State Taxation Tribunal - West Bengal
Noble Syndicate vs C.T.O. And Ors. on 25 July, 2002
Equivalent citations: [2006]146STC376(TRIBUNAL)
JUDGMENT
1. This is an application Under Section 8 of the West Bengal Taxation Tribunal Act, 1987 praying for setting aside the impugned orders dated July 30, 2001 and April 4, 2002 passed by the respondents Nos. 1 and 2 and for a declaration that the provisions of Section 32(1) and 32(3) of the West Bengal Sales Tax Act, 1994 (hereinafter referred to as "the Act, 1994") are in conflict with each other and also in conflict with Rule 190 of the West Bengal Sales Tax Rules, 1995 (hereinafter referred to as "the Rules, 1995").
2. The assessment of the petitioner for the four quarters ending March 31, 1997 was completed on June 24, 1999 and an appeal was preferred, being aggrieved with the order of assessment which was disposed of on June 25, 2001. The order of assessment was modified by the said appellate order dated June 25, 2001. Revised calculation A of tax payable by the petitioner was made and reassessment order passed on July 30, 2001. A notice of demand in form No. 33 for payment of Rs. 39,440.26 was received on September 27, 2001 and the amount was paid on October 19, 2001 without making any delay.
3. Although such payment was made in time, the respondent No. 1 calculated interest on the said modified amount of Rs. 39,440.26 from the date mentioned in the original demand notice. Being aggrieved with the order dated July 30, 2001 determining interest from the date of original demand notice an appeal was filed before the respondent No. 2 assailing such levy of interest of Rs. 16,654. c The respondent No. 2 on hearing the petitioner illegally confirmed the said order of levy of interest of Rs. 16,654 by an order dated April 4, 2002. Both the orders dated July 30, 2001 and April 4, 2002 determining the interest payable by the petitioner are illegal and liable to be set aside.
4. On behalf of the petitioner it is submitted that the appeal order was passed on June 25, 2001, the form No. 33 asking payment of the tax was received on September 27, 2001 and the payment was made on October 19, 2001 as directed under the said notice. Therefore, according to the learned lawyer, the question of payment of interest does not arise from the date mentioned in the notice of demand in form No. 30. It is further submitted that form No. 30 can have no force inasmuch as, the order of assessment on being challenged in appeal was modified thereby making the original demand non-existing in the eye of law. The notice of demand sent in form No. 33 as per Rule 190 of West Bengal Sales Tax Rules, 1995 (hereinafter F referred to as "the Rules, 1995") cannot be ignored in view of the provisions of Sub-section (1) of Section 32 of the West Bengal Sales Tax Act, 1994 (hereinafter referred to as "the Act, 1994"). Thus, it is the contention of the learned lawyer that form No. 33 as soon as, is issued it supersedes the form No. 30. Since form No. 33 is the last notice the provisions of Section 32(1) become invalid and are liable to be struck down. The respondents, therefore, were not justified to levy interest against the petitioner and such step taken by the respondents is illegal and unwarranted under law.
5. On behalf of the respondents relying on the decision reported in [1999] 114 STC 505 (WBTT) (Philips India Limited v. Assistant Commissioner, Commercial Taxes) it is submitted that the dispute raised in the instant application has already been decided by this Tribunal. Therefore, the petitioner is not entitled to get any relief as prayed for. The application is liable to be dismissed summarily.
6. The learned lawyer for the petitioner distinguished the said decision with reference to the present relevant provisions of law referring the contents of paragraph 11 at page 511.
7. The points for consideration, therefore, are--
(1) If the petitioner is liable to pay interest from the date mentioned in the original demand notice issued in form No. 30; and (2) If the principles laid down in the case reported in [1999] 114 STC 505 (WBTT) (Philips India Limited v. Assistant Commissioner, Commercial Taxes) are applicable in the instant case.
8. Under Section 32 of the Act, 1994, a dealer has to pay simple interest at the rate of 2 per cent for each British calendar month of default from the first day of the month next following the date specified in such notice up to the month preceding the month of commencement of proceedings Under Section 52 whichever is earlier, in case he fails to make payment of any tax payable after assessment by the date specified in the notice issued Under Section 37. The dealer thus according to Sub-section (1) of Section 32 has the liability to pay assessed tax within the date clearly mentioned in the notice of demand issued in form No. 30.
9. Sub-section (3) of Section 32 speaks of the refund of excess payment of interest, where the amount of tax payable is modified in appeal or revision. It is thus clear that when there is a provision for refund of interest, the payment obviously had started from the date mentioned in the notice of demand issued in form No. 30. The provisions of Sub-section (3) and Sub-section (1) in our opinion, are not in conflict--inasmuch as, liability to pay interest starts from the date of default in making payment of tax.
10. The next point, therefore, comes up for consideration if at all, the form No. 33 issued Under Rule 190 supersedes the contents of form No. 30 issued Under Rule 181 of the Rules, 1995. For the sake of convenience the Rule 190 may be quoted hereunder:
Where any amount of tax, penalty or interest due from a dealer or a casual trader proceedings for recovery of which have not been commenced Under Section 52, is modified in consequence of an order passed on reassessment, re-determination, appeal, review or revision, the appropriate assessing authority shall serve upon such dealer or casual trader, as the case may be, a notice in form No. 33 specifying therein the modified amount of tax, penalty or interest remaining due from him on the date of such order, the date by which payment of such amount remaining due is required to be made by him and the date by which a receipted copy of challan as proof of payment of such A amount is to be furnished to the assessing authority.
11. The form No. 33 under this rule, as we find, is sent only to the dealer where the proceedings for recovery of any amount of tax, penalty or interest due from a dealer or casual trader have not been commenced Under Section 52. Such notice is served Under Rule 194 on the dealer stating the amount paid in excess and is sent also to the Certificate Officer where the steps have been taken for recovery of any amount due by way of certificate proceedings when the said amount is modified in appeal or revision either enhanced or reduced. Therefore, not only the dealer but also the Certificate Officer is c served with the notice in form No. 33 where a certificate proceeding has been initiated and the modification of the amount of tax, interest and penalty has been made in appeal or revision. Thus, it cannot be said that form No. 33 supersedes the direction given in form No, 30 issued after the order of assessment for recovery of dues.
12. The main question for consideration is since which date the interest is to be calculated against a defaulting dealer or casual trader. It has already been pointed out that Section 32 clearly gives the answer to this question. Under this section as stated above, the interest at the rate of 2 per cent is to be levied in case of failure to make payment of any tax payable after assessment by the date specified in the notice issued Under Section 47. The form No. 33, therefore, is not a demand notice but it is an information which is also given to the Collector for recovery of the amount so modified in appeal or revision.
13. We therefore, hold that the interest according to law is to be levied not from the date of the revisional or appellate order but from the date of the expiry mentioned in the notice of demand issued against the dealer Under Section 47 of the Act inasmuch as, interest being the compensation for the delay in payment of tax and it must accrue from the date the sales tax falls due for payment. Therefore, the provision of Section 32(1) of the Act, 1994 is not in conflict with the provisions of Sub-section (3) of Section 32. The form No. 30 is never superseded in the event of issuing the form No. 33 under the provisions of Rule 190 of the Rules, 1995.
14. We, therefore, find no merits in the instant application and it is liable to be dismissed.
15. No order as to costs.