APPOLLO TYRES LIMITED Vs. THE ASSISTANT COMMISSIONER (ASSESSMENT)

JUDGEMENT

(1.) The petitioner is a Company engaged in the manufacture of automotive tyres and tubes. The original petition is filed challenging Ext. P1 assessment order under the Kerala General Sales Tax Act, 1963 (hereinafter referred to as 'the KGST Act' for short) for the assessment year 1996-1997 whereby the Assessing Officer levied penal interest of Rs. 15,41,178/- on the petitioner invoking Section 23(3) of the KGST Act. It is the case of the petitioner that, owing to a dispute that was pending between the assessee and the Department on the issue of inclusion of rubber cess in the purchase turn over of rubber, the petitioner had not included the rubber cess in the purchase turn over that was disclosed in the return filed by the petitioner. While paying tax, however, the entire tax that was due as per the return filed was paid by the petitioner. Subsequently, taking note of the developments that took place pursuant to the decision of the Supreme Court on the issue of inclusion of rubber cess in the purchase turn over, the assessment of the petitioner for the assessment year 1996-1997 was completed by including the rubber cess in the purchase turnover for the purposes of assessment. Thus, the petitioner become liable to pay additional amounts, by way of tax, on completion of the assessment. By Ext. P1 assessment order, this additional tax amount was demanded from the petitioner. In the assessment order, the Assessing Officer also proceeded to levy penal interest under Section 23(3) of the KGST Act on the differential tax amount. Ext. P1 assessment order, as already noted is impugned in the writ petition, to the extent it demands penal interest under S. 23(3) from the petitioner.

(2.) A counter affidavit has been filed on behalf of the respondents wherein the assessment order is sought to be justified based on the Division Bench judgment of this Court in the Sales Tax Officer v. Maruti Wire Industries Pvt. Ltd,1999 113 STC 19. It is further pointed out that in so far as the petitioner had not included the cess amount in the return, the provisions of Section 23(3) of the KGST Act would stand attracted and the amounts by way of penal interest could be demanded from the petitioner.

(3.) I have heard Sri. Pathros Matthai, the learned Senior counsel appearing on behalf of the petitioner as also the learned Government Pleader appearing on behalf of the respondents.