COLGATE-PALMOLIVE (INDIA) LIMITED Vs. DEPUTY COMMISSIONER OF COMMERCIAL TAXES, CORPORATE DIVISION AND ORS.

JUDGEMENT

(1.) THE applicant, Colgate -Palmolive (India) Limited, a company incorporated under the Companies Act, 1956 having its place of business at Basundhara Building, 9th Floor, 2/7, Sarat Bose Road, Kolkata 700 020, in this application filed under Section 8 of the West Bengal Taxation Tribunal Act, 1987, has challenged the order dated July 28, 2007 passed by the West Bengal Appellate and Revisional Board (in short, "the Board") rejecting the claim of the applicant -company for adjustment of excess tax for the quarter ending March 31, 1997 with the tax payable by the company for the four quarter ending on March 31, 1998.

(2.) THE applicant -company is presently registered under the West Bengal Value Added Tax Act, 2003 (in short, "the VAT Act") and prior to enforcement of the VAT Act which came into force with effect from April 1, 2005, the applicant -company was registered under the West Bengal Sales Tax Act, 1994 (in short, "the 1994 Act").

(3.) ASSESSMENT of the applicant -company pertaining to the four quarters ending on March 31,1998 was completed on June 13, 2000. The applicant -company was directed to make payment of Rs. 1,76,26,3 72 as tax in addition to what had been paid by the applicant along with the return. This additional amount includes purchase tax to the extent of Rs. 20,000 and penalty to the extent of Rs. 25,000. In addition to tax, purchase tax and penalty, the applicant -company was also directed to pay interest to the tune of Rs. 73,60,413 for late payment of admitted taxes. It may be mentioned here that while submitting the return for the quarter ending on June 30, 1997, the applicant -company adjusted an amount of Rs. 52,42,464.61 claimed to have been paid in excess in March 1997 against the admitted tax of Rs. 4,15,22,145.04 for the quarter ending on June 30, 2007. This fact was not taken into consideration by the assessing authority at the time of making the assessment. This assessment order was challenged by the applicant before the DCCT/CD. The DCCT/CD in his order dated August 29, 2005 computed the liability of the applicant -company towards tax, surcharge and penalty payable at Rs. 15,37,57,214 and liability of interest at Rs. 26,86,080 total of which comes to Rs. 15,64,43,294. The amount paid was shown at Rs. 15,40,13,133. After giving credit of the amount paid, liability of the applicant -company was finally determined at Rs. 24,30,164. While disposing of the appeal petition, the DCCT/CD considered the points raised before him by the applicant regarding the payment alleged to have been made in excess for the quarters ending March 31, 1997 adjusted against the dues for quarter ending on June 30, 1998 but observed "since there is no provision in the WBST Act, 1994 to adjust any excess payment of tax shown in demand notices of previous year in the current return, the learned ACCT/CD was justified to neglect the excess payment of tax for Rs. 33,57,613 as stated above". This order of the DCCT/CD was challenged by the applicant before the Board. The Board came to the conclusion, "we do not find that the petitioner's contention has any strong legal footing. Hence, there is no ground for interference in the appellate order on the point of disallowance of adjustment of tax in the return filed by the petitioner. The petitioner, thus, having furnished the return for quarter ending on June 30, 1997 without full payment of admitted tax incurred liability to pay interest as envisaged under Section 31 of Act 1994. It says that where a registered dealer, or a dealer required to furnish return under Sub -section (3) of Section 30, furnishes a return referred to in that section in respect of any period by the prescribed date or thereafter but fails to make full payment of the tax payable under Sub -section (4) of that section in respect of such period by such prescribed date, he shall pay a simple interest at three per cent (two per cent with effect from April 1, 1998) for each British calendar month of default from the first day of such month next following the prescribed date up to the month preceding the month of full payment of such tax or up to the month prior to the month of assessment under Section 45 or Section 46, as the case may be, in respect of such period, whichever is earlier, upon so much of the amount of tax payable by him in order to such return as remains unpaid at the end of such month of default. Going by the aforesaid statutory provision, we are of the opinion that the learned DCCT rightly determined interest on admitted tax which remained unpaid till August 7, 2000, in accordance with the legal provision quoted above. The impugned order, therefore, does not warrant interference on this point" (para 15 and 16 of the Board's order dated July 20, 2007). Certain modifications were, however, made by the Board while passing the order dated July 20, 2007. The original demand as per calculation made by DCCT/CD amounting to Rs. 24,30,164 came down to Rs. 24,26,164.