M/S.Amma Polymers vs The Commercial Tax Officer & … on 12 October, 2009

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

WA.No. 2250 of 2009()



1. M/S.AMMA POLYMERS
                      ...  Petitioner

                        Vs

1. THE COMMERCIAL TAX OFFICER & ANOTHER
                       ...       Respondent

                For Petitioner  :SRI.BOBBY JOHN

                For Respondent  : No Appearance

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice V.K.MOHANAN

 Dated :12/10/2009

 O R D E R
            C.N. RAMACHANDRAN NAIR &
                   V.K.MOHANAN, JJ.
          ----------------------------------------
                 W.A. No.2250 OF 2009
          ----------------------------------------
        Dated, the 12th day of October , 2009

                       JUDGMENT

Ramachandran Nair, J.

The appellant committed default in payment of

salestax for the assessment year 1989-90. When the

appellant approached this Court challenging the recovery

proceedings, this Court had ordered payment of

Rs.50,000/- from out of the outstanding arrears. The

appellant, vide Ext.P4, remitted Rs.50,000/- on 3.9.99.

subsequently, balance arrears were settled under

Amnesty Scheme introduced under section 23B of the

KGST Act. Under the Amnesty Scheme, appellant is

entitled to reduction of full interest of arrears due for

the period prior to 31.3.99 and, in fact, he is also

entitled to reduction of 25% tax. The appellant’s

grievance is that while granting amnesty benefit, the

assessing officer adjusted Rs.50,000/- paid on 3.9.99

WA 2250/09
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fully towards interest under Section 55 C and consequently,

appellant did not get full relief under amnesty scheme.

We find force in this contention because Section 55 C

came into force with effect from 1.1.2000 whereas

Rs.50,000/- was paid on 3.9.99. Even though the learned

Single Judge found that under the general law, creditors

were entitled to adjust interest first towards liability, we

do not find that the department has any such case which is

evident from the fact that Clause 2 of Section 55C

provides for finality of payments adjusted towards tax

prior to the commencement of the provision. Payment

first set off against principal amount is therefore

permissible under the Act and was in fact done by the

officer. However, Government Pleader contended that at

the time of payment, interest had already accrued and,

therefore, the payment should be against accrued

arrears which includes interest. From the rival

contentions, we feel that an equitable remedy can be

moulded for the petitioner by directing the officer to treat

WA 2250/09
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the adjustment against payment of Rs.50,000/- made on

3.9.99 partly towards principal amount and partly towards

interest. We direct the officer to make proportionate

adjustment of amount paid towards tax and interest in

proportionate to the amount outstanding at the time of

payment under the head ‘principal’ and ‘interest’.

Consequential relief should be granted in amnesty

benefit after adjustment as above and the same will be

communicated to the appellant with refund if any due

within two months from the date of receipt of this

judgment.

Writ appeal is allowed in part as above.

C.N.RAMACHANDRAN NAIR
JUDGE

V.K.MOHANAN,
JUDGE
kvm/-

WA 2250/09
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V.K.MOHANAN, J.

O.P.No.

JUDGMENT

Dated:..