SREEKUMAR Vs. STATE OF KERALA

JUDGEMENT

(1.) THESE two cases were referred to a Full bench as the issue involved in these cases, namely the exigibility to penal interest under s. 23 (3) of the Kerala General Sales Tax Act, has already been referred to a full Bench in M. F. A. No. 4 of 1983 and other connected cases. Accordingly these two cases were heard a1ongwith the other cases. But in these two cases certain other questions also arise for consideration and accordingly they are being dealt with separately.

(2.) IN both these Original Petitions there is a prayer to declare S. 23 (3) of the Kerala General Sales Tax Act as unconstitutional and of no effect and void. IN O. P. No. 9277 of 1983, petitioner is a registered dealer in cashew and an assessee on the file of the 2nd respondent. For the assessment year 1980-81, petitioner had opted for the procedure prescribed under R. 21 of the Kerala General Sales Tax Rules and was accordingly filing monthly returns of his turnover. For the months of May and June, 1980, the assessee claimed exemption from sales-tax on the purchase turnover of cashew nuts under S. 5 (3)of the Central Sales Tax Act, 1956 on the ground that the purchase was one in the course of export as it was the last purchase preceding the export of the goods outside the territory of INdia in compliance with an anterior order in relation to the export. The claim for exemption was rejected by the Sales Tax officer and he passed an order of provisional assessment 1 or the aforesaid two months- Ext. P1 order dated 31-12-1980. Against Ext. P1 order the petitioner filed an appeal and by Ext. P2 order dated 17-11-1981 the Deputy Commissioner (Appeals) held that the period for which provisional assessment was made had already run out and the assessment is ripe for finalisation. Accordingly he directed the Sales Tax Officer to finalise the assessment as early as possible. It was further directed that the contentions put forward by the assessee could also be duly considered at that stage.

(3.) O. P. No. 2361 of 1984 relates to levy of penal interest for the year 1978-79. Ext. P1 dated 14-7-1983 is the final order of assessment by which the total tax due from the petitioner was fixed at Rs. 4,97,490. 18. The assessee had already paid an amount of Rs. 5,42,660/- and thus he had paid an excess amount o! Rs. 45,169. 32. Ext. P1 further states that the excess will be adjusted towards the tax due for the year 1979-80. Ext. P1 order further imposes an amount of Rs. 58,332. 54 as penal interest for that year. Petitioner is challenging Ext. P1 to the extent it imposes penal interest for the aforesaid amount, on the ground that S. 23 (3) of the Act is unconstitutional and that no notice demanding the amount in Form-14 was served on them. It is also contended that by Ext. P1 the final assessment having been made, holding that the petitioner has paid an excess amount of nearly Rs. 45,000/- no penal interest can be levied towards non-payment of the amount due under the provisional assessment.