TaxTMI 
TaxTMI 
2007 (12) TMI 414
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....ately remitted the same on April 17, 2003, while filing monthly returns for the abovesaid assessment year. The petitioner has submitted that they remitted the additional sales tax vide cheque dated April 17, 2003, besides remitting sales tax under section 7C of the TNGST Act. However, the respondent has issued the impugned notice dated April 21, 2004, levying penalty under section 24(3) of the TNGST Act. According to the petitioner, section 24(3) of the TNGST Act authorises levy of penal interest for the belated payment of TNGST only and not for the alleged belated payment of additional sales tax for the simple reason that there is no substantial provision in the Tamil Nadu Additional Sales Tax Act, 1970 (in short "the TNAST Act") for levy of penal interest. According to the petitioner, section 3B of the TNAST Act is only a charging section for levy and collection of penalty and it does not provide for levy of penal interest for any belated payment of additional sales tax. The petitioner has further submitted that Explanation V to section 2(1)(aa) of the TNAST Act was inserted by Act 23 of 2002-Gazette, dated June 3, 2002, with effect from July 1, 2002, which reads as follows: "....
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.... of the TNGST Act prescribes that on any amount remaining unpaid after the date specified for its payment as referred to in sub-section (1), the dealer or the person shall pay in addition to the amount due, interest at one-and-a-half per cent per month of such amount for the first three months of default and two per cent per month of such amount for the subsequent period of default. In view of the provision, rule 9 of the Tamil Nadu Additional Sales Tax Rules, 1970 (in short, "the TNAST Rules") penal interest has been levied on the admitted belated payment of additional sales tax. The respondent has further submitted that the levy of penal interest is automatic and there is no provision under section 24(3) of the TNGST Act that the levy of interest should be imposed only after issuing show-cause notice, as similar to the provisions contemplated in sections 12(3), 16(2), etc., and therefore, the contention of the petitioner that prior notice should be given, is not tenable. As the delay in payment of sales tax has been admitted by the petitioner, penal interest can be levied for the belated payment of additional sales tax, as per rule 9 of the TNAST Rules. The respondent has furth....
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....e said amendment has been given retrospective effect from April 1, 1970, when the TNAST Act, 1970 came into effect and therefore, the action of the respondent in demanding penal interest on the belated payment is well within the jurisdiction of the respondent. As regards the decision in India Carbon's case [1997] 106 STC 460, he submitted that the above judgment rendered in Central Sales Tax Act, 1956 has no relevance to the case on hand, as there are sufficient provisions both in the TNAST Act and the Rules framed thereunder and in view of the amendment, any action taken by any authority or officer or person in connection with the penal interest, is valid in law. On the question of issuing notice, learned Additional Government Pleader submitted that as the levy of penal interest on any amount remaining unpaid is automatic, there is no question of issuing notice to the assessee before levying penal interest and no such procedure is contemplated under section 24(3) of the TNGST Act, 1959. Heard Mr. Ravindaran, learned counsel for the petitioner and Mr. S. Mahadevan, learned Additional Government Pleader for the respondents. The Tamil Nadu Additional Sales Tax Act, 1970, has c....
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....." Sections 25 to 27 of the Parent Act, viz., TNGST Act provide for recovery of penalty or interest. Rule 9 of the TNAST Rules states that save as otherwise expressly provided for in TNAST Rules, the provisions of the Tamil Nadu General Sales Tax Rules, 1959 shall apply mutatis mutandis to the additional tax leviable under section 2 of the Act. With the above statutory provisions relating to the levy of penal interest in the Parent Act as well as in the Saving Clause provided in the TNAST Rules, the Tamil Nadu Taxation Special Tribunal in a batch of cases in E.I.D. Parry (India) Ltd. v. Assistant Commissioner (CT), CAC, Chennai reported in [1999] 113 STC 233 considered the following and other issues, (i) The competence of the assessing officer in issuing notice/order which levied under section 24(3) penal interest for belated submission/ ayment of tax or payment of tax on the basis of revised returns filed before final assessment or confirmation orders passed in revision. (ii) The validity of the notice/order which levied under section 24(3) penal interest on additional tax/surcharge tax for belated payment or payment made by filing returns before the completion of final ....
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....les Tax Act and Surcharge Act are State Acts and the levy of penal interest with reference to principal Act and Rules adopted in these State Acts and Rules is in order. Section 3B of the Additional Sales Tax Act inserted by Act 31 of 1996 relates to provisions of offences and penalties of the Tamil Nadu General Sales Tax Act and not penal interest and therefore the plea that penal interest has been provided by Act 31 of 1996 with effect from April 16, 1997 is rejected. . . . 57.. In O.P. No. 3685 of 1997, the revisional authority in his order dated August 20, 1997 has clearly stated that the petitioner paid tax, surcharge and additional tax belatedly. Already we have held that the provisions of the Additional Sales Tax Act and Surcharge Act and Rules made thereunder are adequate to levy penal interest. Thus, when no tax was paid on turnover not eligible for deferral of tax with reference to monthly returns filed, the levy of penal interest by the assessing authority is in order and accordingly the petition is dismissed. . . . 62.. In O.P. No. 1269 of 1998, before final assessment taxes due for the months of September 1994, November, 1994 to January, 1995 have been paid. Thus, t....
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....validate the action already taken for the collection of interest on the delayed payment of additional sales tax and penalty, the Government have decided to make specific provisions in TNAST Act with retrospective effect, by amending the said Act suitably. Subsequently, by introduction of Act 14 of 2005, section 2 of the Tamil Nadu Additional Sales Tax Act, 1970, was amended and after clause 2(1)(aa), following clause shall be inserted: "(aaa) On any amount of additional tax or penalty imposed by the assessing authority remaining unpaid under this Act, the dealer referred to in clause (aa) shall pay interest as specified in sub-section (3) of section 24 of the said Act, in addition to such amount of additional tax or penalty due." In so far action taken by the authority, officer or persons in connection with the payment of such interest for delayed payment of additional tax or penalty, section 3 has been introduced with effect from 1st day of April 1970. The said section is extracted hereunder: "Notwithstanding anything contained in the principal Act or in any judgment, decree or order of any court, Tribunal or other authority, any interest paid or payable for delayed payment of....