BROOKE BOND INDIA LIMITED Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The Gujarat Sales Tax Tribunal has referred the following question of law arising out of its decision dated 31.8.1988, in revision application No. 41 of 1985 at the instance of assessee:

(2.) The facts that have given rise to this question are that the applicant M/s. Brooke Bond India Ltd. has been carrying on the business of tea and coffee. It holds registration certificate under Gujarat Sales Tax Act, 1969 and under the Central Sales Tax Act in respect of its business that is being carried on in the State of Gujarat where it has a factory at Jamnagar and further divisions at important centres in the State of Gujarat. The period of taxation in respect of which present controversy has arisen is in respect of turn over between 1.7.80 to 30.7.81. For this period, the petitioner had submitted quarterly returns as required under the provisions of the Act, and has paid the tax at prescribed intervals in accordance with the declarations and returns submitted by him. According to applicant no purchase tax was payable by it on chicory roots which was purchased from the agriculturists who were not registered dealers. On the premise of this claim, the applicant claimed deduction of such purchases from his taxable turnover and did not pay the purchase tax on such purchases at the time of filing return. This plea of the assessee was supported by decision of Tribunal rendered in the case of M/s. Paglam Traders v. State of Gujarat on 29.9.76. The assessment was framed originally on 17.3.83. The assessing officer did not accept the claim of the assessee as to immunity from payment of purchase tax on chicory roots as by that time Tribunal has changed its earlier decision and following that later decision of the Tribunal the claim of the assessee as to exemption of tax on purchase of chicory roots was denied and additional tax in that respect was computed, demand notice was issued which also according to undisputed facts was paid within the time specified in the demand notice.

(3.) It appears thereafter, the Assistant Commissioner of Sales Tax initiated proceedings for revising the aforesaid assessment order. The proceedings for revision were initiated for the reason that though the assessing authority has held purchases on chicory roots to be taxable and levied tax thereon he has not levied interest in terms of Section 47(4A) of the Gujarat Sales Tax Act 1969 (Hereinafter called `the Act'). The Assistant Commissioner of Sales Tax levied interest on the additional tax with effect from the date of filing the returns as if the said tax was payable under Section 47(2) of the Act before filing of the return and as the assessee has failed to pay the tax on the basis of final assessment at the time of filing of the return levied the interest amounting to a sum of Rs.2,85,490.15ps. The assessee challenged this order of levying interest under Section 47(4A) of the Act. The Tribunal relying on the decision of Supreme Court in Associated Cement Company v. Commercial Tax Officer, Kota and Others (48 STC 466) upheld the order of the Assistant Sales Tax Commissioner regarding levy of interest. The assessee applied for making a reference to this court pointing out that decision in Associated Cement Company (supra) case has since been overruled by Supreme Court in its later decision, in M/s. J.K. Synthetics v. The Commercial Tax Officer (94 STC 422). In these facts and circumstances the above question has been referred to us.