LAL CHAND ROSHAN LAL Vs. STATE

JUDGEMENT

(1.) THE petitioner claiming to be a proprietorship concern is resisting the demand for recovery of interest amount sought to be charged for alleged delayed payment of due sales tax and is accordingly seeking quashment or order dated 9 -8 -1995 passed by the Assessing Authority Sales Tax Circle K in this regard. The petitioner is dealing in the sale of Oil and cotton. It paid sales tax on the sale of oil but denied its liability in case of cotton for the Assessment years 1983 to 1988 on the plea that these were declared goods subjected to Purchase Tax in the State of Punjab and thus not subject to sales tax. This plea was hence rejected by the Assessing Authority holding it liable. The Authority, however, left the question of interest open to be dealt with later. It also transpires from record that the petitioner agitated the matter in writ petition No. 716/84 before this court which was disposed of by order dated 8 -11 -1991 with the direction that "it will deposit the amount of Sales Tax payable as per the Assessment order, but no interest shall be charged Upon this, it had come to believe that it would not have to pay interest but the Assessing Authority willed otherwise and after decade or so, the Authority again reactivated the question of interest and created a demand for the recovery of Rs. 32,670.06, Rs. 44,981.88, Rs. 52,961.96, Rs. 57,369.18 and Rs. 27,830.04 for the years 1983 -84. 1984 -85, 1935 -86, 1986 -87 and 1987 -88 respectively on account of interest. The petitioner assails the action on a variety of grounds. It says that since it had not defaulted in paying the due sales tax within the prescribed time, it could not be charged any interest for the period it had bonafide disputed its liability. It was not a case where the liability was admitted but not discharged but a case where the liability was bonafide disputed and as and when it was fixed, petitioner readily paid within the time specified and thus could not be accused of having defaulted to attract relevant provisions of Section 8. Alternatively, it is pleaded that the Assessing Authority could not have reopened the assessment without notice and at the back of petitioner which had become time -barred and that once it had failed to raise the interest in the Assessment order, it stood waived off.

(2.) THE writ petition is resisted by the respondents firstly, on the preliminary plea that it was not maintainable as the petitioner had failed to take recourse to the appropriate remedy provided by the General Sales Tax Act. It is explained that though the liability to pay interest was the subject matter of the relevant assessment orders but it was not charged because the issue was subjudice in the petitioners pending writ petition No. 761 /84. Appropriate proceedings were however, taken to raise the demand after the disposal of the writ petition and after show -cause notice to the petitioner on 29 -7 -1995 which went without any response. It is submitted that the Assessing Authority had only invoked the relevant provisions of the General Sales Tax Act charging interest on account of belated payment of sales tax by the assessee, for which no time limit was prescribed. The order dated 9 -8 -1995 raising demand was accordingly a separate order and could not be treated as reopening of the assessment. It is also claimed that the action was taken under Section 8(8) of the General Sales Tax Act.

(3.) THE rate of the issues raised in this petition would depend on the interpretation to be placed on the relevant previsions of Section 8(2) and 8(8) which are re -produced as under: - Section 8(2): - "If the tax or any other amount (due under this Act excluding interest) is not paid by the dealer or any other person, by whom it is payable within the period (allowed) the dealer or such other person shall be liable to pay interest on the tax or other amount from the date it was payable to the date of actual payment at the following rates..." Section 8(8): Notwithstanding anything contained. In this Act, but Subject to the provisions of sub -section (5) of Section 16 -C of this Act if a dealer fails to pay the quarterly tax under this section, he shall be liable to pay interest on the tax form the date it was payable to the date of actual payment at the rates prescribed in sub -section (2) of this Section and the provisions of Section 16 and Section 16 -A shall apply mutatis mutandis to the recovery thereof. Explanation 1 - Quarterly tax means the tax payable on the basis of a quarterly return required to be furnished under sub -section (2) of Section 7 or the tax determined for a quarter........."