TaxTMI 
TaxTMI 
TaxTMI 
2005 (12) TMI 542
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.... on the file of the respondent-Assistant Commissioner for Commercial Taxes in relation to the assessment year 1994-95. Assessment under the CST Act was concluded in the petitioner's case by the assessing authority. However, while so concluding the assessment, the assessing authority had disallowed the exemption in respect of the inter-State sales of arecanut on the ground that the corresponding purchase of the arecanut was not subject to levy of sales tax under the Act. The assessing authority apart from determining the basic tax liability in respect of the inter-State sale of arecanut by invoking the provision of section 9(2A) of the CST Act read with section 6-A(3) of the Act had also levied penalty. The penalty so levied by the asse....
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....ties to collect interest on the delayed payment of Central sales tax amount only and the said provision does not empower the authorities to collect interest on delayed payment of penalty. However, Smt. Niloufer Akbar, learned Additional Government Advocate, while strongly supporting the impugned notice wherein the petitioner has been directed to pay interest as stated above, pointed out that section 9(2-B) of the CST Act which came to be incorporated by validation Act No. 10 of 2000 read with section 13(2) of the Act empowers the State to collect interest on the delayed payment of penalty. She brought to our notice the validation Act No. 10 of 2000 and also section 13(2) of the Act. In the light of the rival submissions made by the learne....
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....ties of the person or persons liable to pay the tax or any other amount due under this Act, and (ii) the person or persons liable to pay the tax other than tax payable in advance for any year under sections 12 and 12B or any other amount due under this Act shall pay a interest equal to two per cent of the amount of tax or any other amount due remaining unpaid for each month after the expiry of the time specified under subsection (1). Explanation I.--For purposes of clause (ii), the interest payable for a part of a month shall be proportionately determined. Explanation II.--For the purpose of this sub-section non-payment during any period during which recovery of any tax or other amount due under the Act is stayed by an order of any autho....
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....yed payment of tax. The reading of the said section, extracted above, as noticed by me earlier, shows that it only empowers the authorities to collect interest on delayed payment of tax and it does not confer any power on the authorities to collect interest on delayed payment of penalty. In the absence of a specific provision in the CST Act empowering the authorities of the State to collect interest on delayed payment of penalty, in my view, as rightly pointed out by Sri Indra Kumar, it is not permissible for the respondent to collect interest on delayed payment of penalty. The Supreme Court in the case of India Carbon Ltd. [1997] 106 STC 460, while considering the question whether it was permissible for the State to collect interest on del....
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....ions of the State Act are available. The provision relating to interest in the latter part of section 9(2) can be employed by the States' sales tax authorities only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax the States' sales tax authorities cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest thereon." The principle enunciated by the Supreme Court extracted above fully applies to the present case. As noticed by me earlier, in the absence of specific provision providing for levy of inter....