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TMI Blog2014 (7) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985. Even though tax and Additional tax were paid, the same were paid belatedly. Therefore, the respondent initiated proceedings under Section 24(3) of the Tamil Nadu General Sales Tax Act, 1959, [for brevity, "the Act"]. The same was challenged by the petitioner in a revision before the second respondent on the ground that unless there is a charging provision, no penalty and interest can be levied for belated payment of additional sales tax. The second respondent remanded back the matter before the first respondent for fresh consideration. The first respondent, once again, confirmed his proposal and demanded Rs. 4,81,356/- as interest towards belated payment of tax under the Act, Rs. 2,09,700/- as interest towards belated payment of tax under the Additional Sales Tax Act and Rs. 5,39,532/- towards penalty. 4. Aggrieved by the same, the petitioner filed a revision before the second respondent, which was returned as non maintainable. Since the first respondent initiated recovery proceedings by way of auction, the petitioner filed a Writ Petition before this Court in W.P.No.4189 of 2004, which was dismissed holding that the petitioner can very well approach the first respondent fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd others, reported in 2003 (129) STC 82, Mad; Eastern Electrics Vs. State of Tamil Nadu, reported in 2009 (22) VST 544 Mad; and an order of this Court in Tvl.Karthik Roller Floor Mills Pvt., Limited, Vs. State of Tamil Nadu, W.P.Nos.6777 and 6778 of 2001, dated 14.08.2002, contended that in view of the fact that the respondents lack jurisdiction to levy interest on Additional Sales Tax and Penalty, the Writ Petitions are maintainable. Similarly, the learned counsel for the petitioner, in support of his contention, relied upon the Judgment in Assistant Commissioner [CT] T.Nagar, [South], Assessment Circle, Chennai Vs. Pamban Oil Mills, reported in 2013 (66) VST 157, related to Samadhan Scheme. 8. Per contra, Mr.R.Karthikeyan, the learned Additional Government Pleader, placing reliance upon the written arguments, would contend that the amount, which remains unpaid on the date of application alone, has to be taken into consideration and since a sum of Rs. 4,00,000/- was paid prior to the application, the application was rightly rejected by the second respondent, as the petitioner has not tendered 25%, as per section 7(d) of the Settlement of Arrears Act, 2008. The learned Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (aa) [The tax payable under the Tamil Nadu General Sales Tax Act, 1959 [Tamil Nadu Act 1 of 1959] [hereafter in this Section referred to as the said Act], in the case of a dealer including the principal selling or buying goods through agents] whose taxable turnover for a year exceeds twenty-five crores of rupees, be increased by an additional tax, calculated at the following rates, namely;- RATE OF TAX (i). Where the taxable turnover exceeds twenty five crores of rupees but does not exceed fifty crores of rupees (ii). Where the taxable turnover exceeds fifty crores of rupees but does not exceed one hundred crores of rupees. (iii).Where the taxable turnover exceeds one hundred crores of rupees but does not exceed three hundred crores of rupees. (iv).Where the taxable turnover exceeds three hundred crores of rupees. 1.5 per cent of the taxable turnover. 2 per cent of the taxable turnover. 2.5 per cent of the taxable turnover. 3 per cent of the taxable turnover. Explanation I. - 'Taxable Turnover' for the purpose of this clause in respect of a principal selling or buying goods [....] through agents shall be the aggregate taxable turnover of all his agents rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , incontravention of the provisions of sub-section (2) of section 2[.......] the assessing authority concerned, may, after giving such dealer [......] a reasonable opportunity of being heard, by order in writing impose upon him by way of penalty, a sum not exceeding one and a half times such amount. Provided that no proceedings under this Section shall commenced after a period of five years from the expiry of the year in which the amount has been collected. Provided further that no prosecution for an offence, under sub-section (3) of Section 2[......] shall be instituted in respect of the same facts on which a penalty has been imposed under this Section. Section 3-B. Levy and collection of penalty-All the provisions relating to offences and penalties of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), hereafter in this section referred to as the said Act, shall, with necessary modifications, apply in relation to the assessment, re-assessment, collection and the enforcement of payment of any additional tax required to be collected under this Act, or in relation to any process connected with such assessment, re-assessment, collection or enforcement of payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Act." 16. The Division Bench rejected the argument that the Tamil Nadu Additional Sales Tax Act, 1970, has to be read as a part and parcel of the Tamil Nadu General Sales Tax Act, 1959 Act. The Division Bench also held that it is a part of the Tamil Nadu General Sales Tax Act, 1959 Act, which is an independent Act. In Tvl.Karthik Roller Floor Mills Pvt., Limited, Vs. State of Tamil Nadu, W.P.Nos.6777 and 6778 of 2001, dated 14.08.2002, the Division Bench of this Court held as follows: "7. The Tamil Nadu Additional Sales Tax Act by Section 2(1)(b), makes the provisions of the Tamil Nadu General Sales Tax Act applicable in relation to the additional tax payable, as they apply in relation to the tax payable under the said Act, Additional sales tax being a levy provided for in the special enactment relating to the levy of additional sales tax, the substantive provisions in relation to that levy have to be found in that enactment, and there being no substantive provision in the Tamil Nadu Additional Sales Tax Act for the levy of interest on additional tax, the provisions of the Tamil Nadu General Sales Tax Act providing for levy of interest on the sales tax payable under that ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of contract or usage interest can be levied under law and it cannot be recovered by way of damages for wrongful detention of the amount. (See Bengal Nagpur Railway Co. Ltd. v. Ruttanji Ramji AIR 1938 PC 67 and Union of India v. A.L. Rallia Ram [1964] 3 SCR 164 at 185 to 190). Our attention was, however, drawn by Mr Sen to two cases. Even in those cases, CIT v. M. Chandra Sekhar [1985] 151 ITR 433 and Central Provinces Manganese Ore Co. Ltd. v. CIT [1986] 160 ITR 961 (SC), all that the Court pointed out was that provision for charging interest was, it seems, introduced in order to compensate for the loss occasioned to the Revenue due to delay. But then interest was charged on the strength of a statutory provision, may be its objective was to compensate the Revenue for delay in payment of tax. But regardless of the reason which impelled the Legislature to provide for charging interest, the Court must give that meaning to it as is conveyed by the language used and the purpose to be achieved. Therefore, any provision made in a statute for charging or levying interest on delayed payment of tax must be construed as a substantive law and not adjectival law. So construed and app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales tax law of the appropriate State includes AST, surcharge and additional surcharge; the General Sales Tax Act which is the principal Act and the AST Act must be read as if they are one so as to give effect to the provisions of the Act except where the later Act manifests an intention to modify the main Act; the charging provisions are substantive provisions; there can be no levy of penalty without a charging section. The rule against retrospectivity is not applicable to clarificatory legislation. 13. Bearing this in mind, we will go back to the S.3-B. Section 3-B. Levy and collection of penalty-All the provisions relating to offences and penalties of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), hereafter in this section referred to as the said Act, shall, with necessary modifications, apply in relation to the assessment, re-assessment, collection and the enforcement of payment of any additional tax required to be collected under this Act, or in relation to any process connected with such assessment, re-assessment, collection or enforcement of payment as if the additional tax under this Act, were a tax under the said Act." S3-B says that all the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision. A charging section is substantive law as seen in 94 STC 422(cited supra). Therefore, there can be no levy of penalty without the charging section. This is in accordance with India Carbon and J.K. Synthetics. The judgments, which deal with clarificatory sections are of no help since the S.3-B is not a clarificatory section, it introduces for the first time the power to levy penalty. Karthik Roller Mills case correctly hold that in the absence of the substantive provision, in the AST Act itself, relating to levy of interest, the provisions of the TNGST Act cannot be the source of power of such levy. Similarly, unless there is a charging section for levy of penalty, there can be no automatic reading of the power to levy penalty. The levy of penalty cannot be sustained. We are in agreement with 2004 (136) STC 606(cited supra). In our view, therefore, we see no reason to refer the matter for reconsideration." 18. The above Judgments are squarely applicable to the case on hand. From the above Judgments, it is clear that the interest cannot be demanded for belated payment on Additional Sales Tax, as there is no substantial provision in the TNAST Act itself and similarly, no penalt ..... 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