TaxTMI 
TaxTMI 
1997 (7) TMI 566
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....riefly stated for the purposes of this judgment, the facts are these: The appellants manufacture and sell petroleum coke, which are goods declared by section 14 of the Central Sales Tax Act, 1956. The appellants are registered as dealers under the Central Act and liable to pay Central sales tax on the petroleum coke that is the subject of inter-State sales. The payments of Central sales tax on inter-State sales of petroleum coke were delayed. For the assessment years 1974 to 1980 the appellants were required by the respondents to pay interest at the rate of 24 per cent per annum thereon, in purported exercise of the provisions of section 35-A of the Assam Sales Tax Act, 1947. The writ petitions were filed by the appellants challenging the imposition of such interest. 3.. The four questions which were referred to the third learned Judge read thus: "(1) Section 9(2) of the Central Act did not visualise any payment of interest. (2) If interest were to be charged by the force of section 35-A of the Assam Sales Tax Act, 1947 which visualises imposition of a minimum interest at the rate of 6 per cent per annum, the same would violate section 15(a) of the Central Act which has....
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....ok the same view and held that interest was payable by the appellants on account of delay in payment of Central sales tax even though no specific provision had been made in the Central Act in this regard. 6.. Our attention was invited to the Constitution Bench judgment in J.K. Synthetics Ltd. v. Commercial Taxes Officer [1994] 94 STC 422 (SC); [1994] 4 SCC 276, where it has been held that provisions relating to the charging and levying of interest in a statute are provisions of substantive law. The relevant paragraph of the judgment may be extracted. "16. It is well-known that when a statute levies a tax it does so by inserting a charging section by which a liability is created or fixed and then proceeds to provide the machinery to make the liability effective. It, therefore, provides the machinery for the assessment of the liability already fixed by the charging section, and then provides the mode for the recovery and collection of tax, including penal provisions meant to deal with defaulters. Provision is also made for charging interest on delayed payments, etc. Ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construct....
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....ed from the above: interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf. 8.. Our attention was also invited to the Constitution Bench judgment in Khemka & Co. [1975] 35 STC 571 (SC) where the provisions of section 9(2) of the Central Sales Tax Act, 1956 were analysed. Ray, C.J., taking the majority view, observed: "Section 9(2) of the Central Act first provides that the authorities empowered to assess, reassess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, reassess and enforce payment of tax including any penalty payable by a dealer under the Central Act. The State sales tax authorities are thus created agents of the Government of India. The second important part in section 9(2) of the Central Act is that the State authorities shall assess, reassess, collect and enforce payment of tax including any penalty payable by the dealer under the Central Act as if the tax or penalty payable by such a dealer under the Central Act is a tax or penalty payable under the general sales....
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....ons of the State Act in regard to assessment, reassessment, collection and enforcement of payment of tax including any penalty payable under the Central Act. " 9.. Ray, C.J., concluded by holding that the provision in the State Sales Tax Act imposing penalty for non-payment of sales tax within the prescribed time period was not attracted to impose penalty on dealers under the Central Sales Tax Act in respect of tax and penalty payable under the Central Act. A penalty was a statutory liability. The Central Act contained specific provisions in respect of penalty. Those were the only provisions available against dealers under the Central Act. Each State Sales Tax Act contained provisions for penalties. These provisions in some cases were also for failure to submit a return or failure to register. These provisions could not apply to dealers under the Central Act because the Central Act made no similar provisions. The learned Judge added, "The Central Act is a self-contained code which by charging section creates a liability for tax and which by other sections creates a liability for penalty and imposes penalty. Section 9(2) of the Central Act creates the State authorities as agencie....