ENGLISH INDIAN CLAYS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner is an assessee to sales tax both under the Kerala General Sales Tax Act and under the Central Sales Tax Act. The question involved in this Writ Petition is as to whether penal interest under S.23(3) of the KGST Act can be imposed in respect of delayed payment of Central Sales Tax due under the said Act. According to the petitioner, S.9(2) of the CST Act did not provide for levy of penal interest provided under S.23(3) of the KGST Act for delayed payment of Central Sales Tax. Whereas according to the respondents, by virtue of the provision of S.9(2) of the CST Act, all the provisions of the KGST Act in regard to assessment and recovery of penal interest, etc. will automatically apply.

(2.) In this case, the petitioner has challenged Exts.P2, P4 and P5 assessment proceedings under the CST Act to the extent of the interest levied therein by invoking the provision of S.23(3) of the KGST Act. The petitioner has also sought for a declaration that S.9(2), 9(2A) and 9(2B) of the CST Act and the Validation Clause enacted by the Union Finance Act, 2000 as unconstitutional and invalid. There is a further prayer for a declaration that the Validation Clause introduced by the Union Finance Act, 2000 is valid only prospectively.

(3.) A counter affidavit is filed by the 3rd respondent. It is stated therein that revenue recovery notice was issued by the District Collector, Trivandrum based on the requisition sent by the Assistant Commissioner (Assessment), Special Circle, Thiruvananthapuram, for realisation of a sum of Rs. 34,80,676/- from the petitioner towards arrears of sales tax for the assessment years 1989-90, 1990-91 and 1992-93 and 1993-94 and that the Tahsildar, Revenue Recovery, Trivandrum, issued demand notices under S.7 and 34 of the Revenue Recovery Act to the Petitioner. The 3rd respondent has stated that the recovery proceedings are in accordance with law. Though the petitioner has challenged the validity of the amendments made to the CST Act, the Union Government has not filed any counter.