1998 (3) TMI 661 - HC - VAT and Sales Tax

High Court upholds Tribunal decisions on account books & interest deletion under Central Sales Tax Act

Commissioner, Trade Tax, UP., Lucknow Versus Ashoka Rice Mills

Commissioner, Trade Tax, UP., Lucknow Versus Ashoka Rice Mills - [1999] 112 STC 566 (All) Issues:1. Rejection of account books by the Tribunal.2. Deletion of interest levied for non-payment of admitted tax under the Central Sales Tax Act, 1956.Detailed Analysis:1. Rejection of Account Books:The judgment involved four connected trade tax revisions filed by the Commissioner of Sales Tax against the same assessee for the assessment year 1984-85. The Tribunal had accepted the book version of the assessee, leading to the rejection of the account books by the assessing authority. The rejection was based on two reasons: higher electricity consumption compared to other rice millers and lower recovery of rice. However, the Tribunal held that the account books could not be rejected solely on these grounds. It was noted that the recovery of rice in the case of the assessee was comparable to that of other rice millers accepted by the department. Additionally, the Tribunal referred to a previous decision stating that excess electricity consumption alone cannot justify the rejection of account books. The High Court agreed with the Tribunal, emphasizing that the rejection of account books should only occur if there are concrete grounds to prove their unreliability.2. Deletion of Interest under Central Sales Tax Act:The Tribunal also deleted the interest levied for non-payment of admitted tax under the Central Sales Tax Act, 1956. It was found that the assessee had inadvertently deposited more tax under the U.P. Trade Tax Act, 1948, than required based on the return. The excess amount was adjusted against the tax due under the Central Sales Tax Act. The Tribunal concluded that after this adjustment, the assessee was not liable for any interest. The High Court supported this decision, highlighting that there is no substantive provision in the Central Sales Tax Act for levying interest on delayed tax payments. Referring to a Supreme Court decision, it was clarified that interest can only be charged if the relevant statute explicitly provides for it. As the Central Sales Tax Act lacked such a provision, the levy of interest was deemed unjustified.In conclusion, the High Court dismissed all revisions, affirming the Tribunal's decisions on the rejection of account books and deletion of interest under the Central Sales Tax Act. The judgment emphasized the importance of concrete grounds for rejecting account books and the necessity of a substantive provision for levying interest on tax payments.