TaxTMI 
TaxTMI 
2017 (3) TMI 486
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....r Section 4-BB to the extent of Rs. 42,26,036/- only as against the amount claimed of Rs. 57,76,673.57/-. Since turnover was accepted, the Tribunal treated the shortfall in tax to be admitted, and thereby required payment of interest under Section 8 (1) of the Act. The assessee felt aggrieved and preferred an appeal. The appeal was partly allowed in so far as payment of interest is concerned, on the premise that there was a bonafide dispute with regard to liability to pay tax, and the assessment order was passed after nearly 3 ½ years. The benefit of set-off to the extent of Rs. 42,26,036/- was affirmed but interest was held to be payable under Section 8(1-B). The department preferred a second appeal under Section 10 before the Tribunal, which has been allowed and liability to pay interest in terms of Section 8(1) of the Act, has been restored. Aggrieved by such determination, the assessee has preferred the present revision. 3. Sri R.R. Agrawal, learned Senior Counsel assisted by Sri R.R. Kapoor submitted on behalf of the assessee that there was a bonafide dispute with regard to amount admissible towards set off, under Section 4-BB of the Act, and deficient amount of tax co....
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....or admitted by him in any return or proceeding under this Act, whichever is greater, or, if no accounts are maintained, then accordance to the estimate of the dealer [and includes the amount payable (under Section 3-B or Sub-section (6) of Section 4-B]. [(1-B) If the tax (other than the tax admittedly payable to which sub-section (1) applies) assessed, reassessed or enhanced by any authority or Court remains unpaid for three months after the expiration of the period specified in the notice of assessment and demand, simple interest at the rate of one and half per cent per mensem on the unpaid amount calculated from the date of such expiration shall become due and be payable: Provided that the amount of interest under this sub-section shall be recalculated if the amount of tax is varied on appeal or revision or by any order of a competent Court or authority." 6. Section 8 deals with payment and recovery of tax. The tax admittedly payable is required to be deposited within the time prescribed, failing which simple interest becomes payable at the rate of Rs. 2% per mensum on the unpaid amount, with effect from the last date prescribed for deposit of such amount. The term "tax admi....
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.... 7 per cent. The demand of interest was not justified." 4. We are unable to see any relevance of the mala fides in this case. Section 8(1) does not say that the non-payment should be mala fide. This is also not a case where the rate of tax applicable was in dispute or disputed by the dealer. This is simply a case where the dealer calculated the tax at an inapplicable rate. He did not and could not plead ignorance of the change in rate of tax effected two years earlier. In the circumstances, the concept of mala fides was not relevant in the context." 7. However, in cases other than where tax is payable under sub-Section 1, the liability to pay interest at the rate of ½ per mensem, would arise from the notice of assessment and demand. The question that falls for consideration, in this case, is as to whether the shortfall in payment of tax fell within the category of admitted tax, so as to incur liability of interest under Section 8(1), or from the assessment notice under sub-Section (1-B)? 8. The revisionist herein claimed set-off under Section 4-BB to the extent of Rs. 57,76,673.57/-. The department however, allowed partial set-off to the extent of Rs. 42,26,036/- only. T....
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....hat turnover and rate of tax were not disputed, and amounted to 'tax admitted'. 10. Learned Senior Counsel for the revisionist has relied upon the decision of Apex Court in E.I.D. Parry (India) Ltd. (Supra). The Court was dealing with the provisions of the Tamil Nadu General Sales Tax Act, wherein liability to pay interest arose from the notice of assessment. The provision of the nature herein did not fall for consideration in that case. Paragraph 12 of the judgement classifies this aspect in following words:- "Under Section 24(1) if the tax has been assessed or has become payable under the Act, then the payment has to be made within the said time as may be specified in the notice of assessment and tax under Section 13(2) has to be paid without any notice of demand. However, as seen above, the tax under Section 13(2), in the absence of any determination by the Assessing Authority, is tax as per the returns. If default is made in payment of such tax then interest becomes payable under the Act. In the present case, it is an admitted position that tax as per the monthly return had been paid within time. It is also an admitted position that there was no assessment, even prov....
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....r the Act of 2007 on the ground that the petitioner was importing "electrical equipments" and that the petitioner was not liable to pay any tax as it was not a "machinery". This fact, that the petitioner has disputed its liability under the Act is not disputed by the respondents. The fixation of the liability under the Act of 2007 in the assessment orders are being contested by the petitioner in the appeal. We are consequently of the opinion that since the petitioner has disputed its liability from the very inception, the same cannot be treated to be the admitted tax for the purpose of Section 8 (1) of the Act read with Section 33(2) of the U.P.VAT Act. Thus, for the purpose of imposition of interest, the provisions of Section 8 (1B) of the U.P.Act read with Section 33(4) of the U.P. VAT Act would be applicable for the purpose of determining the interest liability." 13. In Indian Oil Corporation (Supra) also, the assessee had disputed the liability of tax, and at no point of time liability of tax was admitted in terms of Section 8 (1) explanation. The matter was carried in revision before this Court, and therefore in such circumstances, this Court proceeded to hold that Section 8(....
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....ng material, to the extent of tax paid on purchases of raw material/packing material from which the end product itself was manufactured/packed. This is clear from sub-Section (a) of Section 4-BB. In the absence of any challenge laid in this revision, the issue of correctness of allowing partial set-off otherwise need not be gone into. No bonafide dispute otherwise surfaces on record. The intent of Section 8(1) read with explanation is clear, that once the assessee is found to have admitted its turnover, in the books of account, and rate of tax is not in issue, the total tax payable becomes the admitted tax. Any set off claimed by the assessee, if is disallowed and is accepted by the assessee, would not form a valid basis for assessee to contend that the amount of tax payable was not admitted. 16. The observation of the Apex Court in Commissioner of Sales Tax Vs. Hindustan Aluminum Corporation, 1999 U.P.T.C. 1, in paragraph 4 is apposite and is reproduced:- "4. What is required is a plain interpretation of the provisions of Section 8. Sub-Section (1) thereof requires the assessee to deposit within the time prescribed or by 1st August, 1975 whichever is later, the tax that is admi....