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TMI Blog2021 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... (approx.) crores was reported and tax was remitted thereupon. There is no dispute in regard to the position that this reflects the correct position both in terms of the turnover as well as the tax computed thereon. 4. The returns culminated in an order of assessment dated 30.03.2011 to the effect that the petitioner had paid excess tax of an amount of Rs. 1451/-. Tax on additional sales had also been remitted and there were 'nil' arrears. 5. However, the petitioner had a liability to AST under the Tamil Nadu Additional Sales Tax Act, 1970 (in short 'TNAST Act'), as its turnover fell within the slab of Rs. 10 to 25 crores. 6. A notice thus came to be issued on 10.11.2009 calling upon the petitioner to remit a sum of Rs. 23.50 (approx.) crores towards AST, computed at 1% on the taxable turnover, within a period of three days of receipt of notice, failing which coercive action in terms of the Revenue Recovery Act, 1864 was threatened. 7. Immediately on receipt of the notice, the petitioner, under cover of letter dated 26.11.2009, effected part payment promising to pay the balance in four equal monthly instalments. There is no dispute on the position that the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce was issued on 22.12.2009, AST had been remitted in full. Thus, in the absence of a quantification by assessment, and consequent demand, no interest was liable to be levied. 14. In addition to the judgements of the Supreme Court in E.I.D. Parry (India) Ltd. (supra) and Philips Ltd. and another V. Assistant Commissioner, Commercial Taxes, Calcutta and others ((2004) 136 STC 636), learned counsel for the petitioner relies on the decision of the Division Bench of this Court in Kone Elevator (supra), wherein, citing the provisions of Section 2(aaa), this court interprets the phrase 'imposed by the assessing authority remaining unpaid under this Act' to mean that it is only when a determination was made, and delay on the part of the assessee to remit the amount demanded, that liability to interest will arise. 15. Per contra, Mr.Jayaprathap first refers to the provisions of the Amendment Act 2005, consequent upon which, the Assessing Authority has been vested with the power to impose interest for delay in remittance of AST. On the question of whether there has or has not been a delay, he relies upon the provisions of Section 24(1) to state that, in this case, the assessee was well aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, subject to the provisions of sub-rule (4), be provisionally accepted. If the return is submitted without 1 [proof of payment as specified in sub-rule (1) of rule 55] for the full amount of tax payable after deducting therefrom the amount, if any, claimed as reimbursement or refund due in the month under rule 23, such amount of tax shall become due on the date of receipt of the return or on the last due date as prescribed in sub-rule (2), whichever is later, and shall be recovered in accordance with the provisions of the Act without any notice of demand to the dealer. Rule 18(4). If no return is submitted in respect of any month on or before the date specified in sub-rule (2) or before the expiry of the period prescribed in sub-rule (5) or if the return submitted appears to be incorrect or incomplete, the assessing authority shall, after making such enquiry as he considers necessary and after giving the dealer notice as prescribed in rule 12, determine the turnover to the best of his judgement and [provisionally determine the tax or taxes payable] for the month and shall serve upon the dealer a notice in [Form B-3] and the dealer shall pay the sum demanded at the time and in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice of assessment and tax under Section 13(2) has to be paid without any notice of demand. However, as seen above, the tax under Section 13(2), in the absence of any determination by the Assessing Authority, is tax as per the returns. If default is made in payment of such tax then interest becomes payable under the Act. In the present case, it is an admitted position that tax as per the monthly return had been paid within time. It is also an admitted position that there was no assessment, even provisional, by the Assessing Authority prior to the final assessment made after the revised returns had been filed. Interest becomes payable under Section 24(3) on an amount remaining unpaid after the date specified for its payment under sub- section (1) of Section 24. As seen above sub-section (1) of Section 24 deals with an assessed tax or tax which has become payable under the Act. In cases covered by Section 13(2) tax must be paid without any notice of demand. But as stated above, under Section 13(2) tax is to be paid "on the basis of such returns". Tax as per the returns has admittedly been paid. If the returns were incomplete or incorrect as now claimed the assessing authority had to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the levy of interest is based on the adjudication by the Assessing Officer. Therefore, Rule 18(3) and Rule 18(4) operate in different spheres. 24. The petitioner before me has filed returns in Form A-1, under a self-assessment scheme. It was thus incumbent upon the petitioner to have included (i) the correct undisputed turnover, as well as (ii) the correct liability in respect of that turnover. There is no dispute with respect to the turnover itself and there is also no dispute with respect to the liability under TNGST. However, the petitioner failed to remit the AST in regard to the turnover returned which is a lapse in self-assessment. The distinction noted by the Bench is very relevant in this case. The Bench states that the default arising on non-payment of tax on an admitted liability in the case of a self-assessment will attract an automatic levy of interest, whereas, default in filing an incomplete or incorrect return would attract interest only based on the adjudication by the Assessing Officer. The present assessment is based on a self-assessment and liability to AST is thus automatic. The question of determination is not relevant in the present case. 25. It is relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y can only arise from the date of fresh demand notice. It has been held that even though there is no provision for issuance of a second demand notice, the department will necessarily have to issue a fresh demand notice. It is held that the party could only be considered as defaulter if payment is not made from the date specified in the fresh demand notice. This authority is binding upon us. 27. The ratio of the judgment is that the assessee cannot said to be 'in default' unless a fresh adjudication of income/turnover was made, a demand raised stipulating a time frame for remittance of the amount, and the assessee violated the same. 28. In the present case, the petitioner falls under a self-assessment scheme where liability to AST is automatic. In that case, Philips Ltd. (supra) the demand stood varied by virtue of an appellate order and the question that was decided was interest liability in the case of variation between original demand and demand consequent upon an appellate order. This decision is of no assistance to the petitioner and the aforesaid ratio is not applicable to the facts and legal position in this matter. 29. The case of Kone Elevator India Ltd. (supra) was deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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