2008 (9) TMI 911 - HC - VAT and Sales Tax

Court dismisses revisions challenging Trade Tax Tribunal's interest removal decision for metallized film dealer

Commissioner, Commercial Tax, Dehradun Versus Jalpac India Ltd.

Commissioner, Commercial Tax, Dehradun Versus Jalpac India Ltd. - [2009] 26 VST 168 (Utk) Issues:1. Interpretation of provisions regarding interest on tax under Central Sales Tax Act, 1956 and U.P. Trade Tax Act, 1948.2. Applicability of interest on admitted tax or tax payable by the assessee.3. Dispute over the imposition of interest by the assessing officer.4. Legal implications of failure to show form C for concessional tax rate.Analysis:The judgment pertains to two revisions arising from the same order and involving a common question of law. The revisions challenge the Trade Tax Tribunal's decision to allow the respondent's appeals, setting aside the assessing officer's order and the Joint Commissioner's affirmation. The key issue revolves around whether the Tribunal erred in law by removing the interest imposed by the assessing officer, disregarding the provision in section 9 of the Central Sales Tax Act, 1956.The respondent, engaged in the business of metallized polyester film and paper, had their assessment completed under the Central Sales Tax Act, 1956. The assessing officer disallowed exemption under section 4A of the U.P. Trade Tax Act due to non-receipt of form C. Subsequently, the assessment order was rectified, but interest was imposed on the dealer. The Joint Commissioner upheld this decision, leading to the dealer's appeal to the Trade Tax Tribunal, which ruled in favor of the respondent.The court analyzed the relevant provisions of law, including sub-section (2A) of section 9 of the Central Sales Tax Act, 1956, and section 8(1) of the U.P. Trade Tax Act, 1948. It was established that interest is payable on the admitted tax or the tax disclosed by the assessee. In this case, the interest was demanded based on the difference in tax due to the non-showing of form C. However, since the admitted tax was paid within the prescribed time, and the additional tax imposed by the assessing officer was also paid promptly, there was no liability for the interest as demanded.Referring to the case law of J.K. Synthetics Ltd. v. Commercial Taxes Officer, the court emphasized that 'tax payable' refers to the tax due under the specific provision of law, and in this instance, the interest demand by the assessing officer was unwarranted. Consequently, the court concluded that the interest was only applicable to the admitted tax or tax payable as per the return filed by the dealer. As a result, the question of law was answered negatively, leading to the dismissal of both revisions.In conclusion, the court dismissed the revisions, upholding the Tribunal's decision to remove the interest imposed by the assessing officer, as the dealer had met their tax obligations within the stipulated time frame, rendering the interest demand unjustified.