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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 ..... plicability of Section 24(3) towards tax due, under the Act - 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 penalty can be levied, as there is no charging Section under the TNAST Act to levy penalty for the relevant Assessment year. The provisions of the TNGST Act cannot be extracted or read upon for the purpose of levy of interest or penalty under the TNAST Act. The validating Acts are applicable only to the assessment under TNGST Act. Further, in view of the bar under Article 265 on the state, the question of waiver is not applicable to a taxing statute - proceedings of the first respondent, dated 26.04.2004, confirmed by the proceedings of the second respondent, dated 12.09.2008, are set aside insofar as the levy and demand of interest of ₹ 2,09,700/- and ₹ 5,39,532/- towards penalty on the additional sales tax payable by the petitioner - Decided in favour of assessee. - W. P. (MD) Nos. 5111 of 2009 and W. P. (MD) Nos. 5112 of 2009 and M. P. No. 2 of 2009 - - - Dated:- 17-6-2014 - R. Mahadevan,JJ. For the Petitioner : Mr. N. Inbarajan For the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance amount. The Division Bench also directed the second respondent to take up the revision and decide the same on merits upon complying with the conditions. The revision petition was dismissed by the second respondent, on 12.09.2008, holding that the levy of interest is valid in view of the validating Act. Grieved, W.P.(MD).No.5112 of 2009 has been filed. 5. In the meantime, the petitioner submitted an application under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008 [hereinafter referred to as the Settlement of Arrears Act, 2008 , before the second respondent. In the said application, the petitioner arrived the amount payable under the Samadhan Scheme at ₹ 3,07,647/- and wanted to set off the amount of ₹ 4,00,000/- paid as per the directions of the Division Bench with the amount payable. The said application was rejected by the second respondent. Challenging the same, W.P.(MD).No.5111 of 2009 has been filed. 6. Mr.N.Inbarajan, the learned counsel appearing for the petitioner submitted that the impugned order in W.P.(MD).No.5111 of 2009 has been passed by the second respondent without providing any opportunity to the petitioner. The learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r settlement under the Samadhan Scheme, the orders of the respondents 1 and 2 cannot be challenged. The learned Additional Government Pleader also placed reliance upon the Judgment in Sumangalam Steels Pvt Ltd., and another Vs. State of Tamil Nadu and others, reported in 2003 (129) STC 82 to contend that the Tamil Nadu Additional Sales Tax Act, 1970 is a part of the Tamil Nadu General Sales Tax Act, 1959, and has to be read with the same, and therefore, sought the dismissal of both the Writ Petitions. 9. I have considered the above submissions and perused the records carefully. 10. For the sake of convenience, W.P.(MD).No.5112 of 2009 is, at first, taken up for consideration. 11. The Period of limitation has been provided under the Act for the assessees to prefer or avail the statutory remedies under the Act and not for a Writ Petition under Article 226 of the Constitution of India. The right to levy tax is governed by Article 265 of the Constitution of India, which reads as follows: 265. Taxes not to be imposed save by authority of law:- No tax shall be levied or collected except by authority of law. 12. Any levy of tax including interest or penalty under any tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section, exceeds four per cent of the sale or purchase price thereof, the rate of additional tax in respect of such goods shall be reduced to such an extent that the tax and the additional tax together shall not exceed four per cent of the sale or purchase price of such goods. Explanation II.- Notwithstanding anything contained in the said Act, for the purpose of this clause, 'turnover' in respect of sugarcane excluding sugarcane setts purchased during the year, by the minimum price fixed under clause 3 and the additional price determined under clause 5-A, of the sugarcane [Control] Order, 1966 and such turnover shall be included in the total turnover of the dealer and the taxable turnover shall be arrived at accordingly for the purpose of this clause: Explanation III.- 'Taxable turnover' for the purpose of this clause in respect of a dealer liable to pay under Section 3-G of the said Act shall be the total turnover. Explanation IV.- 'Taxable turnover' for the purpose of this clause does not include the turnover of resale taxable under Section 3-H of the said Act. Explanation V.- 'Taxable turnover' for the purpose of this clause in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n enabling the applicability of Section 24(3) towards tax due, under the Act. 15. In the Judgment in Sumangalam Steels Pvt., Ltd and another Vs. State of Tamil Nadu and others, reported in 2003 (129) STC 82, Mad, the Division Bench of this Court has held as follows: 3. The Tamil Nadu Additional Sales Tax Act is an independent piece of legislation which provides for the levy of additional tax on dealers whose turnover exceeds the limits which are graded in Section 2(aa) of that Act. Dealers, whose turnover fall below the lowest limit specified in that section, are not required to pay additional sales tax, while dealer whose turnover exceeds the levels set out in the different sub-clauses therein are required to pay additional tax at higher rates. The Act also contains a proviso, which is, in the context of the facts of this case, significant. It states that,-- Provided that where in respect of declared goods as defined in clause (h) of Section 2 of the said Act, the tax payable by such dealer under the said Act, together with the additional tax payable under this sub- section, exceeds four per cent of the sale or purchase price thereof, the rate of additional tax in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bros. (58 STC 143) the law laid down in the decision rendered in W.P.No.11632 of 1999, as also in W.P.No.11631 of 1999, in our view is consistent with the law declared by the Supreme Court by the Constitution Bench in the case of J.K. Synthetics (94 STC 422) (supra), and in the case of India Carbon (106 STC 406) (supra) and does not require any reconsideration. 9.Applying the law laid down by this Court in those decisions, the petitioner is entitled to succeed. The impugned order which seeks to levy interest on the Additional Sales Tax Act is set aside. The Writ Petitions are allowed. 17. In yet another Judgment in Eastern Electrics Vs. State of Tamil Nadu, reported in 2009 (22) VST 544 Mad, relied upon by the learned counsel for the petitioner, the Division Bench of this Court held as follows: 16. It is well-known that when a statute levies a tax it does so by inserting a charging section by which a liability is created or fixed and then proceeds to provide the machinery to make the liability effective. It, therefore, provides the machinery for the assessment of the liability already fixed by the charging section, and then provides the mode for the recovery and collectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain anomalies which could never have been intended by the Legislature. From this, it is clear that the section providing for charging of penalty is a substantive provision. k) 106 STC 460 (cited supra) Now, the words charging or payment of interest in Section 9(2) occur in what may be called the latter part thereof. Section 9(2) authorises the sales tax authorities of a State to assess, reassess, collect and enforce payment of the Central sales tax payable by a dealer as if it was payable under the State Act; this is the first part of Section 9(2). By the second part thereof, these authorities are empowered to exercise the powers they have under the State Act and the provisions of the State Act, including provisions relating to charging and payment of interest, apply accordingly. Having regard to what has been said in the case of Khemka Co. [1975] 35 STC 571 (SC), it must be held that the substantive law that the States sales tax authorities must apply is the Central Act. In such application, for procedural purposes alone, the provisions of the State Act are available. The provision relating to interest in the latter part of Section 9(2) can be employed by the States sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he TNGST Act. Is this provision only clarificatory?. Was it implicit in S.2(1)(b)? Let us read that section as it originally stood. S.2(1)(b). The provisions of the said Act shall apply in relation to the additional tax payable under clause (aa) as they apply in relation to the tax payable under the said sub-section. The provisions of the said Act shall apply in relation to the additional tax payable under clause (aa) and the interest payable under clause (aaa) as they apply in relation to the tax and interest payable under the said Act. (as amended by Act 14 of 2005) If we paraphrase the above sections slightly they will read thus:- The provisions of the TNGST Act as they apply to tax in the said Act shall apply in relation to additional tax payable under clause (aa) of the AST Act. Similarly, the new Section (as amended by Act 14 of 2005) will read like this: The provisions of the TNGST Act as they apply to tax and interest in the said Act shall apply in relation to additional tax and interest payable under clause (aa) of the AST Act. Therefore, the reference to the said Act(namely TNGST Act) in S.2(1)(b) was to the provisions of the said Act 'in relation to tax& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the TNAST Act. The validating Acts are applicable only to the assessment under TNGST Act. The argument of the learned Additional Government Pleader for the respondents that the petitioner having submitted the application under Samadhan Scheme cannot question the orders levying and confirming interest and penalty also does not hold water, for the simple reason that the question of jurisdiction, being legal point, can be raised at any time. Further, in view of the bar under Article 265 on the state, the question of waiver is not applicable to a taxing statute. 19. In view of the above, the proceedings of the first respondent, dated 26.04.2004, confirmed by the proceedings of the second respondent, dated 12.09.2008, are set aside insofar as the levy and demand of interest of ₹ 2,09,700/- and ₹ 5,39,532/- towards penalty on the additional sales tax payable by the petitioner. The respondents are hereby directed to pass fresh orders, giving appropriate relief, as indicated above. 20. As the levy of interest on Additional Sales Tax and Penalty are set aside, this Court feels that there is no necessity to pass further orders in W.P.(MD).No.5111 of 2009. 21. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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