CALCUTTA JUTE MANUFACTURING CO Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The question raised in all these appeals is whether an assessee is laible to pay interest under S. 10A of the Bengal Finance (Sales Tax) Act 1941, on the turnover tax for the period during which recovery of the tax amount was stopped by orders of the High Court. West Bengal Taxation Tribunal answered the said question against the appellants and hence these appeals by special leave.

(2.) For dealing with the aforesaid question, only necessary facts need be mentioned:A new provision (S. 6B) was included in the Bengal Finance (Sales Tax) Act 1941, (hereinafter referred to as the Act for short) and an identical provision was included in the West Bengal Sales Tax Act 1954 as S. 4AAA. The effect of the new provision was that they imposed a tax on the turnover of a dealer whose annual aggregate gross turnover exceeded Rs. Fifty lakhs. The provisions came into force on 1-4-1979. These appellants were concerned with S. 6B of the Act and hence, they filed writ petitions before the Calcutta High Court challenging the validity of the aforesaid provision. The High Court, on admission of the writ petitions, granted interim relief by injuncting West Bengal Government from collecting such tax on the turnover, but ultimately the writ petitions were dismissed. Thus, liability of the appellants to pay tax on the turnover became conclusive and appellants remitted the tax amount accordingly. But in the meanwhile, Government of West bengal introduced yet another provision as S. 10A in the Act by which interest at the rate of 2% per month was charged on the tax amount payable by the dealer during the period of default. So demands were made on the appellants to pay interest on the tax amount.

(3.) Appellants disputed their liability to pay such interest mainly on two grounds. First is that since appellants have furnished the returns and paid full tax as per such returns they are not liable to pay interest under S. 10A of the Act, Second is, even otherwise they are not liable to pay interest on the tax amount as its non-recovery was the effect of the injunction order granted by the High Court.