P K DAMODARAN Vs. STATE OF KERALA

JUDGEMENT

(1.) THE assessee is the revision-petitioner. THE State is the respondent. THE assessment year concerned is 1998-99. THE only question that arises for consideration in this case is as to whether penal interest under section 23 (3)/23 (3a) of the Kerala General Sales Tax Act, 1963 for short "the Act", can be levied in a case where the assessee did not disclose the correct rate of tax in the return and had paid tax showing a lesser rate in the return.

(2.) THE assessee is a dealer in cattle feeds. For the assessment year 1998-99, the assessee filed returns disclosing the rate of tax on cattle feeds only at the rate of 3 percent, whereas, the rate of tax for cattle feeds was fixed at 4 per cent, with effect from April 1, 1998, as per the Finance Act, 1998. THE assessing authority did not object to the same until the final assessment for the year 1998-99 is completed as per order dated April 3, 2001. In the assessment order, the assessing authority has levied interest of Rs. 9,926. Being aggrieved by the said levy, the assessee filed an appeal before the Appellate Assistant Commissioner, Commercial Taxes, Kannur, who by his order dated November 13, 2001 (annexure-B), allowed the appeal in that respect. However, in appeal filed by the State, the order of the first appellate authority was set aside and the order of assessing authority levying penal interest was restored.

(3.) IN the above extracted minority view, it was specifically observed that what is relevant is the tax due according to the return actually filed, that is payable under sub-section (2) of section 7 which was involved in that case, and observations extracted above clearly applies to the present case also.