Interest on delayed Central sales tax upheld under amended recovery scheme; constitutional challenge to validating provisions failed.

Interest on delayed Central sales tax payments was treated as recoverable under the amended statutory scheme because the Central enactment itself was read as containing a substantive basis for levy and recovery, with State sales tax provisions on interest and penalties applied for collection. The earlier absence of such a basis was regarded as cured by the amendment, so the challenge to interest levied under the Kerala sales tax framework failed. The constitutional attack on sections 9(2), 9(2A) and 9(2B) of the Central Sales Tax Act, together with the validating amendment, was also rejected because the amended and retrospectively validated scheme was held not to violate the limitations argued. The impugned interest demand was sustained, subject only to correction of any computation error.

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Issues: (i) Whether interest could be levied on delayed payment of Central sales tax by invoking section 23(3) of the Kerala General Sales Tax Act, 1963; (ii) Whether sections 9(2), 9(2A) and 9(2B) of the Central Sales Tax Act, 1956, together with the validating amendment, were unconstitutional or otherwise invalid.

Issue (i): Whether interest could be levied on delayed payment of Central sales tax by invoking section 23(3) of the Kerala General Sales Tax Act, 1963.

Analysis: The statutory scheme was examined in the light of the amendment by which the Central sales tax law itself was made to provide for recovery of tax and interest, and to adopt the State sales tax law provisions relating to interest and penalties. The earlier defect noted in the absence of a substantive provision for interest was treated as removed by the amendment. Once the Central enactment itself contained an operative basis for levy of interest, the State provision could be applied for recovery of interest on delayed Central sales tax.

Conclusion: The levy of interest on delayed payment of Central sales tax was held to be permissible and the challenge on this ground failed.

Issue (ii): Whether sections 9(2), 9(2A) and 9(2B) of the Central Sales Tax Act, 1956, together with the validating amendment, were unconstitutional or otherwise invalid.

Analysis: The constitutional challenge was rejected because the validity of the amended scheme had already been upheld, including the adoption of State law provisions for interest and penalty and the retrospective validation of earlier levies. The Court also found no violation of the constitutional limitations urged by the petitioner, and no arbitrariness in applying the State-prescribed rate of interest to Central sales tax arrears when the revenue collected was assigned to the State for its purposes.

Conclusion: The provisions and the validating amendment were held valid and the constitutional challenge failed.

Final Conclusion: The writ petition did not disclose any ground for interference, and the impugned interest demand was sustained, leaving only the limited opportunity to raise any calculation error before the authority.

Ratio Decidendi: Where the Central sales tax statute, as amended, contains a substantive provision for levy and recovery of interest, the State sales tax provisions on interest may be applied for collection, and the validity of such retrospective validation cannot be successfully impeached on the grounds urged here.

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