2010 (8) TMI 834 - HC - VAT and Sales Tax

High Court rules on retrospective application of interest provisions, overturns Tribunal decision

The High Court determined that the amended provisions of section 9 of the Central Act apply retrospectively from the date of the parent Act, allowing ... - Issues:1. Interpretation of amended provisions of section 9 of the Central Act.2. Application of previous court decisions in the present case.3. Levying interest on delayed payment prior to a specific date.4. Validity of Assessing Authority's order post-amendment.Interpretation of Amended Provisions of Section 9:The High Court addressed the issue of whether the amended provisions of section 9 of the Central Act are operative retrospectively when read with the Finance Act, 2000. The Tribunal had referred questions of law regarding this matter. The Court considered the retrospective nature of the amendment and referred to a Supreme Court judgment indicating that the amendment was retrospective from the date of the parent Act. It was held that interest was compensatory and that if the amount due was paid after it became due, the Department was presumed to have lost revenue during the interregnum. Consequently, the Court answered this question in favor of the State.Application of Previous Court Decisions:The Tribunal had applied a decision of the Supreme Court in a previous case, and the issue was whether this application was correct in the present circumstances. The Court examined the application of the decision in the case of Sales Tax Officer v. Oriental Coal Corporation. However, the Court did not provide detailed analysis or discussion on this issue in the judgment.Levying Interest on Delayed Payment:Another issue before the Court was whether interest could be levied on delayed payments made before a specific date. The revisional authority had imposed interest for late payment of tax for certain assessment years. The Tribunal had set aside the demand for interest, citing the amendment to the Central Act only being effective from a certain date. The Court, after considering relevant provisions and precedents, held in favor of the State, indicating that the interest could be demanded for the period prior to the specified date.Validity of Assessing Authority's Order Post-Amendment:The final issue involved the validity of the Assessing Authority's order after the amendment of section 9 of the Central Act. The revisional authority had passed an order imposing interest for late payment of tax, which was later set aside by the Tribunal. The Court, after considering the retrospective nature of the amendment, concluded that the order of the Assessing Authority was rendered illegal and improper post-amendment. The Court answered the questions referred in favor of the State and against the respondent, disposing of the references accordingly.