AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 1386
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....acture of cement and allied products. They are registered as dealers under the TNGST Act and the CST Act. 4. The appellant availed the benefit of a scheme known as "Interest Free Sales Tax Deferral Scheme" for a period of nine years, upto a ceiling of Rs. 420.62 lakhs, granted on the basis of an Eligibility Certificate issued by SIPCOT Limited. The appellant entered into an agreement with the Assistant Commissioner (Commercial Taxes), as per which the sales tax payable during the period from 01.07.1999 upto 30.06.2008 would stand deferred. The repayment was to commence only from 01.07.2008 and run upto 30.06.2017. 5. Though the period for which the appellant was entitled to defer payment was upto 2008, the appellant exhausted the entire ceiling limit even before October, 2004. As a consequence, the appellant ought to have commenced repayments, but they violated the terms and conditions of the scheme and the agreement. 6. Due to the breach committed by the appellant, the Assistant Commissioner(CT) issued a show cause notice, dated 31.08.2005, proposing to cancel the deferral agreement. After the appellant submitted a reply, an order was passed on 22.09.2005, cancelling the agreem....
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....tter remanded back to the Assessing Officer. But, applications relating to the assessment years 2005-2006 and 2006-2007 were rejected. 15. During the pendency of all the applications before the Special Committee under Section 16-D, the Government of Tamil Nadu Passed an enactment known as "The Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011" (T.N.Act 29/2011). The intention of the Act was to provide for settlement of arrears of tax, penalty or interest pertaining to sales tax. 16. Therefore, instead of pursuing the matter before the Assessing Officer on the basis of the orders of remand passed by the Special Committee, the appellant chose to file applications in Form-I under Section 5(1) of T.N.Act 29/2011. Along with the applications, the appellant remitted 40% of the admitted and disputed tax together with interest at 7.5%, in terms of Section 7(a) of T.N.Act 29/2011. 17. Pointing out that the appellant ought to have paid 100% of the tax as admitted in their returns, for a consideration of their applications under the Samadhan Scheme, the Joint Commissioner, Commercial Tax, passed six independent orders in relation to CST Act for the assessment years 1999-2000, 2000-200....
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....y the applicant and to be waived shall be determined as follows:-- (a) Where it relates to arrears of tax which was assessed on the best of judgment due to non-production of accounts with corresponding arrears of penalty and interest, the applicant shall pay forty per cent of arrears of tax pending collection on the date of application along with interest calculated at seven and a half per cent per annum thereon and on such payment of tax, the balance of tax and interest and the entire penalty shall be waived. (b) Where it relates to arrears of tax, including any arrears of the accrued due to non-filing of declaration forms which was in excess of the tax admitted as per the returns filed for the year with the corresponding arrears of penalty and interest, the applicant shall pay forty per cent of such arrears of tax pending collection on the date of application along with interest at seven and a half per cent per annum thereon and on such payment of tax, the balance tax and interest and the entire penalty shall be waived. (c) Where it relates to arrears of tax, which was admitted as tax due as per returns filed for the year with corresponding arrears of penalty and interest t....
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....appellant, who collected the tax from its customers did not pay the tax, even after they crossed the ceiling limit in October, 2004. In other words, the tax payable even as per the returns filed were not remitted by the appellant. To put it differently, the tax admittedly due even as per the returns filed by the appellant were not paid, despite the same having been collected from the customers. 26. Insofar as the assessment orders for the period from 2003-2004 to 2006-2007 under the TNGST Act are concerned, the appellant failed to produce the Books of Accounts. Therefore, the Assessing Officer passed orders terming them as best of judgment assessments. But, what the Assessing Officer really did was just to add 25% to the total and taxable turnover for the non-production of records. These best of judgment assessment orders were not really a set of orders where some total and taxable turnover that escaped assessment were found out and regulated. Since no books of accounts were produced under TNGST Act, the Assessing officer arbitrarily added 25% to the reported total and taxable turnover and passed four assessment orders, dated 20.10.2010, 20.10.2010, 11.11.2010 and 11.11.2010 under....
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....counsel for the appellant is that when admittedly the liability fastened upon the appellant arose out of best of judgment assessment orders, the case would be covered only by Section 7(a) and not Section 7(c) of T.N.Act 29/2011. 31. We have already extracted Section 7 of T.N.Act 29/2011 in entirety. We have also provided in a tabulation, the four different situations covered by Section 7. 32. A careful look at Section 7 would indicate that the four clauses contained therein are not mutually exclusive of each other. The clauses contained in Section 7 are not intended to put a premium on dishonesty. The consequence that will flow if the contention of the learned counsel for the appellant is accepted, can be seen by taking a hypothetical example. 33. Let us take for instance a case where a honest tax payer files a return admitting a particular amount of total and taxable turnover and admitting his liability to pay tax to the extent of Rs. 100/-. If, for some reason. he fails to pay the admitted tax and proceedings for recovery are initiated, he will be liable, even according to the learned counsel for the appellant, to pay 100% of the admitted tax, in terms of Section 7(c) of T.N.A....
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....t Free Sales Tax Deferral Scheme. Therefore, such a person cannot claim the benefit of retention of 60% of what they have already collected from customers under the Scheme. Hence the first contention of the learned counsel for the appellant is rejected. 37. The next contention of the learned counsel for the appellant is that Section 7(c) has to be read with Section 4. Section 4, which speaks about eligibility for settlement, imposes three conditions. they are: (i)that the arrears of tax should pertain to the assessment orders upto 2006-2007; (ii)that the assessments relating to these years should have been made prior to 01.08.2011; and (iii) that no appeal or revision was pending on the date of filing of the application. 38. The contention of the petitioner is that in the case on hand, best of judgment assessment had been made prior to 01.08.2011 and hence Section 7(c) was squarely attracted. 39. But, we do not think that the above contention is correct. As we have indicated in the first part of this judgment dealing with the narratives, the orders of assessment were passed during the period 2001 to 2010. Therefore, it is true that the second condition stipulated under Sectio....
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..... Section 7 of the 2008 Act also provided for four different situations as in the present case. But it spoke only about arrears of tax or arrears of penalty or interest or both. 45. The next Scheme was under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010 Even here, the focus was on settlement of arrears of tax. Then came the 2011 Act whose scope and ambit we have already discussed. 46. Based upon the various Samadhan Schemes that were introduced right from the year 2002 upto 2011, it was contended by Mrs.R.Hema Latha, learned counsel for the appellant, that if the focus of the Scheme was on the settlement of disputes, the respondents can demand payment of the admitted tax and allow waiver of a part of the disputed tax. If the focus of the Scheme is for the settlement of arrears, the distinction between admitted tax and disputed tax would disappear, as everything would fall under the category of arrears of tax. 47. In support of the above contention, Mrs.R.Hema Latha, learned counsel for the appellant, also drew our attention to the distinction between Section 7(b) of the 2008 Act and Section 7(b) of the 2011 Act. In Section 7(b) of 2008 Act, cases relating to arrears....
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....sel for the appellant, is contrary to the decision of a Division Bench of this Court in E.D.I.Parry (India) Limited vs. Assistant Commissioner (CT) and others - 126 STC 449 Mad. 53. But, we do not know how reliance is placed upon the decision in EID Parry (India) Limited. That was a case where the assessee filed supplementary returns. The supplementary returns covered freight charges and transport subsidy. Along with the supplementary returns, the assessee remitted an additional tax, but under protest. Thereafter, assessments came to be made. Therefore, the question arose as to whether the filing of supplementary returns, subsequent to the filing of a return under Section 13(2) with a demur that the amount is being paid under protest, can be regarded as a return under Section 13(2) for the purpose of levy of interest under Section 24(3). 54. While answering this question in favour of the assessee, the Division Bench of this Court pointed out that if the stand taken by the assessee about the need to file a supplementary return was bonafide and not as a mere ruse to avoid payment of interest, then the department cannot claim interest under Section 24(3). Therefore, the above decisi....