FASHION JEWELLERS AND EXPORTERS Vs. SALES TAX OFFICER

JUDGEMENT

(1.) Whether levy of penal interest for the delayed payment of additional sales tax payable under Section 5D of the Kerala General Sales Tax Act is justified or not is the question that has come up for consideration in this case.

(2.) Assessee is a dealer in gold ornaments. They opted to pay tax at the compounded rates under Section 7 of the KGST Act for the year 2001-02. The request of the assessee was accepted by the assessing authority. Later a demand notice No. 25153901/2001-02 dated nil was served on the petitioner informing him that he was permitted to pay a sum of Rs. 1 1,26,825/- for the period from 1.4.2001 to 31.3.2002 under Section 7(I)(a) of the Act. Petitioner was informed that the amount should be payable in monthly/quarterly instalments of Rs. 93,903/-. Later books of accounts were called for verification by the assessing authority. Assessee had conceded a total and taxable turnover of Rs. 5,40,04,824-99 and 2,57,38,130-97 respectively for the year. Final assessment for the year 2001-02 was completed under Section 7 of the K.G.S.T Act vide assessment order dated 20.6.2003. Assessing authority levied additional sales tax of Rs. 1,12,684/-Assessing authority also demanded an amount of Rs .61,974/- being the penal interest.

(3.) Order of the assessing authority was challenged by the assessee before the Deputy Commissioner stating that the assessing authority had erred in levying additional tax with effect from 23.7.2001 and that the assessing authority was not justified in levying interest for nonpayment of additional sales tax. Revision Petition filed by the assessee was rejected by the Deputy Commissioner holding that there is no infirmity in the order of the assessing authority. Assessee filed a further revision before the Commissioner which was also dismissed. Aggrieved by the same assessee has approached this Court. Learned single Judge found no error in the demand of penal interest for the additional sales tax demanded from the petitioner. Learned single Judge however, granted some relief to the petitioner by reducing the penal interest rate from 2% to 1%.