Court modifies tax demand interest calculation, orders recalculation from return filing date.

The court allowed the appeal and modified the order by determining that interest on the additional tax demand should be calculated from the date of filing the return, not the date of notice. The Assessing Authority was directed to recalculate the interest based on this ruling.

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Issues Involved:
1. Eligibility of income from repair services to tax.
2. Taxability of warranty claims received as credit notes.
3. Calculation of interest on additional tax demand.

Summary:

1. Eligibility of income from repair services to tax:
The Deputy Excise & Taxation Commissioner-cum-Revisional Authority modified the initial assessment, stating that income of Rs. 2,06,807/- received by the dealer from M/s. Asia Motor Works for the repair of accidental trucks is taxable. The dealer did not show the sale of parts consumed in the repair, nor did the Assessing Authority levy tax on it initially. Consequently, a tax of Rs. 27,143/- was levied on this amount.

2. Taxability of warranty claims received as credit notes:
The Revisional Authority also determined that warranty claims amounting to Rs. 22,56,885/- received in the form of credit notes from M/s. Asia Motor Works for goods replaced during warranty claims are liable to tax. The tax levied on this amount was Rs. 2,96,216/-. Therefore, the total tax levied was Rs. 3,23,359/-.

3. Calculation of interest on additional tax demand:
The primary issue on appeal was the calculation of interest on the additional tax demand. Initially, the Assessing Authority calculated interest from the date of filing the return (01.10.2011) to the date of notice (23.12.2015), resulting in a total due amount of Rs. 6,46,718/-. The Haryana Tax Tribunal modified this, stating that interest on the additional demand should be from the date of the Revisional Authority's order, not the filing date.

The court referred to several precedents, including the judgment in M/s. Faridabad Fabricators (P) Ltd., which supported that interest is chargeable from the date the tax was supposed to be paid according to Section 14(6) of the HVAT Act. The court concluded that the interest on the additional demand is indeed leviable from the date of filing the return.

Final Judgment:
The appeal was allowed, and the order dated 03.02.2017 by the Haryana Tax Tribunal was modified to state that interest on the additional demand is leviable from the date of filing the return. The Assessing Authority was directed to recalculate the interest accordingly.

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