NACHIMUTHU Vs. SALES TAX OFFICER

JUDGEMENT

(1.) The question raised is whether there is liability for penal interest under S.23(3) of the Kerala General Sales Tax Act (the Act) during the period the demand for tax stood set aside by virtue of order of an appellate authority, when the demand stood restored in subsequent proceedings. I shall set out the facts necessary for the decision of the case.

(2.) The petitioner is a dealer in Kattymore (I«ntamcv). The assessment year concerned is 1981-82. The petitioner collected and paid tax on his sales of Kattymore at 4% as if it is goods taxable multipoint. The assessing authority was however of a different opinion. According to him, Kattymore was a milk product falling under Entry 3 of the First Schedule to the Act taxable single point at 10% on the first sale. He completed the assessment Ext. P1 accordingly and demanded the differential amount of tax due from the petitioner. The order of assessment and the notice of demand were served on March 28,1983. The petitioner challenged the assessment in appeal before the Appellate Assistant Commissioner. The appeal was dismissed. But his second appeal to the Appellate Tribunal was successful. The Tribunal accepted his contention that Kattymore was not a milk product, but general goods taxable multipoint. The assessment of Kattymore at 10% under Ext. P1 was therefore set aside. The order of the Tribunal is dated September 9, 1987.

(3.) The revenue was not satisfied with the decision of the Tribunal and challenged it in revision in this court under S.41 of the Act The Tax Revision Case was allowed by the judgment dated March 9,1989 by which the levy of tax at 10% on Kattymore was upheld and the order of assessment Ext. P1 restored. The judgment of this court is reported as Deputy Commissioner v. Nachimuthu, 1989 (1) KLT 620 .