Andhra HC (Pre-Telangana)
Ambica Chemicals Products, Eluru vs Commercial Tax Officer, Eluru And ... on 15 March, 1999
Equivalent citations: 1999(2)ALD651, 1999(2)ALT688
Author: A.S. Bhate
Bench: A.S. Bhate
ORDER A.S. Bhate, J.
1. Petitioner-firm manufacturers "Agarbathies". For purpose of Sales Tax assessment under the Andhra Pradesh General Sales Tax Act, 1957 (hereafter referred to as the 'Act') the authorities assessed the petitioner-firm for assessment year 1985-86 by order dated 15-2-1990. "Agarbathies" were classified as "perfumes" which falls in Entry No.36 of the First Schedule and accordingly was subjected to tax at the rate of 10%. The tax was levied accordingly and for belated payment of tax interest was also levied and recovered from the petitioner. Even for 1986-87 tax was levied at 10% on similar reasoning. Interest was also levied and recovered form the petitioner-firm for delayed payment of tax in 1990. The petitioner challenged the assessment order before this Court in writ petitions but the challenge failed when the writ petitions were dismissed on 29-9-1989. The petitioner went to Supreme Court against the said order. The petitioner also carried his appeal under the Act before the Deputy Commissioner, Guntur contending that the "Agarbathies" do not fall under the entry "perfumes". The Supreme Court by its judgment dated 20-2-1997 reversed the judgment of this Court in batch of writ petitions and held that "Agarbathies" cannot be classified as "perfume" and the ' levy of tax at 10% was held invalid and it was observed that tax at the rate of 5% at the general rate only, could be recovered. In pursuance of this judgment, the Appellate Deputy Commissioner by his order dated 19-9-1997 in appeals which were pending before him held accordingly. Consequently a sum of six lakh rupees and more for assessment year 1985-86 and nine lakh ninety seven thousand rupees and odd for assessment year 1986-87 became refundable. The refunds were quantified by the authorities and consequently orders were passed on 29-9-1997 whereby the amount refundable was adjusted to the subsequent tax payment for the year 1997-98. This adjustment was done between 29-9-1997 to 20-12-1997. All these facts are undisputed.
2. The petitioner-firm now contends that the respondents having recovered and retained excess amount of Sales Tax are liable to pay interest at the rate of 2% per month on the excess amount collected and retained by the respondents. The petitioner made request for such interest by his letters dated 2-6-1997 and 2-2-1998. The petitioner was informed that the provisions of the Act do not permit any such interest as claimed. It was pointed out that the only provision under the Act relating to payment of interest on refund, was contained in Section 33-F of the Act. The petitioner-firm's case did not fall under that provision and therefore the petitioner-firm's request was rejected.
3. The contention of the learned Counsel for the petitioner-firm is that the petitioner-firm is entitled to interest on ground of equity and equality of treatment between the parties. It is argued that the State whenever collects taxes from the assessee, it recovers interest if payment is delayed by the assessee. For the same reason, the assessee should also be paid interest if amount is not refunded to the assessee immediately.
4. We have heard the learned Counsel for the petitioner-firm at length. It was not disputed that the petitioner has not statutory right as there is no provision in the Act which will entitle the petitioner-firm to make such claim of interest. The case is based wholly on grounds of equity and good conscience. In matters of Laws relating to taxation, the Courts have to construe, interpret and apply the law strictly in terms of the Statute. The argument that there is no bar in the Act to make such claim by the assessee is sufficient justification for the equitable claim, does not impress us. The Act has made provision for payment of interest in cases of refund only under circumstances covered by Section 33E and Section 33F of the Act. Thus a specific provision is made in the Act as to when the assessee is entitled to interest. A specific provision having been made by the Legislature, it is not open for the petitioner-firm to make a claim which is not provided by the Statute. Concedingly the claim of the petitioner-firm does not fall either under Section 33-E or Section 33-F of the Act. The refund was ordered in favour of the petitioner-firm by the appellate authority only on 19-9-1997 and in terms of the provisions of the Act, the same has been adjusted within three months though the time within which the refund is to be made is of six months and it is only if its is not granted within six months that the interest at the rate of 12% per annum becomes payable to the assessee. The mere fact that the petitioner-assessce paid the amount long back in 1990, which is infact much before the judgment of the Supreme Court on 20-2-1997, does not entitle the petitioner-firm to claim interest merely on the ground of equity. The argument that the State recovers interest if there is delay in payment of taxes is irrelevant because such payment of interest is in terms of the statutory provisions.
5. We do not think that there is any case made out for exercising our jurisdiction under Article 226 of the Constitution of India merely on the spacious ground of equity and good conscience. The Act has specifically provided for payment of interest in certain situations only. We cannot add more situations under which interest can be paid to the assessee while refunding. This being a fiscal statute, it has to be construed strictly in terms of the provisions of the Act.
6. The learned Counsel for the petitioner-firm has made a passing reference to provisions of the Interest Act, 1978 for basing its claim. We find nothing in the Interest Act which justifies the exercise of powers under Article 226 of the Constitution of India.
7. In the circumstances, we do not find any merit in the writ petition. The writ petition is dismissed. No order as to costs.