MAZGAON DOCK LTD Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE controversy in these matters is with regard to levy of interest under Section 9 (2) of the central Sales Tax Act with the aid of Section 13 of the Karnataka Sales Tax Act and connected matters. In India Carbon Ltd. v. State of Assam AIR1997 SC 3054 , jt1997 (7 )SC 4 , 1997 (5 )SCALE51a , (1997 )6 SCC479 , [1997 ]supp3 SCR1 , [1997 ]106 stc460 (SC ) it was held by the apex Court that interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax make a substantive provision in this behalf. This judgment was followed in V. V. S. Sugars v. Government of Andhra Pradesh [1999] 114 STC 47 (SC) and Commissioner, Trade Tax, U. P. , Lucknow v. Ashoka Rice Mills [1999] 112 STC 566 (All. ).

(2.) THERE is no dispute that the liability of interest is a substantive law and unless the statute under which the interest is levied specifically so authorises no interest can be levied. Section 13 (2) of the Karnataka Sales Tax Act, 1957 uses the word levy of penalty for delayed payment of tax. This Court in Sha Ghelabhai Devji and Company v. Assistant Commissioner of Commercial taxes (Assessment) [1986] 62 STC 418 ; (1985) Kar LJ 83 interpreted Section 13 as under :

(3.) THE provisions of Section 13 (2) of the Karnataka Sales Tax Act are as under :