TaxTMI 
TaxTMI 
TaxTMI 
1988 (4) TMI 407
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....tions have been filed for calling for the records on the file of the first respondent in his TNGST 230737/82-83 (penalty register No. 38/85-86) dated 1st June, 1985 and TNGST 230737/82-83 (penalty register No. 35/85-86) dated 1st June, 1985 and quashing the impugned orders of the first respondent. 2.. It is, inter alia, stated in the affidavits sworn to by the Special Officer of the petitioner-sugar mills that the petitioner-sugar mills are the assessees on the file of the first respondent. The essential raw material for the sugar mills is sugarcane which is taxable at the point of last purchase in the State under serial No. 62 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. The rate of tax is 12 per cent and besides t....
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....ons and the institutions were requested to reschedule the repayments of loans up to 1987. The ICICI imposed a condition for rescheduling of institutional loan and, therefore, suggested that purchase tax and cane cess subsidy should be exempted until the loans were repaid in full. The Director of Sugar also sent proposals to the Government for extending the purchase tax subsidy for a further period of five years. He also recommended the waiver of penal interest. However, the second respondent in G.O. Ms. No. 1047, Industries Department, dated 6th September, 1984 sanctioned Rs. 50,00,000 as term loan for payment of purchase tax arrears. The purchase tax itself could not be paid and in fact a petition was pending for getting purchase tax subsi....
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....y made by the mills during 1982-83 along with the monthly returns, there was a balance of Rs. 31,00,543 due from the mills towards tax and a balance of Rs. 1,89,017 due towards additional sales tax. Therefore, based on this annual return in form A-1, a statutory demand notice in form B-1 for the arrears of tax, and a demand notice in form P for the arrears of additional sales tax were issued on 5th June, 1983 and served on the petitioners on 7th September, 1983. The statutory time-limit of 30 days expired on 7th October, 1983. The petitioners ought to have paid these amounts before 7th October, 1983. But they have paid these arrears on 24th September, 1984 only, i.e., after a delay of 11 months and 17 days. While calculating the interest d....
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....ring which payment has not been made. In this regard, the following observation at page 53 is relied on: "Section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 is constitutionally valid. On a true construction of section 24(3) of the Act, though the word 'penalty' has been used therein, what has been provided for, is nothing more than interest, which is claimed by the State, because the amount of arrears of taxes which should have gone to the coffers of the State is being retained by the dealer, and it is only by way of compensation for use of such of the moneys, which rightly belongs to the State, by the assessee that a payment to the State which has been described as penalty, has been provided for in section 24(3) of the Act. A ....
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....y under section 24(3). Consequently, the requirement of natural justice is expressly excluded by the provision under section 24(3) of the Act." 6.. Following the above observations of the first Bench of this Court, learned counsel for the petitioner in both the writ petitions submits that there cannot be any penal interest levied when rule 18 has been followed by the assessing authority. Rule 18(3) reads as follows: "The return in form A-1 so filed shall, subject to the provisions of sub-rule (4), be provisionally accepted. If the return is submitted without proof of payment as specified in sub-rule (1) of rule 55 for the full amount of tax payable after deducting therefrom the amount, if any, claimed as reimbursement or refund due in the....