TaxTMI 
TaxTMI 
2015 (7) TMI 1367
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...., the petitioner entered into an agreement with the then territorial Assistant Commissioner and out of total eligible sum of Rs. 1725.46 lakhs, the petitioner availed sales tax deferral amounting to Rs. 1376.96 lakhs for the period from 2002-03 to 2007-08 and reserved a sum of Rs. 348.19 lakhs for certain contingencies in order to meet liability that may arise on finalization of assessment. 3. While so, it appears that the respondent passed CST assessment orders for the years 2001-02, 2002-03 and 2003-04 and TNGST assessment orders for the years 2002-03 and 2003-04 and levied differential tax for certain turnovers for the reason that the petitioner did not file Form-C/Form-H and other declarations. According to the petitioner, the differential tax on account of non-submission of declaration forms should also be adjusted against IFST deferral amount for the respective years considering the fact that the petitioner had reserved Rs. 348 lakhs out of the total deferral amount. The grievance of the petitioner is that the respondent proceeded on the basis that the differential amount of tax is not eligible to be adjusted against the IFST deferral amount and issued arrear notice dated 30....
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....d by the dealers and declared in the monthly returns filed by them during the respective years and deferred the payment of taxes which had been actually collected by them for improving their business. The dealers are not eligible for IFST in respect of transactions where the actual collection of all taxes had not taken place. The arrears of taxes demanded by the respondent actually represents the difference of taxes arrived at on account of non filing of prescribed declarations such as Form C and H etc. for which the dealers are not entitled to avail IFST scheme. It is also stated that the penal interest u/s.24(3) of TNGST Act 1959 was levied for the belated payment of taxes since it is automatic and absolute and no notice is necessary. The issue of a demand notice in Form 54 is a nonstandardized form and it is meant only for levying penalties under the Act and not for levy of penal interest under Section 24 (3) of the Act. The word "by way of penalty" was submitted by the word "Penal interest" by Act 22 of 1982 (G.O P 1164 (CT &RE) dt. 15.10.1982 effective from 1.11.1982. Hence the question of issuing Form 54 for the levy of penal interest does not arise. It is also stated that th....
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....een reserved to meet out certain contingencies and the disputed differential tax demand raised by the respondent for non-submission of declaration forms should also be adjusted against the said reserved IFST deferral amount and therefore, without adjusting the said differential tax amount, the respondent has erroneously passed the arrear notice. He further contended that unilateral decision of the respondent directing the petitioner to pay penal interest is contrary to the instructions of the Special Commissioner and Commissioner for Commercial Taxes dated 20.04.2001, wherein, instructions were given to the assessing officers to issue notice, proposing penal interest under Section 24(3) of the TNGST Act and penalty should be imposed only after providing sufficient opportunity to the assessees and therefore, the impugned order is violative of principles of natural justice. 8. The Government of Tamil Nadu introduced IFST Scheme named as "Deferral Scheme" to extend certain tax benefits to the industries which were set up in the backward areas, by which, the assesses/companies to collect sales taxes from the customers and to retain with them for 5 to 9 years and thereafter to make mon....
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....ls to take note of the same, the petitioner can get the benefit of the IFST scheme in respect of transactions where the actual collection of taxes was in fact not taken place. It is to be noted that when the department has noticed and raised demand of differential tax, it is not appropriate on the part of the petitioner to take stand that they are entitled to avail the IFST scheme as they did not exceed the limit and a considerable amount has been reserved, etc., Therefore, I do not find any merit in the claim made by the petitioner. As regards the issuance of notice before resorting to impose penal interest under Section 24(3) of the Act as per the instructions of the Special Commissioner and Commissioner for Commercial Taxes dated 20.04.2001 which insist that penalty should be imposed only after providing sufficient opportunity to the assesses is concerned, this Court finds no considerable force in the said contention. Admittedly, the respondent sent arrear notice on 30.5.2013 and thereafter, by proceedings dated 29.8.2013, the respondent once again requested the petitioner to pay the tax while clarifying the eligibility of the petitioner to avail IFST scheme and only on 28.1.20....
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....the Parent Act, viz., TNGST Act provide for recovery of penalty or interest. Rule 9 of the TNAST Rules states that save as otherwise expressly provided for in TNAST Rules, the provisions of the Tamil Nadu General Sales Tax Rules, 1959 shall apply mutatis mutandis to the additional tax leviable under Section 2 of the Act. With the above statutory provisions relating to the levy of penal interest in the Parent Act as well as in the Saving Clause provided in the TNAST Rules, the Tamil Nadu Special Tribunal in a batch of cases inE.I.D. Parry (India) Ltd., v. Asst. Commr. (CT) (TNTST), reported in 1999 (113) STC 233, considered the following and other issues, (i) The competence of the Assessing Officer in issuing notice/order which levied 24(3) penal interest for belated submission/payment of tax or payment of tax on the basis of revised returns filed before final assessment or confirmation orders passed in Revision. (ii) The validity of the notice/order which levied 24(3) penal interest on additional tax/surcharge tax for belated payment or payment made by filling returns before the completion of final assessment or orders passed in revision justifying such orders. (iii) The point o....