2004 (8) TMI 664

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....perused the records.   3. The learned counsel for the petitioner submitted that the respondent herein initiated recovery proceedings under section 13(3)(b) of the Karnataka Sales Tax Act, 1957 ("the KST Act" for short) for recovery of C.S.T. and Q.E. of Rs. 28,26,722 which includes penalty/interest of Rs. 2,21,446 for the assessment year 1998-99. It is submitted that as per the Central Sales Tax Act the State has no power to levy interest on the arrears of central sales tax therefore the revision petitioner has rightly filed objection before the Spl. J.M.F.C. (Sales Tax) contending that it is not liable to pay the interest levied by the respondent. The trial court, without looking into the amended provisions, straight away rejected ....

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.... the sales tax authorities of the State cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest thereon." 4.. The learned counsel for the petitioner has also relied on another decision of the Supreme Court of India reported in the case of K.M. Sharma v. Income-Tax Officer [2002] 254 ITR 772, wherein the honourable Supreme Court held that: "A taxing provision imposing liability is governed by the normal presumption that it is not retrospective and the settled principle of law is that the law to be applied is that which is in force in the assessment year unless otherwise provided expressly or by necessary implication. Even a procedural provision cannot, in the absence of clear contrary intendmen....

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....itioner is not liable to pay any interest levied by the respondent-State accordingly the revision petitioner has rightly filed objection to waive the interest, hence that the revision petitioner is not liable to pay the interest on the tax as claimed by the respondent-State. 8.. It is pertinent to note that the Central Government has passed Finance Bill, 2000 (Bill No. 38 of 2000) wherein section 9(2B) has been inserted in section 9 of the Central Sales Tax Act, 1956. It is relevant to quote sections 9(2B), which reads as follows: "Section 9(2B): If the tax payable by any dealer under this Act is not paid in time, the dealer shall be liable to pay interest for delayed payment of such tax and all the provisions for delayed payment of s....

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....hority for the refund of any amount received or realised by way of such interest; (b) no court, Tribunal or other authority shall enforce any decree or order directing the refund of any amount received or realised by way of such interest;   (c) where any amount which had been received or realised by way of such interest is refunded before the date on which the Finance Act, 2000 receives the assent of the President and such refund would not have been allowed if the provisions of sub-section (1) had been in force on the date on which the order for such refund was passed, the amount so refunded may be recovered as an arrear of tax under the Central Sales Tax Act; (d) any proceeding, act or thing which could have been validly take....

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.... law to be applied which is in force during the assessment year unless otherwise provided expressly or by necessary implication, is concerned; with due respect to the aforesaid decision of the apex Court the facts of this case are quite different from that of the ratio laid down in the aforesaid decision. In the instant case the revision petitioner has not disputed about the levy of tax and also not disputed that it has not paid the arrears of sales tax for the assessment year 1998-99. Therefore, as on June 2, 1999 the respondent has initiated recovery proceedings before the Magistrate. The revision petitioner has not made clear whether it has paid the entire arrears of tax before commencement of the amended provisions of section 9. Therefo....