9911796707
TMI Blog2009 (5) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale of medicines as an unregistered dealer. The sales tax authorities created an additional demand of Rs. 1,48,62,465 in respect of the assessment years 1973-74 to 1977-78. Additionally, interest of Rs. 1,24,73,995 and penalty of Rs. 59,91,000 on the tax for which no demand notices were issued, were also raised. The tax was finally paid towards the end of 1987. The basic reason for non-issuance of demand notices given was the stay order passed firstly by this court and then by the honourable Supreme Court. Originally the assessment orders dated February 13, 1975, October 10, 1977, December 30, 1977, March 27, 1978 and February 15, 1979 (assessment years 1973-74 to 1977-78), were passed by the Assessing Authority. Thereafter on appeal the Appellate Authority issued remand order and then the Assessing Authority passed fresh orders. Thereafter, the Joint Excise and Taxation Commissioner (Appeals) Ambala, passed two orders dated May 23, 1988 and May 24, 1988. It is pertinent to notice that order dated May 23, 1988 was passed by the JETC (A) in four appeals arising out of reassessment orders under the provisions of the Haryana General Sales Tax Act, 1973 (for brevity, "the HGST A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto account the fact that the recovery of tax was stayed by the High Court and the Supreme Court for quite some time and the Department was not in a position to issue any demand notices. Such interest would also be chargeable only on the amount of tax finally assessed. It is a fact that although the assessment years relate to the periods 1973-74 onwards, tax was finally paid towards the end of 1987. Thus, the question of charging interest would arise in this case although the first appellate authority has said that the question of charging interest has to be looked into because the levy of interest is automatic and assessed by operation of the law. I, therefore, find no merit in the contention of the counsel for the appellant that this direction is illegal and should be quashed. . ." (emphasis Here italicised. added) After dismissal of the appeals by the Tribunal, an application under section 42(1) of the HGST Act was filed by the petitioner-dealer for referring various questions of law to this court for determination, by asserting that those questions arose from the order of the Tribunal dated September 13, 1988 (A3). The said application was dismissed and the Tribunal refused to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier statute, namely, Punjab General Sales Tax Act, 1948, as applicable to Haryana (for brevity, "the PGST Act") was repealed by section 65 of the HGST Act. The assessee-petitioner had partially succeeded in legal battle when it contested the claim of the Revenue to pay tax in respect of the assessment years, which were covered by the PGST Act. The controversy eventually rolled on to the Supreme Court in the case titled as Government Medical Store Depot v. State of Haryana [1986] 63 STC 198; [1986] 3 SCC 669. The whole argument revolved around the definition of expression "dealer" under the PGST Act and under the HGST Act. The honourable Supreme Court has found that the expression "dealer" used in and defined under both the Acts is entirely different from each other. It would, thus, be profitable to read both the definitions which are set out hereinbelow: "PGST Act: 2(d) 'Dealer' means any person including a Department of Government who in the normal course of trade sells or purchases any goods in the State of Punjab, irrespective of the fact that the main place of business of such person is outside the said State and where the main place of business of any such person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause, as we have pointed out, section 2(c) relates to the word 'dealer' contained in the provisions of the Haryana Act, and the charging provision of the Haryana Act did not operate during the assessment years in question with which these appeals are concerned. These appeals will be governed by the Punjab General Sales Tax Act, and it is section 2(d) of that Act which must be looked to for ascertaining the definition of the word 'dealer' in that Act. 11.. It may be mentioned that section 65 of the Haryana General Sales Tax Act repealed the Punjab General Sales Tax Act. Section 65 contains a proviso that such repeal will not affect the previous operation of the repealed Act or any right, title, obligation or liability already acquired, accrued or incurred thereunder. The liability incurred by a dealer in respect of the years under consideration in these appeals is a liability incurred under the charging provision, section 4, of the Punjab General Sales Tax Act. To ascertain who such dealer is one must read the definition of the word 'dealer' in the Punjab General Sales Tax Act. No reference is permissible for that purpose to the definition in the Haryana G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 1973-74 onwards. It is evident that no notice of demand could be issued for payment of interest during all those years on account of stay orders by the courts. The assessee-petitioner is now disputing its liability to pay interest on the delayed payments of tax which was not paid on account of interim order passed by either this court or by the honourable Supreme Court. The controversy in the present case and determination of legal issues: In the present case, section 2(c) defines the word "dealer". It includes Government Departments. It also expressly provides that whether a dealer trades with or without profit-motive it would not be material. Therefore, the assessee-petitioner would be covered by the definition of word "dealer" as given in section 2(c) of the HGST Act because the argument that it works on "no-profit no-loss" basis could not be sustained. The assessee-petitioner is, thus, liable to pay tax. The question then is whether the assessee-petitioner is liable to pay interest. It is true that the Assessing Authority did not assess or charge any interest on the tax assessed nor it was paid by the assessee-petitioner. Such interest is payable under section 59 of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undred rupees and a period of less than fifteen days and an amount of less than fifty rupees shall be ignored. (2) The interest payable under this section shall be deemed to be tax under this Act for purposes of collection and recovery." (emphasis Here italicised. added) A perusal of the aforesaid provision presupposes the issuance of a demand notice for payment of tax or penalty. The question concerning payment of interest arises if the demand is not met within the specified period or 30 days from the date of service of such notice. Accordingly, simple interest on such amount is payable at the rate of one percentum per month from the date commencing after the end of period of one month. The first proviso appended to sub-section (1) of section 59 further shows that if the recovery of any tax or penalty has been stayed by the Appellate Authority under sub-section (6) of section 39 of the HGST Act or by the High Court or the Supreme Court then the amount of tax or penalty was to be recovered with interest at the rate of one percentum per month if it was ultimately found due. Sub-section (6) of section 39 of the Act clothes the Appellate Authority with the power to pass any interim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be realised for the period when the recovery was stayed, the Supreme Court has held as under (page 500 of 32 STC): "10. Argument has also been advanced by Mr. Sen that the interest on arrears of sales tax could not be realised for the period during which the recovery of sales tax was stayed. We find it difficult to accede to this contention because there is nothing in the language of section 8(1A) of the Act which prevents the running of interest because of the operation of any stay order. Indeed, the liability to pay interest is created by the statute and the Sales Tax Officer has no discretion to grant any exemption from the payment of interest." (emphasis Here italicised. added) The aforesaid view has also been followed by the Supreme Court in the case of Calcutta Jute Manufacturing Co. v. Commercial Tax Officer [1997] 106 STC 433; [1997] 6 SCC 262. It is also appropriate to notice that the judgment in Haji Lal Mohd. Biri Works [1973] 32 STC 496 (SC); [1974] 3 SCC 137 has also been followed and applied in the cases of Prahlad Rai v. Sales Tax Officer [1992] 84 STC 375 (SC); [1991] Suppl. 2 SCC 612 and Tata Cummins Ltd. v. State of Bihar [2004] 13 SCC 380. Therefore, the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 8 would carry. There is also no provision in the HGST Act which requires issuance of notice of demand in respect of interest by the Assessing Authority to the assessee before the Assessing Authority forwards recovery certificate to the Collector. Furthermore, like the U.P. Act, section 59(2) of the HGST Act also provides in unequivocal terms that interest shall be considered as tax for the purpose of collection and recovery. We are further of the view that under section 59 a specific provision has been made by the first proviso to sub-section (1) of section 59 that where the recovery of tax or penalty has been stayed by the Appellate Authority under sub-section (6) of section 39 or by the High Court or the Supreme ourt then the amount of such tax or penalty becomes recoverable with interest at the rate mentioned above on the amount ultimately found due and such interest is payable on such amount from the date the tax or penalty first became due. Therefore, the Legislature has made its intention absolutely clear that the stay order issued by either the Appellate Authority, or the High Court or by the Supreme Court would not adversely affect the right of the Revenue to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
