SETIA PAPER MILLS LIMITED Vs. STATE OF PUNJAB

JUDGEMENT

(1.) This is a petition under Section 22(2) of the Punjab General Sales Tax Act, 1948 (for short, "the Act") seeking a direction to the Sales Tax Tribunal, Punjab for referring the following questions of law to this court for opinion for the assessment year 1981-82:

(2.) The question before the authority was whether goods purchased on the strength of registration certificate/ST-22 forms, but used in construction of building could be treated as machinery. Though at the time of assessment, the claim was allowed by the assessing authority, however, later the case was taken up by the revisional authority for suo motu action under Section 21(1) of the Punjab General Sales Tax Act, 1948 (for short, "the Act"). The revisional authority while assessing the tax also levied interest on the assessee. The assessee failed in his appeal before the Tribunal. Even though question on merit with regard to levy of the tax has been raised in the petition, the counsel did not press the same keeping in view the small amount of the tax. However, he submitted that levy of interest on the assessee is totally contrary to settled position of law to the effect that no interest can be levied for the period before the demand is raised as tax due according to returns was paid and the claim made in the returns was also accepted by the assessing authority.

(3.) For the purpose, the counsel for the assessee relied upon judgments of the honourable Supreme Court in the cases of J.K. Synthetics Ltd. v. Commercial Taxes Officer, 1994 94 STC 422, Frick India Limited v. State of Haryana, 1994 95 STC 188 and Maruti Wire Industries Pvt. Ltd. v. Sales Tax Officer, 2001 122 STC 410 and a Full Bench of this court in United Riceland Limited v. State of Haryana,1997 104 STC 362. In United Rice-land Limited case [1997] 104 STC 362 (P&H) [FB], it was held as under: