) Where any assessee is in default in making payment of the tax or any other amount due under this Act, (i) the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax or any other amount due under this Act, and (ii) the person or persons liable to pay the tax or any other amount due under this Act shall pay a penalty equal to (a) one and one half per cent of the tax remaining unpaid for each month for the first three months after the expiry of the time specified under sub-section (1) or allowed under sub-section (2), of section 41; and (b) two and one half per cent of such tax for each month subsequent to the first three months as aforesaid. Explanation. For the purposes of clause (ii) the penalty payable, for a part of a month shall be proportionately determined. (2) Any tax assessed or any amount due under this Act from any assessee or any other person may, without prejudice to any other mode of collection, be recovered (a) as if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not paid tax in time and the quantum of the penalty increases with the delay. Section 42 speaks of an assessee in default. The question, therefore, is: can an assessee be said to be in default during the period for which an order of stay of recovery of the tax due from him is operating? The answer is indicated in the proviso to sub-section (2) itself. Sub-section (2) empowers the collection of tax from an assessee in default as if it were an arrear of land revenue and as if it were a fine imposed by a magistrate under the Code of Criminal Procedure. The proviso says that where an assessee or other person has appealed or applied for revision of any order made under the said Act and has complied with an order made by the appellate or the revising authority in regard to the payment of tax, no proceedings for recovery under sub-section (2) may be continued until the disposal of the appeal or revision. Thus, there is recognition that during the period the stay is in operation recovery of the tax cannot be effected. It cannot be effected because the order of stay has placed the demand for the tax in abeyance. During the period of the stay, therefore, the assessee is not in default. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
