TaxTMI 
TaxTMI 
2008 (8) TMI 864
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....ee beans purchased within the State was proposed to be changed from the point of first purchase to the point of last purchase in the State. Along with the Finance Bill a declaration was also issued by the Government under section 4 of the Provisional Collection of Revenue Act, 1985. Consequent upon the declaration published along with the Finance Bill the provisions of the Bill came into force from April 1, 1998. Therefore, by virtue of the change in the incidence of tax from the point of first purchase to the point of last purchase, the petitioners were not liable for payment of sales tax on first purchase of coffee beans within the State. According to the petitioners, turnover of first purchase of coffee was claimed exempt in the monthly ....
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.... regular assessment made for 1998-99, the assessing officer levied interest under section 23(3) of the Act. Even though the first appeals filed against demand of interest were allowed, the Tribunal on second appeals restored the interest demand from the petitioners for belated payment of tax. It is against this order of the Tribunal the petitioners have filed these revision petitions. We have heard counsel appearing for the petitioners and the Government Pleader appearing for the respondents. Counsel appearing for the petitioners, by referring to annexures 2 to 3 produced along with these revisions, contended that Hindustan Lever, being the purchasers of the coffee from the petitioners, have remitted tax at the point of last pu....
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....have gone through the impugned orders and we find that the section under which interest is demanded is wrongly quoted as section 23(3) as against section 23(3A) of the KGST Act. The new sub-section (3A) which was introduced to section 23 of the Act with effect from April 1, 1998 is extracted hereunder for easy reference: "23. (3A) Where any dealer has failed to include any turnover of his business in any return filed or where any turnover has escaped assessment, interest under sub-section (3) shall accrue on the tax due on such turnover with effect from such date on which the tax would have fallen due for payment had the dealer included the same in the return relating to the period to which such turnover relates." It is clear from the....
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.... of tax. So far as the tax actually payable under the Act in this case is concerned, the petitioners admittedly filed returns showing the first purchase turnover of coffee from April to July as exempted turnover by virtue of the provisions of the Finance Bill, 1998. However, when the Finance Act was passed, the returns so filed happened to be wrong because the proposal for shifting of incidence of tax on coffee beans to the last purchase was given up. When the returns happened to be wrong, after the passing of the Finance Act, 1998, it was the duty of the petitioners to file revised returns for all the four months under rule 18(2A) of the KGST Rules. Rule 18(3) provides for payment of interest along with revised returns. In fact rule 18(....
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....ity to remit tax on first purchase is independent of the entitlement for refund by Hindustan Lever Ltd. So long as tax is payable on the first purchase point or the last purchase point, it cannot be collected and it is the absolute liability of the dealer engaged in purchase. Therefore, the petitioners' liability to pay tax is independent of Hindustan Lever Limited's liability for payment of tax and their entitlement for refund. Moreover, default interest payable under section 23(3) and 23(3A) is not only compensatory in nature but is provided in the statute, essentially, to ensure timely recovery of tax. The situation in this case is also clearly covered by statutory provisions. Once a declaration is issued under section 4 of the K....