TaxTMI 
TaxTMI 
2024 (5) TMI 1
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....as "2011 Regulations"). 2. The facts, in brief, leading to the filing of the instant writ petition are as under: i. The proceedings were initiated against Petitioner No. 1/Company and Petitioners Nos. 2, 3 and 4, who were directors of the Petitioner No. 1/Company under the Competition Act, 2002 (hereinafter referred to as "2002 Act"). Inquiry was conducted and the Respondent/CCI vide Order dated 30.08.2018 directed the Petitioner No. 1 and their directors and employees identified in the proceedings to cease and desist from indulging into any act of cartelisation in the Dry Cell Batteries market in India. The Respondent/CCI also held that penalties will be imposed on the Petitioners, under Section 27(b) of the 2002 Act. Penalty of Rs. 9,64,06,682/- was imposed on Petitioner No. 1, Rs. 1,29,839 was imposed on Petitioner No. 2, Rs. 1,10,386/- was imposed on Petitioner No. 3 and Rs. 2,40,452 was imposed on Petitioner No. 4. The penalties were to be deposited within a period of 60 days of the receipt of the Order. The said Order dated 30.08.2018 was challenged by the Petitioners by filing Competition appeals being No. 88/2018 etc. before the National Company Law Appellate Tribunal (N....
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....ise through the Recovery Officer after the expiry of the period specified in the Order of penalty expires. He further contends that Regulation 3(2) of the 2011 Regulations provides that demand notice as set out in Form-I appended to the Regulations shall provide a time of 30 days from the date of service of the demand notice to the enterprise concerned to deposit the penalty in the manner specified in the said notice. He states that Regulation 3(3) of the 2011 Regulations provides that upon receipt of demand notice, the enterprise has to pay the penalty through challan as set out in Form-II appended to the Regulations, in favour of Pay & Accounts Officer (PAO), Ministry of Corporate Affairs. He states that unless the said procedure is followed, interest on penalty amount, as specified in Regulation 5 of the 2011 Regulations, cannot be imposed. 5. Learned Senior Counsel for the Petitioners also draws attention of this Court towards the analogous provisions of the Income Tax Act, 1961 regarding levy of interest on delay in payment of penalty. He more particularly draws attention of this Court to Sections 156 and 220 of the Income Tax Act to substantiate his contention. 6. Regarding....
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....eriod commencing from the day immediately after the expiry of the period mentioned in demand notice and ending with the day on which the penalty is paid. She states that penalty imposed by the Respondent/CCI was crystallised and brought to the knowledge of the persons against whom the penalty was ordered to be paid. She, therefore, states that there is no necessity of giving a demand notice first directing the persons against whom the penalty has been imposed. She states that issuance of demand notice is only a Ministerial Order and it can have no effect on the obligation of the persons against whom the penalty is imposed to pay the amount of penalty within the time stipulated and the delay in payment of penalty would automatically attract interest. 10. Learned Counsel for the Respondent/CCI further contends that the analogy drawn by the learned Senior Counsel for the Petitioners between the procedure laid down in the Income Tax Act and the 2011 Regulations is unsustainable for the reason that under the Income Tax Act, when notice of demand is issued, the demand is raised after assessment. She states that in case of income tax, the assessee is initially not aware about the assessm....
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.... of a joint account to all the joint holders of such account at their last addresses known to the Commission. (2) A demand notice issued under sub-regulation (1) shall provide a time of thirty days from the date of service of the demand notice to the enterprise concerned to deposit the penalty in the manner specified in the said notice: Provided that where the Commission has any reason to believe that it will be detrimental if the full period of thirty days aforesaid is allowed, it may direct the enterprise concerned that the sum specified in the demand notice shall be paid within such period being a period less than the period of thirty days aforesaid, as may be specified by the Commission in the demand notice. (3) Upon receipt of demand notice the enterprise shall pay the penalty, through challan as set out in Form II appended to these regulations, in favour of Pay & Accounts Officer (PAO), Ministry of Corporate Affairs, Head No. 1475.00.105.05, Sub-Head-05 - 'Penalties imposed by Competition Commission of India'. (4) One copy of the challan shall be submitted by the enterprise to the recovery officer immediately but not later than seven days of the payment and the recove....
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........................... .................................. Subject: Notice of demand for the recovery of penalty imposed u/s..............of the Competition Act, 2002 (12 of 2003) - regarding. WHEREAS vide order dated ....................... in the matter of ............................................................(case No. ...........) the Competition Commission of India (the Commission) has imposed a penalty of Rs................(Rupees.......................) on............................. (Name of the concerned enterprise) having its office at (address) and having......................... PAN number under section(s)..................... of the Competition Act, 2002 (12 of 2003) (the Act); and WHEREAS a copy of the said order was duly served upon you on (date); and in terms of the above mentioned order, the penalty of Rs. ................(Rupees. ...............) was payable on (date); and WHEREAS you have not paid the said penalty within the time so specified; NOW, therefore, you are required to deposit a sum of Rs................. (Rupees................. ) within thirty days from the date of receipt of this notice through Challan. The payment of penalty shal....
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....imposed, is informed by giving a notice in Form-I appended to the Regulations, interest is not leviable. 15. Regulation 3(2) of the 2011 Regulations provides that a demand notice under sub-regulation (1) shall provide a time of 30 days from the date of service of the demand notice to the enterprise concerned to deposit the penalty in the manner specified in the said notice. The same is reflected in Form-I which stipulates the date within which the amount has to be paid and it further stipulates that in case of failure to deposit the amount of penalty within the time stipulated, interest is chargeable. 16. It is pertinent to mention that the amount of interest which is stipulated in the notice is the amount that is stipulated in Regulation 5 of the 2011 Regulations. Regulation 5 also specifically states that if the amount specified in the demand notice is not paid within the period specified then interest is leviable. It is further fortified that the demand notice also stipulates that the amount has to be paid within 30 days of the receipt of the demand notice under Form-I. These provisions are, therefore, completely mandatory. 17. The Apex Court in Mohan Wahi v. Commissioner, In....
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....R 538 : AIR 1964 SC 1473] and held: (ITR p. 342) "The effect of these provisions is to dispense with the need of issuing a fresh notice of demand and the recovery certificate and to allow the original recovery proceedings to continue, but only for the amount found due after reduction in the appeal, and it is for this purpose that the taxing authority is required to send intimation of the fact of the reduction to the assessee and to the Tax Recovery Officer. As the proceedings for recovery can be continued only for the amount that finally remains due, and not for any amount in excess thereof, the requirement of sending intimation to the Tax Recovery Officer becomes an essential duty of the taxing authority and must be held to be a mandatory condition. Non-compliance of that condition will be an illegality in the procedure and will invalidate the proceedings. A sale held in proceedings initiated and continued for the recovery of an amount in excess of the amount payable by the assessee, after its reduction in appeal, will be invalid. Such a sale is not validated by clause (c) of Section 3 of the Act." The Division Bench decision of the Allahabad High Court in Ram Swarup Gupta cas....
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....ltural Produce Market Committee v. Hindustan Lever Ltd., (2008) 5 SCC 575 has observed as under: "20. So far as the question of payment of interest is concerned, it must be referable to the statute. When the statute controls the levy, the interest payable thereupon, as envisaged thereunder must also govern the field. The general principle of restitution may not apply in this case." 20. The Apex Court in Steel Authority of India Limited v. Commissioner of Central Excise, Raipur (2019) 6 SCC 693 has observed as under: "26. In short, therefore, the principle may be taken to be established that while levy of interest is a part of the adjective law, yet to levy interest there must be substantive provision. Demand for interest can be made only if the legislature has specifically intended collection of interest. We must look at the statutory provisions." 21. The Apex Court in J.K. Synthetics Ltd. v. Commercial Taxes Officer, (1994) 4 SCC 276 has observed as under: "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, t....