TaxTMI 
TaxTMI 
2018 (8) TMI 600
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.... saving medicines and exportation thereof. For the convenience, the fact of the Assessment Year 1974-75 are being taken while deciding all the revision petitions. The matter pertains to the imposition/liability of interest under Section 8(1) of the U.P. Sales Tax Act, 1948 (hereinafter referred to as the 'Act'). According to the learned counsel for the revisionist, for the Assessment Year 1975-76, 76-77, 77-78, the assessment was made by the assessing authority in the year 1979. The returns were filed by the revisionist without admitting any tax liability and in fact the revisionist disputed the applicability of the provisions of U.P. Sales Tax Act, 1948 on the following grounds namely; (i) Revisionist is not a dealer, (ii) Revisionist is not liable to tax in view of Article 285 of the Constitution of India, and (iii) The procurement of Opium and sales and manufactured product are not liable to tax. The assessing authority of the revisionist however has passed the assessment orders by which he has accepted the books of accounts by treating the revisionist as a manufacturer and by observing that the revisionist is a dealer, hence is liable to tax on purchase of Opi....
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.... The writ petition aforesaid was decided by the division bench of this Court vide judgment dated 21.1.2000 holding as under : "(a) the validity of the provisions have already been upheld; (b) the applicant is a dealer under the Act, the procurement of Opium from cultivator is transaction of purchase (page 47 of the supplementary affidavit); (c) the sale or purchase transaction by the applicant is not exempted under Article 285 of the Constitution of India (page 55 of the supplementary affidavit); (d) the question of interest would be decided was left open to be decided by the assessing authority in the application under Section 22 of the Act already filed by the applicant; and (e) the assessment has become final. (Copy of the order passed by the division bench is already part of record as Annexure SA-1 to the supplementary affidavit." After the decision by this Court, the matter went to the Tribunal against the rejection of the application of the revisionist and the Tribunal has rejected the appeals of the revisionist vide impugned order dated 21.6.2006. Learned counsel for the revisionist has submitted that though the Writ Petition No. 167 of 1989 was filed before this....
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....chase of goods and it is not levied directly on the goods but on the sale and purchase thereof. Therefore, in our view, the claim of immunity from purchase tax under the provisions contained in Article 285 of the Constitution is not available to the petitioner. On the question of demand of interest under Section 8 (1) of Act No.XV of 1948 in pursuant to the demand letter dated 28.2.1981, admittedly, the petitioner has filed an objection vide letter dated 6.4.1981 which seems to have not been disposed of till date. Sri Upadhyaya, learned counsel for the petitioner, however, urged that the liability of purchase tax was for the first time enforced by introducing Section 3-AAA in the year 1978 giving retrospective effect from 1.4.1974 and, thus, the petitioner cannot be saddled with the liability of interest under Section 8(1) of Act XV of 1948, because the tax was not admitted by the petitioner to be payable. He placed reliance, inter alia, on a Division Bench judgment of this Court in the case of M/s. Annapurna Biscuits Company Vs. State of U.P. & Others (supra). In our opinion, since the objection of the petitioner with regard to interest under Section 8 (1) of Act XV of 1948 ....
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....er or not and, therefore, the tax liability on the ground of freight charges could not be treated to be an admitted tax and, therefore, the interest could not be levied under Section 8(1) of the Act. The division bench has also considered the decision in Commissioner of Sales Tax Vs. Hindustan Aluminium Corporation, 2002 (127) STC 258, the Supreme Court on a plain interpretation of provisions of Section 8(1) of the Act held that the assessee was required to deposit tax that was admittedly payable by it. The Supreme Court held that the words 'tax admittedly payable' means the tax payable under the Act on the assessees turnover as disclosed in its accounts or admitted by it in its return or other proceedings under the Act. While deciding the issue in Bharti Airtel Ltd. (Supra) the division bench of this Court held as follows : "we find that even though the vires of the Act of 2007 had been upheld, the petitioner nonetheless disputed the liability of payment of tax under 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 d....
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....e tax assessed on the applicant as admitted turnover and levied interest on the tax assessed. The question of levy of interest has not been discussed in the order of the Tribunal. In the memo of revision it has been stated that the said question was argued before the Tribunal, but the Tribunal has omitted to consider the same. Since the imposition of levy of interest does not require any investigation of fact and is basically question of law, the Counsel was permitted to urge the said point in support of the revision. The assessment order in the Assessment Year 1986-87 is dated 24.04.1992 and for the Assessment Year 1985-86 it is dated 11.3.1992. This court in the case of M/s Pioneer Tannery Glue Works vs. State of U.P. and others , 1991 UPTC 585 had declared Section 3-AAAA of the Act as ultra vires. This decision was subsequently reversed by Supreme Court in the case of Hotel Balaji (supra) on 22.10.1992. Thus the day on which assessment orders were framed Section 3-AAAA was not on the Statute book. 10. It may also be noted here that in order to get over the decision and to remove the defects as stated in M/s Pioneer Tannery & Glue Works , the Governor of Uttar Pradesh by issuin....
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....ourt in the case of Pioneer Tanneries and Glue Works (supra). Section 3-AAAA shall be deemed to be the Statute in the assessment year in question and the liability to tax was there. But the applicant had neither admitted the turnover in the return nor had admitted any tax liability thereon. Moreover there was a bona fide dispute raised by the applicant regarding liability for tax thereon. Thus, it cannot be said to be its admitted turnover and, therefore, there is no liability for payment of interest under Section 8(1) of the Act. This Court in the case of R.P. Chemical Works vs. Commissioner of Sales Tax, reported in 1986 U.P.T.C. 157 had held that where a dealer does not admit any liability for payment of tax on a particular turnover and tax is imposed under Section 3-AAAA of the Act, the turnover and the tax liability does not admitted liability under Section 8(1) of the Act. The Hon'ble Supreme Court in the case of the Commissioner of Sales Tax vs. Hindalco Industries Ltd., reported in 1999 U.P.C. Had held that no interest can be charged on a turnover which has not been admitted by a dealer. Respectfully following the aforesaid decision it is held that the applicant is not ....
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....orders the assessing authority has not indicated any liability of payment of interest. Per contra, Sri B.K. Pandey, learned standing counsel has submitted that though the State of U.P. enacted Section 3-AAAA on 17.4.1979 by amendment by U.P. Act 12 of 1979 but it was w.e.f. 1.4.1974 whereby for the first time purchase tax was imposed on purchase of goods, therefore, the provisions of Section 3-AAAA had been considered by the Division Bench of this Court in writ petition filed by the petitioner company (Revisionist) being Writ Petition No. 167 of 1989 decided/dismissed on 21.1.2000. He has submitted that the division bench in the aforesaid writ petition has observed that in view of the provisions of Section 3-AAAA the petitioner filed its return for the assessment year 1974-75 to 1978-79 on the basis of which the assessments were made and the assessed amount of purchase tax was deposited. He has therefore, submitted that the department was correct in raising the demand of interest under Section 8(1) of the Act on the assessed amount at the rate of 24% per annum treating the said liability as an admitted tax liability for the aforesaid assessment years though admitted but was not de....
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....Centre (Supra), the question of mala fide does not arise and likewise in our considered opinion, there is no scope for applying the principles of legitimate expectation or hope or bona fide for avoiding the liability of payment of interest under Section 8(1) of the Act. The controversy stands covered by a decision of the Division Bench of this Court in the case of M/S. Annapurna Biscuit Co. (Supra) with which we are in respectful agreement with the view taken by it in so far as the levy of interest on account of non-furnishing of a declaration form is concerned." Having heard learned counsel for the parties and after going through the judgments, which are relied by the respective parties, I find substance in the submissions of the learned counsel for the revisionist. Admittedly the revisionist is a Union of India undertaking and it deals in procurement, distribution as well as export of Opium its derivatives and life savings medicines and exportation thereof. The issue involved in this case is confined to the imposition of the interest under Section 8(1) of the Act. The admitted fact that the assessing authority has passed the assessment orders for all the assessment year in ques....
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....at since the revisionist disputed the liability of tax, therefore, a writ petition was filed long back in the year 1989 which was pending for more than 11 years and was ultimately decided only on 21.1.2000 and the division bench though has dismissed the writ petition but on the other hand the regular proceedings were completed which were pending before the Tribunal and the same are decided only vide order of the tribunal dated 21.6.2006. Learned counsel for the revisionist has submitted that in fact the writ petition was filed for the refund of the amount of purchase tax which was paid by the revisionist under protest however, since the writ petition was pending for about 11 years and the High Court while dismissing the writ petition has considered the submissions of the revisionist. In fact the revisionist has filed an objection vide letter dated 6.4.1981 which seems to have not been disposed of till date. From the bare perusal of the observations by the division bench of this Court, it is crystal clear that even the division bench has found substance in the claim of the revisionist as such has clearly observed that it is open to the petitioner (revisionist) that he may agitate ....