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TMI Blog2022 (4) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... n the order permitting payment in instalments, the dealer or person shall pay, in addition to the amount due, interest at 2% per month of such amount for the entire period of default. The specified date for making payment of tax is in terms of Rule 7 of the Rules. Thus, the challenge by the impugned Notices are without any merits. If there is a failure to tax in time, the dealers are required to pay interest as payment of Interest is consequential. Writ petition dismissed. - W.P.Nos.1442 & 1446 of 2021 And WMP.Nos.1615 & 1619 of 2021 - - - Dated:- 4-3-2022 - Honourable Mr.Justice C.Saravanan For the Petitioner : Mrs.Aparna Nandakumar( in both W.Ps.) For the Respondent : Ms.Amirta Dinakaran Government Advocate (in both W.Ps.) COMMON ORDER Short points that arises for consideration in the present writ petition, is whether the petitioner can be fastened with interest liability under Section 42(3) of the Tamil Nadu Value Added Tax Act, 2006 (hereinafter referred to as TNVAT Act, 2006) as detailed under: S. No Month Purchase tax u/s 12 as per the monthly returns Due date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 6 10 8 ₹ 11,07,845/- Grand Total : ₹ 47,69,170/- 2. The brief facts of the case is that the petitioner filed returns for the Assessment Years 2008-2009 and 2010-2011. The earlier assessment order was passed for the Assessment Year 2008-2009 on 15.06.2012. Thereafter, two assessment orders dated 25.02.2014 came to be passed for the respective Assessment Years after the amendment to Section 22(2) of the TNVAT Act, 2006. Prior to amendment, the returns filed by the dealer were to be assessed in terms of amendment under Section 22 of the TNVAT Act, 2006. 3. The two assessment orders which came to be passed on 25.02.2014 were challenged by the petitioner in WP.Nos.8788 to 8792 of 2014. The petitioner had also challenged the assessment orders for the Assessment Years 2011-2012, 2013- 2014 order dated 25.02.2014. By an order dated 29.10.2014, this writ petition was allowed by giving an opportunity to the petitioner to file their objections along with documents. 4. The petitioner had also filed W.P.Nos.2653 2654 of 2016 for the Assessment Years 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the arguments advanced by the learned counsel for the petitioner and the learned counsel for the respondent, the learned Single Judge of this Court, by an order dated 07.11.2019 in W.P.Nos.2732 to 2737 of 2017 accepted the contention of the petitioner as far as the imposition of penalty under Section 27(4) of the TNVAT, 2006 with the following observation: 12. The quantification of such penalty hinges upon the tax determined to be due by the assessee. A demand of tax due to the revenue by an assessee is thus a sine qua non for the levy of penalty under Section 27(4), the provisions of sub-section 4 making it amply clear that the levy of penalty shall be 300% of the tax due and as quantified under Section 27(2). 7. In the above back ground, the impugned notices were issued to the petitioner seeking to recover interest for the belated payment of purchase tax from the petitioner has been made. Subsequently, for the Assessment Year 2008-2009, a sum of ₹ 42,31,538/- has been demanded as interest payable by the petitioner and for the Assessment Year 2010-2011 a sum of ₹ 47,69,170/- has been demanded from the petitioner under Section 42(3) of the TNVAT Act, 2006. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt merits acceptance. In this case, the assessment relates to the assessment years 1977-78. The respondent furnished his return to the assessing authority and the assessing authority passed an assessment order against the respondent and in accordance with the assessment order, the assessee has deposited the entire amount of tax amounting to ₹ 15,236.98 paise on 3.8.1986 and ₹ 2,817/- on 26.6.1982. However, on 30.7.1990, the assessing authority passed an order imposing interest against the respondent. Thus the demand was after nearly four years. There was no demand of interest in the assessment order which, in our opinion, form part of the assessment order. As the assessment order did not include a claim for interest, the demand for interest had to be made within a reasonable period thereafter. To be noted that for rectification of the assessment order, a limitation period of three years is laid down. Since the demand of interest was made after almost four years, we hold that the demand is not within a reasonable period and the assessment is not liable to pay the interest as demanded. The Department is not entitled to recover the interest from the assessee-respondent but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Even if, we take the letter dated 25.10.2004 as the first demand of interest, although that letter was in respect of a demand for differential duty, the demand would still be beyond a period of three years. 11. The learned counsel for the petitioner has also placed reliance on the decision of the Bombay High Court in Commissioner Vs.Emco Ltd - 2015 (325) E.L.T. A104 , wherein the decision of the Tribunal was questioned. The Bombay High Court dismissed the appeal by following the decision of the Hon'ble Supreme Court in Commissioner of Central Excise Vs. TVS Whirlpool Limited, 2000 (119) E.L.T. A177(SC), a specific reference was made to following passage is reads as under: It is only reasonable that the period of limitation that applies to a claim for the principal amount should also apply to the claim for interest thereon . 12. The learned counsel for the petitioner further submits that the writ petition filed deserves to be allowed as the demand for interest under Section 43(2) was time barred. 13. The learned counsel for the petitioner has relied on the recent circular/clarification of the Principal Secretary / Commissioner of Commercial Taxes, Chepauk v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iring them to produce books of accounts for detailed check under Section 22(3) of TNVAT Act, 2006. F) Where, the assessment has been initiated on the selected list of tax payers for any reasons thereof and no subsequent action in the form of issue of Pre-assessment notices, Pre-revision Notices or Best Judgment Notices has been taken within a period of 6 years from the said date of assessment, then no summons or notice need to be issue to the said tax payers requiring them to produce books and accounts for detailed check under Section 22(3) of TNVAT Act, 2006. 14. Defending the stand of the respondent, the respondent submits that the petitioner has only challenged the notices issued under Section 42(3) of the TNVAT Act, 2006, and therefore the petitioner can be asked to file a reply and participate in the adjudication mechanism prescribed under the TNVAT Act, 2006. A specific reference was made to averments under Section 8 by the contention of the respondent. It is submitted that as per the Section 22(2) of TNVAT, 2006, assessment order was passed for the Assessment Years 2008-2009 on 15.06.2012 by accepting the monthly returns filed by the petitioner. Subsequently, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the respondent also submitted that the requirements of maintaining proper records in terms of Rule 12 of TNVAT, Act 2006 was not followed by the petitioner and therefore there was no excuse for not paying interest. 18. Heard the learned counsel for the petitioner and the learned counsel for the respondent. Perused the impugned notice and the assessment order and re-assessment order have been passed in this case and also perused the order passed by this Court and also the decisions of the Hon'ble Supreme Court referred by the learned counsel for the petitioner and the learned counsel for the respondent. 19. As per the decisions of the Hon'ble Supreme Court in Commissioner of Central Vs. M/s.Ratan Melting and Wire, Calcutta , (2005 3 SCC 57), Circulars of the Board are not binding on the Court. Therefore, the views expressed by the Principal Secretary / Commissioner of Commercial Taxes, Chepauk vide Letter No.R5/4593/2017 dated 08.01.2021 will not come to the rescue of the petitioner. 20. The assessment under the Tamil Nadu Value Added Tax Act, 2006 is based on the self assessment by an assessee by filing proper returns declaring the income. Assessment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up for consideration in the case of Sri Sakthi Murugan Tex Vs. The Assistant Commissioner (CT), Perundurai, Erode District in W.P.No.21878 of 2021 dated 16.02.2022, in the above case observed and held as follows: 10. The question for determination is whether the petitioner can be absolved from payment of interest on the delayed payment of differential tax paid for the period from the date on which the tax was originally to be paid and the actual date of payment of the differential tax on 24.03.2016. 11. In this case, there was a deemed assessment in terms of proviso to Section 22(2) of the TNVAT Act, 2006. Therefore, the notice was issued to revise the self assessment made by the petitioner under Section 21 of the TNVAT Act, 2006. 12. As per Section 42(1) of the TNVAT Act, 2006, tax under Section 21 of the TNVAT Act shall be paid without any notice. Tax which is assessed or has become payable from a dealer or a person has to be paid in such manner and in such instalments, if any, and within such time as may be specified in the notice of assessment. 13. As per Section 42(3) of the TNVAT Act, 2006, on any amount remaining unpaid after the date specified for i ..... 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