indital Constructions Machinery Ltd. Vs. Deputy Commissioner of Commercial Taxes - Court Judgment

Excerpt:
- tenders: [v. gopala gowda & l. narayana swamy, jj] tender - short listing of tenders by state authority absence of norms and guidelines required to be incorporated in tender invitation held, even in absence of such guidelines and norms, it is bounden duty of state authority to assign reasons as to why petitioner has been excluded from issuance of tenders. action of state authority not only suffers from arbitrariness but also suffers from legal mala fides. short listing is an administrative action, must be supported by valid and acceptable reasons - (2) notwithstanding anything contained in any judgment, decree or order of any court or tribunal or other authority, all penalties under the general sales tax law of any state imposed or purporting to have been imposed in pursuance of the.....orderk. ramanna, j.1. this revision is directed against the orders dated november 21, 2000 passed by the spl. j.m.f.c. (sales tax), bangalore, whereby the learned magistrate rejected the objection dated april 4, 2000 filed by the revision petitioner for payment of arrears of sales tax amount to the tune of rs. 2,21,446.2. heard the learned counsel for the petitioner and the learned high court government pleader and perused the records.3. the learned counsel for the petitioner submitted that the respondent herein initiated recovery proceedings under section 13(3)(b) of the karnataka sales tax act, 1957 ('the kst act' for short) for recovery of c.s.t. and q.e. of rs. 28,26,722 which includes penalty/interest of rs. 2,21,446 for the assessment year 1998-99. it is submitted that as per the.....

Judgment:
ORDER

K. Ramanna, J.

1. This revision is directed against the orders dated November 21, 2000 passed by the Spl. J.M.F.C. (Sales Tax), Bangalore, whereby the learned Magistrate rejected the objection dated April 4, 2000 filed by the revision petitioner for payment of arrears of sales tax amount to the tune of Rs. 2,21,446.

2. Heard the learned Counsel for the petitioner and the learned High Court Government Pleader and perused the records.

3. The learned Counsel for the petitioner submitted that the respondent herein initiated recovery proceedings Under Section 13(3)(b) of the Karnataka Sales Tax Act, 1957 ('the KST Act' for short) for recovery of C.S.T. and Q.E. of Rs. 28,26,722 which includes penalty/interest of Rs. 2,21,446 for the assessment year 1998-99. It is submitted that as per the Central Sales Tax Act the State has no power to levy interest on the arrears of central sales tax therefore the revision petitioner has rightly filed objection before the Spl. J.M.F.C. (Sales Tax) contending that it is not liable to pay the interest levied by the respondent. The trial court, without looking into the amended provisions, straight away rejected the objection filed by the revision petitioner. Further, it is contended that the amended provisions of the Central Sales Tax Act came into force with effect from April 1, 2000 therefore, the same is not applicable to the cases pending prior to the amendment, i.e., April 1, 2000. Finally, it is submitted that the order under revision passed by the trial Court is incorrect and liable to be set aside. Further it is contended that the revision petitioner was due in a sum of Rs. 26,05,271 towards arrears of sales tax for the assessment year 1998-99, but the State has levied interest for that tax under Central Sales Tax Act which is incorrect. In support of his contention the learned Counsel for the petitioner relied on a decision reported in the case of India Carbon Ltd, v. State of Assam [1997] 106 STC 460, wherein the apex Court has held that:

The substantive law that the sales tax authorities of the State must apply in assessing and collecting Central sales tax is the Central Sales Tax Act, 1956. In such application for procedural purposes alone, the provisions of the State Act are available. The provisions in the latter part of Section 9(2) of the Central Sales Tax Act can be employed by the sales tax authorities of the State only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax, the sales tax authorities of the State cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest thereon.

4. The learned Counsel for the petitioner has also relied on another decision of the Supreme Court of India reported in the case of K.M. Sharma v. Income-Tax Officer : [2002]254ITR772(SC) , wherein the honourable Supreme Court held that:

A taxing provision imposing liability is governed by the normal presumption that it is not retrospective and the settled principle of law is that the law to be applied is that which is in force in the assessment year unless otherwise provided expressly or by necessary implication. Even a procedural provision cannot, in the absence of clear contrary intendment expressed therein, be given greater retrospectivity than is expressly mentioned so as to enable the authorities to effect finality of tax assessments or to reopen liabilities which have become barred by lapse of time.

5. On the other hand the learned High Court Government Pleader submitted that Under Section 13(3)(b) of the KST Act, 1957 the learned Magistrate is empowered to recover the amount from the revision petitioner towards arrears of tax with interest. Since the revision petitioner has not paid the arrears of tax during that year and therefore the respondent has rightly levied the interest for the assessment year 1998-99. It is further submitted that it is the duty of the revision petitioner to pay the interest of Rs. 2,21,446 on the tax claimed by the authorities. Therefore, the learned Magistrate has rightly rejected the objection filed by the respondent on April 4, 2000. Hence the present revision petition is not at all maintainable.

6. I have carefully perused the impugned order under challenge. It is an admitted fact that the petitioner is due in a sum of Rs. 26,05,277 towards Central sales tax for the assessment year 1998-99. Since the petitioner has not paid the said tax in time therefore the respondent-State levied the interest of Rs. 2,21,446 on the said tax. Totally it has claimed Rs. 28,26,776.

7. According to the learned Counsel for the petitioner, since the revision petitioner has paid substantial amount of tax therefore the revision petitioner is not liable to pay any interest levied by the respondent-State accordingly the revision petitioner has rightly filed objection to waive the interest, hence that the revision petitioner is not liable to pay the interest on the tax as claimed by the respondent-State.

8. It is pertinent to note that the Central Government has passed Finance Bill, 2000 (Bill No. 38 of 2000) wherein Section 9(2B) has been inserted in Section 9 of the Central Sales Tax Act, 1956. It is relevant to quote sections 9(2B), which reads as follows:

Section 9(2B): If the tax payable by any dealer under this Act is not paid in time, the dealer shall be liable to pay interest for delayed payment of such tax and all the provisions for delayed payment of such tax and all the provisions relating to due date for payment of tax, rate of interest for delayed payment of tax and assessment and collection of interest for delayed payment of tax, of the general sales tax law of each State, shall apply in relation to due date for payment of tax, rate of interest for delayed payment of tax, and assessment and collection of interest for delayed payment of tax under this Act in such States as if the tax and the interest payable under this Act were a tax and an interest under such sales tax law.

Further it is relevant to quote Section 9(2) (a) to (d) (sic) also, which read as follows:

(2) Notwithstanding anything contained in any judgment, decree or order of any court or Tribunal or other authority, all penalties under the general sales tax law of any State imposed or purporting to have been imposed in pursuance of the provisions of Section 9 of the Central Sales Tax Act, and all proceedings, acts or things taken or done for the purposes of, or in relation to, the imposition or collection of such interest, before the commencement of this Act, shall, for all purposes, be deemed to be and to have always been imposed, taken or done as validly and effectively as if the provisions of Sub-section (1) had been in force when such interest was imposed or proceedings or acts or things were taken or done and, accordingly,--

(a) no suit or other proceedings shall be maintained or continued in, or before, any court or any Tribunal or other authority for the refund of any amount received or realised by way of such interest;

(b) no court, Tribunal or other authority shall enforce any decree or order directing the refund of any amount received or realised by way of such interest;

(c) where any amount which had been received or realised by way of such interest is refunded before the date on which the Finance Act, 2000 receives the assent of the President and such refund would not have been allowed if the provisions of Sub-section (1) had been in force on the date on which the order for such refund was passed, the amount so refunded may be recovered as an arrear of tax under the Central Sales Tax Act;

(d) any proceeding, act or thing which could have been validly taken, continued or done for the imposition or collection of such interest at any time before the commencement of this section if the provisions of Sub-section (1) had then been in force but which had not been taken, continued or done, may, after such commencement, be taken, continued or done.

indicate that in view of the amended provisions of Section 9 the petitioner is liable to pay interest on tax even from the date prior to the amendment. As per the amended provisions of Section 9(2), even any judgment, decree or order of any court, Tribunal or other authority will not come in the way of recovery of such tax or interest on tax.

9. In fact the decision rendered by the honourable apex Court in India Carbon Ltd.'s case [1997] 106 STC 460, which was delivered on July 16, 1997 is much prior to the date of amendment to Section 9 of the Central Sales Tax Act, 1956. Therefore, the ratio laid down in the aforesaid decision cannot be made applicable to the present case.

10. As far as the ratio laid down by the Supreme Court in the case of KM. Sharma : [2002]254ITR772(SC) , that the taxing provision imposing liability is governed by the normal presumption that it is not retrospective and that the principles of law to be applied which is in force during the assessment year unless otherwise provided expressly or by necessary implication, is concerned; with due respect to the aforesaid decision of the apex Court the facts of this case are quite different from that of the ratio laid down in the aforesaid decision. In the instant case the revision petitioner has not disputed about the levy of tax and also not disputed that it has not paid the arrears of sales tax for the assessment year 1998-99. Therefore, as on June 2, 1999 the respondent has initiated recovery proceedings before the Magistrate. The revision petitioner has not made clear whether it has paid the entire arrears of tax before commencement of the amended provisions of Section 9. Therefore, that the levy of interest even for the assessment year 1998-99 are made applicable. Hence, I do not find that any illegal or incorrect findings are recorded by the trial court in rejecting the objection filed by the revision petitioner.

11. In view of the above facts and circumstances of the case, this revision petition fails and the same is liable to be dismissed. Accordingly, it is dismissed. However, if there is any excess claim of interest made by the respondent-authorities then the revision petitioner is at liberty to claim refund of the same from the concerned assessing authority subject to deposit of the entire arrears of sales tax with interest of Rs. 2,21,446 within 30 days from the date of receipt of a copy of this order.