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TMI Blog2003 (3) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... interest, resort to State Sales Tax Act cannot be had as such the imposition of interest on the Central sales tax on the analogy of State sales tax is illegal. The relevant portions of the aforesaid judgment for the purpose of the present case are quoted below: 13. There is no substantive provision in the Central Act requiring the payment of interest on Central sales tax. There is, therefore, no substantive provision in the Central Act which obliges the assessee to pay interest on delayed payments of Central sales tax. 14....There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax, the States' sales tax authorities cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest thereon. Subsequently, the Parliament intervened in the matter and enacted Finance Act of 2000 (Act No. 10 of 2000). The said Act received the assent of the President of India on May 12, 2000. By the aforesaid amendment section 9(2) and section 9 (2A) of the Central Sales Tax Act were amended. It also inserted sub-section (2B) after sub-section (2A) in section 9. Section 9 (2B) is quoted below: (2B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ways been imposed, taken or done as validly and effectively as if the provisions of sub-section (1) had been in force when such interest was imposed or proceedings or acts or things were taken or done and, accordingly, (a) no suit or other proceedings shall be maintained or continued in, or before, any court, Tribunal or other authority for the refund of any amount received or realised by way of such interest; (b) no court, Tribunal or other authority shall enforce any decree or order directing the refund of any amount received or realised by way of such interest; (c) where any amount which had been received or realised by way of such interest is refunded before the date on which the Finance Act, 2000 receives the assent of the President and such refund would not have been allowed if the provisions of sub-section (1) had been in force on the date on which the order for such refund was passed, the amount so refunded may be recovered as an arrear of tax under the Central Sales Tax Act; (d) any proceeding, act or thing which could have been validly taken, continued or done for the imposition or collection of such interest at any time before the commencement of the section if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Finance Act, 2000. According to him whenever Parliament wanted to amend any provision with retrospective effect, it was specifically and clearly so mentioned in the Finance Bill itself such as section 48 of the Income-tax Act, amended by the aforesaid Finance Act, which was made retrospective with effect from April 1, 1993. Similarly, it was submitted, that no such retrospective effect was specifically mentioned in regard to the introduction of sub-section (2B) of section 9 of the Central Sales Tax Act. Consequently, it was submitted that section 119 of the Finance Act would take effect from the date on which the Finance Bill, 2000 received the assent of the President, i.e., May 12, 2000. Further when by the same Amending Act various provisions of the Act are amended and some of the provisions are given retrospective effect while others or not, then such a provision has to be taken as prospective. In support of the aforesaid argument reliance has been placed on Commissioner of Sales Tax v. Sada Nand Arya [1979] UPTC 816 and Sales Tax Officer, Moradabad v. Oriental Coal Corporation [1988] 68 STC 398 (SC); [1988] UPTC 513 (SC). On the other hand, Sri S.P. Kesarwani, learned Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as substituted with the words interest or penalty . The various clauses of sub-section (2) of section 120 provide that notwithstanding anything contained in any judgment, decree or order of any court, Tribunal or other authority, general sales tax law of any State imposed or purporting to have been imposed in pursuance of the provisions of section 9 of the Central Sales Tax Act shall, for all purposes, be deemed to be and to have always been imposed, taken or done as validly and effectively as if the provisions of sub-section (1) had been in force when such interest was imposed or proceedings or acts or things were taken or done. Further it has been provided that no suit or other proceedings shall be maintained or continued in or before any court, Tribunal or other authority for the refund of any amount received or realized by way of such interest. Not only this clause (c) of section 120(2) provides that where any amount which had been received or realized by way of such interest, is refunded before the date on which the Finance Act, 2000 receives the assent of the President and such refund could not be allowed if the provisions of sub-section (1) had been in force on the date on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was considering the amendment in section 21 of the U.P. Trade Tax Act. The said amendment was held to be prospective by the High Court. In the said case proviso to section 21(2) of the U.P. Trade Tax Act was amended and the period of limitation for reopening of the assessment was provided as eight years but with the sanction of the Commissioner. In paragraph 5 of the judgment it was mentioned that the U.P. Trade Tax Act was extensively amended by the U.P. Sales Tax (Amendment and Validation) Act, 1991. The Amending Act received the assent of the Governor of Uttar Pradesh on August 19, 1991. Different dates were prescribed for coming into force of various provisions of the Amending Act. Section 21 of the Act also underwent an amendment and the amendment which was under consideration before the Supreme Court came into force with effect from February, 1991. The Supreme Court, while reversing the judgment of our court has held that the date, of commencement of the proviso to section 21(2) of the Act does not control its retrospective operation. It was further held that the proviso is operative from February, 1991 and a bare reading of the proviso shows that the operation of this p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f it cures the defects in the substantive provision of the Act, which is essential requirement for passing validating statute. There is no quarrel to this proposition and the said case has no application to the facts of the present case. The Parliament in the case in hand, by amending section 9(2) of the Central Sales Tax Act has removed the defect pointed out by the Supreme Court. By making the necessary amendments in the Central Sales Tax Act, the provision for charge of interest on unpaid Central sales tax has been added. The defect as pointed out by the Supreme Court in the case of India Carbon Ltd. [1997] 106 STC 460 (SC); [1998] UPTC 1 has been sought to be removed by section 119 of the Amending Act. Sections 119 and 120 of the Amending Act have cured the defects in the substantive provisions of the Central Sales Tax Act. The Supreme Court very recently in Welfare Association A.R.P. Maharashtra v. Ranjit P. Gohil [2003] 2 JT 335 SC following its earlier judgment in Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality [1971] 79 ITR 136; AIR 1970 SC 192 has held that it is permissible for the Legislature, subject to its legislative competence otherwise, to ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it removes the defect which the court had found in the existing law and makes adequate provisions in the validating law for a valid imposition of the tax. In the present case the legislative competence of the Parliament to enact the Finance Act and section 120 of the Finance Act has not been disputed. Sri Bharatji Agarwal has placed reliance upon the case of I.N. Saksena v. State of Madhya Pradesh [1976] 4 SCC 750. The said ruling has no application to the facts of the present case. In paragraph 14 of the said judgment it was held that by administrative instructions a statutory rule cannot be amended. Reliance was placed on paragraph 35 of the judgment, but we do not find that the controversy involved in the case in hand was the subject-matter of the aforesaid ruling and the said ruling is distinguishable. For the reasons given above, the judgments of the Supreme Court given in (1) State of Haryana v. Karnal Co-op. Farmers' Society Limited [1993] 2 SCC 363, (2) Janapada Sabha, Chhindwara v. Central Provinces Syndicate Ltd. AIR 1971 SC 57, (3) Commissioner of Trade Tax, U.P. v. Upper Doab Sugar Mills Ltd. [2000] 118 STC 422 (SC); [2000] UPTC 496; [2000] 3 JT 355 SC and o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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