Court rules petitioner must pay interest on deferred sales tax under statutory provisions. Amendments clarificatory. BIFR scheme doesn't exempt.

The court dismissed the writ petitions, holding that the petitioner was liable to pay interest on deferred sales tax as per statutory provisions. The amendments by G.O. Ms. No. 119 were deemed clarificatory, aligning with statutory requirements. The BIFR scheme did not exempt the petitioner from paying interest, thus A.P. General Sales Tax Act provisions prevailed. Supreme Court appeals were also dismissed, upholding the High Court's decision.

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Issues Involved:
1. Liability to pay interest on deferred sales tax.
2. Binding nature of the scheme framed by the BIFR.
3. Interpretation of Government Orders (G.O.s) and their amendments.
4. Applicability of statutory provisions under the A.P. General Sales Tax Act.

Detailed Analysis:

1. Liability to Pay Interest on Deferred Sales Tax:
The central issue was whether the petitioner was liable to pay interest on the deferred sales tax. The petitioner argued that the deferment amounted to a deferment of liability, not just payment, thus no interest should accrue during the deferment period. However, the court held that the deferment of sales tax did not imply deferment of liability. The tax became due when the taxable transaction occurred, and interest was applicable from that point. The G.O. Ms. No. 119 clarified that deferred sales tax would carry an interest of 18% per annum, payable in one lump sum after seven years.

2. Binding Nature of the Scheme Framed by the BIFR:
The petitioner contended that the State Government was bound by the scheme framed by the BIFR under Section 18(8) of the Sick Industrial Companies (Special Provisions) Act, 1985. The scheme provided for deferment of sales tax liabilities but did not mention interest on deferred tax. The court found that the scheme did not explicitly exempt the petitioner from paying interest on deferred tax. Therefore, the statutory provisions of the A.P. General Sales Tax Act, which mandated interest on deferred payments, prevailed.

3. Interpretation of Government Orders (G.O.s) and Their Amendments:
The petitioner challenged the amendments made by G.O. Ms. No. 119 to G.O. Rt. No. 66. The original G.O. provided for sales tax deferral without mentioning interest, while the amended G.O. imposed an 18% interest on deferred tax. The court viewed the amendment as a clarification rather than a new imposition, aligning it with statutory requirements. The amendment did not alter the deferment period or the amount but clarified the interest rate applicable to deferred payments.

4. Applicability of Statutory Provisions under the A.P. General Sales Tax Act:
The court examined the statutory framework under the A.P. General Sales Tax Act, which required payment of interest on deferred tax payments. The court emphasized that the statutory liability to pay interest could not be waived unless explicitly stated in the scheme or the G.O.s. The court referred to Section 16(4) of the Act, which mandated interest on deferred tax payments, and concluded that the State Government lacked the authority to exempt the petitioner from this statutory obligation.

Conclusion:
The court dismissed the writ petitions, holding that the petitioner was liable to pay interest on the deferred sales tax as per the statutory provisions. The amendments made by G.O. Ms. No. 119 were deemed clarificatory and consistent with the statutory requirements. The scheme framed by the BIFR did not explicitly exempt the petitioner from paying interest, and thus, the statutory provisions under the A.P. General Sales Tax Act prevailed. The appeals before the Supreme Court were also dismissed, affirming the High Court's judgment.

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