Madras High Court
M/S.Global Poly Bags Industries (P) Ltd vs The Commercial Tax Officer-I on 30 August, 2018
Author: J.Nisha Banu
Bench: J.Nisha Banu
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 30.08.2018
CORAM
THE HONOURABLE MRS.JUSTICE J.NISHA BANU
W.P(MD)No.13042 of 2009
and
M.P(MD)No.1 of 2009
M/s.Global Poly bags Industries (P) Ltd.,
Represented by its Managing Director,
Thiru.T.Muralidharan
D.No.500-A, Perali Road,
Virudhunagar. ... Petitioner
vs.
The Commercial Tax Officer-I,
C.T. Buildings, Madurai Road,
Virudhunagar. ... Respondent
Writ Petition is filed under Article 226 of the Constitution of India,
for issuance of a Writ of Certiorarified Mandamus, to call for the records
relating to the notice issued by the respondent in TNGST 5721131/02-03 dated
13.11.09 received by the petitioner on 16.11.2009 and quash the same and to
direct the respondent to issue notice inviting objections by following the
decisions of the Hon'ble Supreme Court and Hon'ble High Court before passing
final orders in the levy of interest.
!For Petitioner : Mr.M.MD.Ibrahim Ali
^For Respondent : Mr.D.Muruganandam
Additional Government Pleader
:ORDER
The present writ petition has been filed for issuance of a Writ of Certiorarified Mandamus, to call for the records relating to the notice issued by the respondent in TNGST 5721131/02-03 dated 13.11.09 received by the petitioner on 16.11.2009 and quash the same and to direct the respondent to issue notice inviting objections by following the decisions of the Hon'ble Supreme Court and High Court before passing final orders in the levy of interest.
2.Heard the learned counsel for the petitioner and the learned Additional Government Pleader appearing for the respondent.
3.The petitioner has challenged the notice issued by the respondent calling upon him to pay interest under Section 24(3) of the Tamil Nadu General Sales Tax Act, 1959, for the belated payment of tax. The impugned notice has been issued for the Assessment years 2002-03.
4.Learned counsel for the petitioner would contend that the issue raised in this writ petition is covered by the decision of the Hon'ble Supreme Court in EID Parry (India) Ltd., vs. Assistant Commissioner of Commercial Taxes, Chennai reported in 2005 Vol.141 STC 12, wherein, it has been held as follows:-
''That the tax under Section 13(2) in the absence of any determination, by any assessing authority was tax as per the returns. In this case, the tax as per the monthly returns had been paid within the time and there was no assessment, even provisional by the assessing authority prior to final assessment made after the revised return had been filed. Interest become payable under Section 24(3) on an amount remaining unpaid after the date specified for its payment under Section 24(1) which dealt with an assessed tax or tax which had become payable under the Act. In the absence of assessment even provisional and a notice of demand, no interest was payable under Section 24(3). There was no provision under Tamilnadu General Sales Tax Act 1959 which permitted charging interest unless and until there had been a provisional assessment and a notice of demand prescribing the period within which the tax has to be paid. Therefore, the claim for interest under Section 24(3) from the date of advances was paid to the sugarcane growers was not sustainable.''
5.Learned counsel further submitted that considering the above decision, this Court in W.P.No.37633 of 2005 has quashed the impugned notice therein and the order made in the said writ petition reads as under:-
''2.The only issue which falls for consideration in this writ petition is whether the respondent was justified in demanding interest at 2% under Section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 (''TNGST Act'' in short). Admittedly, the petitioner had paid the taxes much prior to the order of assessment being passed. In such circumstances, can the respondent levy interest under Section 24(3). We need not labour much on this issue as the matter has been settled by the Hon'ble Supreme Court in the date of E.I.D Parry (India) Ltd., vs. Assistant Commissioner of Commercial Taxes, Chennai reported in 2005 Vol 141 STC, wherein it has been held that when there is no assessment even provisionally, the assessing authority cannot demand interest and that interest become payable under Section 24(3) on an amount remaining unpaid after the date specified for its payment under Section 24(1).
3.It was, further, held that in the absence of any assessment even provisional, no notice of demand on interest could be demanded under Section 24(3). In the instant case, it is not disputed by the respondent that the entire tax liability was cleared by the petitioner much prior to the assessment proceedings being commenced by issuance of notice. Therefore, by applying the law laid down by the Hon'ble Supreme Court in E.I.D. Parry (India) Ltd., the impugned notice is held to be illegal and unsustainable in law.
For the above reasons, the writ petition is allowed and the impugned notice is quashed. No costs.''
6.Learned counsel for the Revenue does not dispute the above legal position.
7.In the result, this writ petition is allowed and the impugned notice in TNGST 5721131/02-03, dated 13.11.09, is set aside. Consequently, connected miscellaneous petition is closed.
To The Commercial Tax Officer-I, C.T. Buildings, Madurai Road, Virudhunagar.
.