ABDULLA Vs. STO

JUDGEMENT

(1.) IDENTICAL question of law arises for consideration in both the cases. The interpretation of S.23(3) of the Kerala General Sales Tax Act. 1963 (in short. the act) arises for consideration. A Bench of this Court referred O.P.No. 3501 of 1986 to a Full Bench. noticing that there is a conflict between the Division Bench decision in Haridas v. Asst. Commissioner of Sales Tax (44 STC 26 =1979 KLT 212) and the decision of a Division Bench in Joy Varghese v. State of Kerala (62 STC 227). That is how O.P.No. 3501 of 1986 is coming up before the Full Bench. Writ Appeal 16 of 1988 is preferred against a judgment of a learned single judge of this Court rendered in O.P.No. 10425 of 1984. dated 24th August 1987. The O.P. was dismissed with certain directions. The challenge in the said O.P. was against Ext. P1 order of the Sales Tax Officer. Trivandrum. dated 12 -3 -1984. levying penal interest in the sum of Rs. 47.959.91. which was affirmed in Ext. P4 revisional order by the Deputy Commissioner of Sales Tax (South Zone). Quilon. dated 6 -6 -1984. Penal interest was levied for non -payment of collected tax. For July and September 1980 the collected tax of Rs.23645.89 was not paid till 19 -1 -1984. Similarly the collected tax of Rs. 42.272/ - for the months of December 1980 and January and February 1981 was not paid till 19 -1 -1984. In the circumstances. penal v interest was worked but as per S.23(3) of the Act in the sum of Rs. 47.959.91. The levy of penal interest was taken up in revision. The Deputy Commissioner of Sales Tax by order dated 6 -6 -1984. affirmed the levy of penal interest aforesaid. The challenge against Exts. P1 and P4 did not succeed before the learned Single Judge. who by judgment dated 24 -8 -1987 dismissed the O.P. with some directions. Aggrieved by the said decision the petitioner in the O.P. filed the writ appeal. No. 16 of 1988. A Bench of this Court. by order dated 11 -2 -1988. referred the matter to a Full Bench for consideration in view of the general importance of the question. In O.P.No. 3501 of 1986 the attack is against levy of penal interest under S.23(3) of the Act for the assessments made on the assessee -petitioner in the O.P. - under the Central Sales Tax Act for the assessment years 1982 -83.1983 -84 and 1984 -85. For the years 1982 -83 by Ext. P1. dated 13 -9 -1984. the petitioner was directed to remit a penal interest of Rs. 27.800.68 for non -payment of collected tax of Rs. 85.754.64. Similarly. by Ext. P4 dated 4 -1 -1986. for the year 1983 -84 penal interest was levied in the sum of Rs. 23.380.80 for non -payment of collected central sales tax of Rs. 60.488.75 for the period from 1 -5 -1984 to 31 -12 -1985. So also by Ext. P6 dated 4 -1 -1986. for the year 1984 -85 the assessee -petitioner was directed to pay penal interest of Rs. 4.638/ -for non -payment of collected Central Sales Tax for the period from 1 -5 -1985 to 31 -12 -1985. collected tax being Rs. 35.675.64. A learned Single Judge of this Court referred the matter to a Division Bench. by order dated 21 -10 -1986. Later. a Division Bench of this Court. by order dated 26 -3 -1987 referred the matter to a Full Bench for consideration. That is how O.P.No. 3501 of 1986 has come up before the Full Bench.

(2.) IN both the cases the penal interest levied under S.23(3) of the Act is attacked as illegal and without jurisdiction. The ground of attack is the same in both the cases. The plea is that service of a notice of demand in form No. 24 is an essential prerequisite for the levy of penal interest under S.23(3) of the Act. The above plea is sought to be substantiated by the Bench decision of this Court in Joy Varghese case (62 STC 227).

(3.) WE heard counsel The short question that is posed for consideration in both the cases is whether service of a notice of demand is essential for the levy and collection of penal interest specified in S.23(3) of the Act. According to the Revenue. the service of a notice of demand. as stated by the petitioners. is unnecessary to fasten liability on the assessees for payment of penal interest under S.23(3) of the Act. Both sides placed before us a few decisions in support of their respective pleas.