URBAN STANISLAUS AND COMPANY Vs. STATE OF KERALA

JUDGEMENT

(1.) SECTION 23 (3a) of the Kerala General Sales Tax Act, 1963, is under challenge. As per this provision, the accrual of interest for tax shall not stop running by virtue of stay orders.

(2.) THE facts necessary but not fully stated in the original petition, but gathered from records which are relevant are as follows : THE petitioner is a dealer in cashewnuts. THE assessment for the year 1986-87 was made on January 31, 1989 and rectified by a revised order dated March 7, 1989. THE main claim of the assessee for exemption for purchase turnover under section 5 (3) of the Central Sales Tax Act, 1956 of raw cashewnut was negatived by the assessing officer following the judgment in State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory [1953] 4 STC 205 (SC) holding raw cashewnut and cashew kernel exported are different commodities. This was upheld in appeal by the Deputy Commissioner in his order dated July 17, 1989 following the decision in State of Kerala v. Sankaran Nair [1986] 63 STC 225 (Ker) and further finding that there is no evidence of anterior contract. On second appeal before the Tribunal in T. A. No. 780 of 1989 dated October 16, 1989, there was no representation for the appellant. THE Tribunal found that the matter was covered by Sankaran Nair's decision [1986] 63 STC 225 (Ker), referred to above, and dismissed the appeal. T. R. C. No. 45 of 1990 raising the question of exemption under section 5 (3) of the Central Sales Tax Act was dismissed on August 10, 1992 as one covered by Full Bench decision in N. Sundareswaran v. State of Kerala [1993] 91 STC 476 (Ker); 1992 KLJ (TC) 401. Instead of moving SLP, petitioner preferred another O. P. No. 10220 of 1993 stating that they are taking steps and understands that the Supreme Court had been granting stay on condition of depositing 50 per cent and obtained admission of O. P. and interim order on condition of deposit of a portion of the demand on July 30, 1993. THE original petition was withdrawn on June 12, 1997. THEreafter, petitioner appears to have moved the Government and obtained a stay order on January 28, 1999 on condition of 20 per cent remittance. THE present O. P. is filed on the alleged threat of the Tahsildar demanding interest from November 1, 1989 to February 28, 1990, March 1990 to August 1993 and September 1993 to January, 1999 totalling to Rs. 18,47,732. THE Supreme Court held in Vijayalakshmi Cashew Company v. Deputy Commercial Tax Officer [1996] 100 STC 571, that the point raised in Shanmugha Vilas case [1953] 4 STC 205 (SC) and the issue raised are same and upheld the view. Thus the main issue raised has been concluded right through the proceedings. However, the matter is kept alive somehow even now. THErefore the pertinent question that will arise is whether is this not an attempt to avoid the payment of tax ? And should not the revenue get interest for the delayed payment of tax ? O. P. No. 1591 of 1996 : 2a. In this case, an assessment order for the year 1986-87 was completed on February 27, 1990 which was subsequently modified by the Deputy Commissioner in an appeal dated February 7, 1991. This was confirmed by the Appellate Tribunal. During the pendency of the appeal, the Tribunal stayed the collection for the period from March 23, 1991 onwards. THE interest had been re-computed for the period of stay up to November 1, 1995. O. P. No. 17859 of 1995 :

(3.) UNDER the Kerala General Sales Tax Act, the impugned provision, viz. , section 23 (3a) specifically states that period of stay shall not be excluded in calculating interest. This provision is made applicable to pending demands. Section 23 (3) as such enables demand of interest on the assessed tax if not paid. Hence the law laid down by the Supreme Court applies to this case in all fours. Their Lordships observed as follows : " The above provision was apparently added with a view to tighten up the machinery for collection of sales tax and as a deterrent measure so that the dealers may not evade or delay the payment of tax. " Their Lordships rejected the argument for a separate notice. The liability to pay interest arises by operation of law. The amount of interest on the date of payment is not constant but increases from day to day. Hence it will not be possible to specify the amount in a certificate. It is a matter of arithmetical calculation. No elaborate procedure is required for that.