RACHANA BAR Vs. THE COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) THE petitioner is aggrieved by Exhibit P6 notice issued for realisation of arrears, being the turnover tax under the Kerala General Sales Tax Act, 1963 [for brevity "KGST Act"] for the year 2009 -10.

(2.) THE assessment and the demand are not disputed. Revenue recovery proceedings were initiated as per Exhibit P2. The petitioner approached this Court with Exhibit P3, wherein it was contended that payments made already were not given credit to. The petitioner specifically averred in the said writ petition that an amount of Rs. 2,55,778/ - paid by the petitioner in the subject year was not given credit. This Court, by Exhibit P3 judgment, directed to give credit to such amount, if payment is proved; and also granted four equal monthly instalments to pay off the balance liability. Subsequently, pursuant to Exhibit P3 judgment, Exhibit P4 Rectified Order was issued on 14.03.2013. The allegation of the petitioner, that, payments made were not credited, stood substantiated by Exhibit P4 order. Rectification was made and a demand for Rs. 7,46,427/ - and interest at Rs. 3,12,172/ - was raised. The petitioner remitted that amount as per the instalments granted by this Court before the Inspecting Assistant Commissioner, who is the Recovery Officer.

(3.) IT is trite that under Section 55C of the KGST Act, appropriation has to be made first towards interest and the balance available towards principal outstanding. Hence, satisfaction of interest first and the balance against the demand of Rs. 7,46,427/ - towards TOT is justified. But, the Assessing Officer shall not calculate any interest prior to 14.03.2013. The amount payable as on 14.03.2013 is crystallized in the order Exhibit P4 and definitely future interest could be computed as per the appropriation made under Section 55C and a statement issued to that extent of the payments made in instalments. Hence, subsequent to Exhibit P4, when instalments are made, as directed in Exhibit P3; first the interest due should be satisfied. While any portion of the interest remains due, the tax demand would carry interest. On the interest being satisfied, payments should be credited to the tax demand. There shall be a direction to the 1st respondent to compute such amounts and give a statement to the petitioner within three weeks from today and if the petitioner remits the said amounts within three weeks therefrom, there shall be no further demand made.