Punjab-Haryana High Court
M/S Lakhi Ram Surinder Singh vs State Of Haryana on 5 March, 2010
Bench: Ashutosh Mohunta, Mehinder Singh Sullar
GSTR No.13 to 20 of 1997 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
GSTR No.13 to 20 of 1997
DATE OF DECISION: March 5, 2010
M/S LAKHI RAM SURINDER SINGH, M.T. ROHTAK ...PETITIONER
VERSUS
STATE OF HARYANA ...RESPONDENT
CORAM: HON'BLE MR. JUSTICE ASHUTOSH MOHUNTA.
HON'BLE MR. JUSTICE MEHINDER SINGH SULLAR.
PRESENT: MR. AKSHAY BHAN, ADVOCATE FOR THE PETITIONER.
MR. G.S. CHAHAL, ADDl.A.G., HARYANA.
ASHUTOSH MOHUNTA, J.(ORAL)
This judgement shall dispose of GSTR No.13 to 1997 as well as GSTR No.14 of 1997 to GSTR No.20 of 1997. The Sales Tax Tribunal, Haryana has referred the following question of law for adjudication by this Hon'ble Court:-
"Whether the interest levied and charged under Section 25(5) of the Haryana General Sales Tax Act, 1973 is legal?"
Briefly the facts of the case are that the assessee purchased sun- baked bricks from registered dealers after payment of sales tax, as the bricks were taxable at the first stage of sale. After purchase of the bricks, the assessee burnt them in the kiln and sold them without charging any sales tax from the subsequent purchasers. The assessee claimed deductions under Section 18 of the Haryana General Sales Tax Act, 1973 (for short 'the Act').
The assessing authority did not allow the claim on the ground GSTR No.13 to 20 of 1997 -2- that unburnt bricks did not come within the purview of the Notification dated 5.5.1973, issued by the Haryana Government. Accordingly the assessing authority created additional demand against the applicant and levied tax besides interest and penalty imposed under Section 25(5) and Section 47 of the Act. The assessee filed application under Section 42 of the Act wherein it was averred that no interest is payable on the additional demand created by the Department. The assessee also claimed that the question of law as framed by him in the application be referred to the High Court. This request was turned down by the Tribunal. It was challenged by the assessee in Sales Tax case No.21 of 1988 in which the High Court directed the Tribunal to frame the question of law as mentioned in the opening paragraph and to again refer the matter to the High Court. This is how the reference has been made.
Mr. Akshay Bhan, counsel for the petitioner has placed reliance on J.K. Synthetics Limited vs. Commercial Taxes Officer, reported as (1994) 4 SCC 276 and Frick India Limited and another vs. State of Haryana and others, reported as 1994 (Vo.95) Sales Tax Cases 188, wherein while relying on the judgement in J.K. Synthetics' case (supra) the Constitutional Bench of the Supreme Court held as under:-
"Under section 25 of the Haryana General Sales Tax Act, 1973, interest is due only on the amount of tax payable on the basis of the return. So long as the dealer pays the tax which according to him is due on the basis of the information supplied in the return filed by him, there would be no default on his part to meet his statutory obligation. The law does not envisage the dealer to predict the final assessment which he GSTR No.13 to 20 of 1997 -3- files the return and expect him to pay the tax on that basis to avoid the liability to pay interest."
The present case is squarely covered by the aforementioned judgements in J.K. Synthetics' case (supra) and Frick India Ltd.'s case (supra). It is thus held that the assessee would not be liable to pay any interest on the additional demand as was created by the Department. The question of law is accordingly answered in favour of the assessee and against the Revenue.
The aforesaid eight references are disposed of.
(ASHUTOSH MOHUNTA)
JUDGE
March 5, 2010 (MEHINDER SINGH SULLAR)
Gulati JUDGE