Cooperative Society not liable for penal interest on belated tax remittance; Court quashes order.

The court held that the petitioner, a Cooperative Society, was not liable to pay penal interest under Section 24(3) of the Act for belated remittance of differential tax. The court determined that the demand for interest was not legally sustainable based on the principles established by the Supreme Court. Consequently, the Writ Petition was allowed, the impugned order was quashed, and no costs were awarded.

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Issues:
1. Whether the petitioner is liable to pay penal interest under Section 24(3) of the Act for belated remittance of differential tax.
2. Whether the provisions of Section 13 of the Act are applicable in the present case.
3. Whether the demand for interest is legally tenable based on the principles established by the Supreme Court in E.I.D Parry (India) Ltd. vs. Assistant Commissioner of Commercial Taxes.

Analysis:
1. The petitioner, a Cooperative Society, sought a Writ of Certiorari to challenge an order calling for the payment of penal interest under Section 24(3) of the Act. The petitioner had initially paid tax at a reduced rate of 4% instead of 10% for Skimmed Milk Powder, based on a government order. However, after a temporary injunction expired, the petitioner paid the differential tax at 10%. The question arose whether the belated payment of differential tax attracts interest under Section 24(3). The court examined the circumstances under which this provision would be applicable, citing the Supreme Court's ruling in E.I.D Parry case.

2. The court delved into the applicability of Section 13 of the Act, which deals with advance payment of tax and provisional assessment. The Additional Government Pleader argued that once returns are accepted, there should be no further assessment. However, in this case, the petitioner did not admit the return, and the assessment to tax at 10% was made after a significant delay. The court analyzed the requirement for provisional assessment and the crystallization of tax liability, ultimately concluding that Section 13 did not apply to the facts of this case.

3. Relying on the legal principles established by the Supreme Court in the E.I.D Parry case, the court held that the demand for interest was not legally sustainable. The court found that the petitioner's situation did not meet the criteria for attracting interest under Section 24(3) of the Act. Consequently, the Writ Petition was allowed, the impugned order was quashed, and no costs were awarded. The judgment closed the related application.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the court's reasoning in arriving at its decision.

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