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TMI Blog2015 (7) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... ner has not made any suppressions no case of non-declaration of taxable turnover in returns was made out against the petitioner and therefore, they are entitled for IFST deferral on the entire tax assessed on the taxable turnover declared in returns. This technical ground raised by the petitioner, in my opinion, is illogical and untenable for the simple reason that even without collecting the actual taxes and declaring the same in monthly returns, the petitioner cannot avail IFST scheme. The intention of the petitioner behind not declaring in the monthly returns by filing Form C and H, etc., is that if the department fails to take note of the same, the petitioner can get the benefit of the IFST scheme in respect of transactions where the actual collection of taxes was in fact not taken place. As regards the issuance of notice before resorting to impose penal interest under Section 24(3) of the Act as per the instructions of the Special Commissioner and Commissioner for Commercial Taxes dated 20.04.2001 which insist that penalty should be imposed only after providing sufficient opportunity to the assesses is concerned, this Court finds no considerable force in the said contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it appears that the respondent passed CST assessment orders for the years 2001-02, 2002-03 and 2003-04 and TNGST assessment orders for the years 2002-03 and 2003-04 and levied differential tax for certain turnovers for the reason that the petitioner did not file Form-C/Form-H and other declarations. According to the petitioner, the differential tax on account of non-submission of declaration forms should also be adjusted against IFST deferral amount for the respective years considering the fact that the petitioner had reserved ₹ 348 lakhs out of the total deferral amount. The grievance of the petitioner is that the respondent proceeded on the basis that the differential amount of tax is not eligible to be adjusted against the IFST deferral amount and issued arrear notice dated 30.05.2013 demanding total differential tax of ₹ 87,39,916 for CST assessment orders for the years 2001-02, 2002-03 and 2003-04 and TNGST assessment orders for the years 2002-03 and 2003-04. The petitioner sent a reply dated 24.6.2013 and thereafter, the respondent sent a letter dated 29.8.2013, stating that under IFST scheme, amount of tax collected alone could be deferred and where the demand ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent actually represents the difference of taxes arrived at on account of non filing of prescribed declarations such as Form C and H etc. for which the dealers are not entitled to avail IFST scheme. It is also stated that the penal interest u/s.24(3) of TNGST Act 1959 was levied for the belated payment of taxes since it is automatic and absolute and no notice is necessary. The issue of a demand notice in Form 54 is a nonstandardized form and it is meant only for levying penalties under the Act and not for levy of penal interest under Section 24 (3) of the Act. The word by way of penalty was submitted by the word Penal interest by Act 22 of 1982 (G.O P 1164 (CT RE) dt. 15.10.1982 effective from 1.11.1982. Hence the question of issuing Form 54 for the levy of penal interest does not arise. It is also stated that the intimation regarding levying penal interest under Section 24(3) of the Act was already sent on 24.01.2014. It is also stated that the clauses 12 of the deferral Agreement executed by the Petitioners before the Assistant Commissioner (CT), Zone VII, excludes tax and penalty levied or liveable on taxable turnover suppressions of the purpose of this clause the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He further contended that unilateral decision of the respondent directing the petitioner to pay penal interest is contrary to the instructions of the Special Commissioner and Commissioner for Commercial Taxes dated 20.04.2001, wherein, instructions were given to the assessing officers to issue notice, proposing penal interest under Section 24(3) of the TNGST Act and penalty should be imposed only after providing sufficient opportunity to the assessees and therefore, the impugned order is violative of principles of natural justice. 8. The Government of Tamil Nadu introduced IFST Scheme named as Deferral Scheme to extend certain tax benefits to the industries which were set up in the backward areas, by which, the assesses/companies to collect sales taxes from the customers and to retain with them for 5 to 9 years and thereafter to make month-wise repayments starting from the month after expiry of 5th or 9th year. The petitioner was granted eligibility Certificate in EC No.312/IX/DN, dated 17.4.2002 for availing interest free Sales Tax deferral (IFST deferral) to an extent of ₹ 1725.46 lakhs by the Chairman and Managing Director, SIDCO of Tamil Nadu Limited, Egmore, Chennai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stand that they are entitled to avail the IFST scheme as they did not exceed the limit and a considerable amount has been reserved, etc., Therefore, I do not find any merit in the claim made by the petitioner. As regards the issuance of notice before resorting to impose penal interest under Section 24(3) of the Act as per the instructions of the Special Commissioner and Commissioner for Commercial Taxes dated 20.04.2001 which insist that penalty should be imposed only after providing sufficient opportunity to the assesses is concerned, this Court finds no considerable force in the said contention. Admittedly, the respondent sent arrear notice on 30.5.2013 and thereafter, by proceedings dated 29.8.2013, the respondent once again requested the petitioner to pay the tax while clarifying the eligibility of the petitioner to avail IFST scheme and only on 28.1.2014, the respondent has invoked Section 24(3) of the Act and levied penal interest since the petitioner failed to pay the tax. Thereafter, at the instance of the petitioner, 15 days time was given for filing objections and also granted personal hearing. Pursuant to the same, a representative of the petitioner appeared for per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. With the above statutory provisions relating to the levy of penal interest in the Parent Act as well as in the Saving Clause provided in the TNAST Rules, the Tamil Nadu Special Tribunal in a batch of cases inE.I.D. Parry (India) Ltd., v. Asst. Commr. (CT) (TNTST), reported in 1999 (113) STC 233, considered the following and other issues, (i) The competence of the Assessing Officer in issuing notice/order which levied 24(3) penal interest for belated submission/payment of tax or payment of tax on the basis of revised returns filed before final assessment or confirmation orders passed in Revision. (ii) The validity of the notice/order which levied 24(3) penal interest on additional tax/surcharge tax for belated payment or payment made by filling returns before the completion of final assessment or orders passed in revision justifying such orders. (iii) The point of time, to which, the penal interest under Section 24(3) of the Act is leviable with reference to the revised returns filed and payments made. (iv) The plea of refund due to the petitioner has not been adjusted properly and hence penal interest levied under Section 24(3) of the Act has to be cancelled. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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