TaxTMI 
TaxTMI 
TaxTMI 
2014 (6) TMI 519
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.... is necessary to set out facts with relevant legal provisions. The petitioner is a proprietorial concern. It is engaged in the business of manufacture and sale of "Tea". It has a factory located at Barapathar in District Golaghat. The "Tea" is an excisable commodity under the provisions of Central Excise Act. By Finance Act 2003, the Parliament imposed an additional excise duty payable as a surcharge on" Tea and Tea waste" at the rate of "Rs. one per Kg". Section 157 ( 1 ) of the Finance Act provided that there shall be levied and collected for the purpose of the Union , by surcharge, an "additional duty of excise" at the rate specified in the schedule. Sub Section ( 2 ) provided that the additional excise duty payable under sub section ( 1 ) would be in addition to any other duties of excise chargeable on such goods under the Central Excise Act at the rates specified in the Schedule appended to the Act. Sub Section (3) provided that the provisions of Central Excise Act and the Rules made there under including those relating to refunds, exemptions from payment of duties and imposition of penalty, shall as far as may be, apply in relation to collection of additional duty of exci....
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.... The petitioner being aggrieved by this demand, filed the writ petition and questioned its legality and correctness. Notice of this writ petition was served on the respondents. Heard Mr K.N. Choudhury, learned senior counsel assisted by Ms Amrita Borpujari, learned counsel for the petitioner and Mr. D.C. Chakraborty, learned Central Govt. Counsel for the respondents. Shri K.N Choudhury, learned senior counsel while assailing the impugned demand of interest, contended that it was without jurisdiction for want of authority in law. Elaborating his submission, learned counsel contended that liability to pay /recover /demand /levy interest arises only when there is a substantive law made by Parliament/State to that effect. According to him, unless Revenue was able to show the specific authority which empowers them to charge the interest, no interest could be demanded from the assessee for the delayed payment of additional duty of excise. Learned senior counsel pointed out that Finance Act of 2003 only empowered the Revenue to charge additional duty of excise on tea by virtue of Section 157 ( 1 ) and further empowered to recover and if not paid or less paid by taking recourse to the pr....
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....thetics Ltd. supra wherein following general principle of law was laid down. "16. It is well-known that when a statute levies a tax it does so by inserting a charging section by which a liability is created or fixed and then proceeds to provide the machinery to make the liability effective. It, therefore, provides the machinery for the assessment of the liability already fixed by the charging section, and then provides the mode for the recovery and collection or tax, including penal provisions meant to deal with defaulters. Provision is also made for charging interest on delayed payments, etc. Ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must, no doubt, be so construed as would effectuate the object and purpose of the statute and not defeat the same. (See Whitney v. IRC, CIT v. Mahaliram Ramjidas, India United Mills Ltd. v. Commissioner of Excess Profits Ta, Bombay and Gursahai Saigal v. CIT, Punjab). But it must also be realised that provision by which the authority is empowered to levy and collect....
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....uthority therefore, raised a demand for payment of interest at the rate of 24 % per annum under Section 35 -A of the Assam Sales Tax Act 1947(for short called - AST ACT). The assessee felt aggrieved, filed the writ petition in the Gauhati High Court questioning its legality and correctness. There was, however, a difference of opinion between the two learned judges of the Division Bench on the issue arising in the petition and therefore, the matter was referred to the third judge by formulating 4 questions. One of the questions which was referred to the third judge for his decision was - Whether Section 9 ( 2 ) of the CST Act visualize any payment of interest ? The third judge answered the question in affirmative and held that demand raised by the department for interest was justified. It was, accordingly, upheld which resulted in dismissal of assessee's writ petition. The assessee being aggrieved, appealed to the Supreme Court. The Supreme Court applied the principal of law laid down by the Constitution Bench in the case of J.K.Syenthetics (supra). Justice Bharucha (as his Lordship then was and later CJI), speaking for the bench in Para 7 explained the legal position emanating fro....
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....on 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. 14. The requirement of the 1st respondent's sales tax authorities that the appellant should pay interest at the rate of 24% p.a. on delayed payment of Central sales tax under the provisions of Section 35-A of the State Act must, therefore, be held to be bad in law." Coming now to the facts of this case, when we examine the provisions of Finance Act 2003 keeping in view the aforesaid principle of law, then we find that there is no substantive provision contained in the Finance Act 2003 to charge/levy interest on delayed payment of additional excise duty payable under Section 157 ( 1 ) ibid. In our view, the liability to pay additional duty of excise on tea is created for the first time by ....