IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP.No. 20579 of 2001(Y)
1. M/S.KADABUKATTIL EXPORTS
... Petitioner
Vs
1. UNION OF INDIA
... Respondent
For Petitioner :SRI.C.K.THANU PILLAI
For Respondent :SRI.THOMAS ANTONY, ADDL.CGSC
The Hon'ble MR. Justice P.R.RAMACHANDRA MENON
Dated :18/05/2010
O R D E R
P.R.RAMACHANDRA MENON, J
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OP NO. 20579 OF 2001
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Dated this the 18th day of May, 2010
JUDGMENT
The issue involved in this Original Petition is whether the assessing
authority as well as the appellate authority were justified in demanding and
realizing interest under Section 23 (3) from the ‘date of the return’, instead
of having the same confined to the period from the date of raising the
demand.
2. The case of the petitioner is that the petitioner is a dealer in
plastics. In respect of the assessment year 1996-97, the 4th respondent
completed the assessment as per orders dated 30.10.2000 (Exts.P1 and
P2) and demand notices were issued, levying interest at the rate of 9%
under Section 23 (3) of the Act and Rs.11,090/- under the CST Act. In
addition to interest, the respondents demanded a balance sum of
Rs.10,100/- towards the ‘balance Registration fee’ and a compounding fee
of Rs.10,100/-, which in turn were subjected to challenge by filing STRP
3/01 and 4/01 before the 3rd respondent, who passed Ext.P3 verdict;
whereby the revision petitions were turned down, sustaining the orders
passed by the assessing authority. The petitioner is challenging the above
orders raising many a ground in the Writ Petition.
3. The respondents have filed a counter affidavit rebutting the
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averments and allegations raised by the petitioner. The petitioner has filed a
reply affidavit as well.
4. The learned counsel for the petitioner submits that the course
pursued by the assessing authority as well as the appellate authority fixing
huge liability upon the shoulders of the petitioners; particularly in respect of
the interest to be realized from the date of return; is not correct or proper.
Reliance is also placed on various decisions including the decision of the
Apex Court in Maruthy Wire Industries Pvt. Ltd. Vs. Sales Tax Officer
[(2001) 122 STC 410] contending that it is liable to be paid only from the date
of demand. The averment made by the respondents in counter affidavit that
the rate of tax is never subjected to challenge from the part of the petitioner
(page 3) is also rebutted in paragraph 5 of the reply affidavit, stating that the
rate of tax is very much being disputed by the petitioner and that the sales
tax revision under Section 41 of the Act is pending before this Court at the
instance of the petitioner, though the particulars of said case are not
discernible from the reply affidavit.
5. The learned Government Pleader with specific reference to the
counter affidavit, the relevant provisions of law and binding judicial
precedents submits that the issue is no more open to challenge by way of the
declaration of law in Chandramani Traders Vs. State of Kerala [16 VST
294]. The specific observation made by the Bench in paragraph 33 (last
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OP No. 20579/2001
sentence) is also brought to the notice of this Court which reads as follows.
” Since the assessee had not paid tax on the admitted turnover
at the specified rate of tax, this is a case where tax due under the Act
is not paid and therefore, the petitioner cannot escape the rigour of
the penal provision under the Act”.
6. It is pointed out that the actual rate of tax in respect of the
commodity dealt with by the petitioner was 20% and the law was declared by
this Court as per the decision in Maykutty Joseph Vs. State of Kerala (102
STC 79). This being the position, it was no more open to the petitioner to
have paid tax at the rate of ‘10%’ instead of satisfying the entire tax liability
under the relevant provisions of law, effecting payment at the rate of 20%. It
is also asserted that the version of the petitioner that the petitioner was
challenging rate of tax is not correct or sustainable, as no particulars are
furnished from the part of the petitioner. It is more so in view of the
submissions made by the learned counsel for the petitioner that the Revision
Petition filed by the petitioner under Section 41 before this Court has not
been assigned any number. It is settled that a case which has not been
numbered even, cannot be stated as pending, and it cannot cause any
adverse consequence with regard to the rights and interest of the other party
concerned.
7. With regard to the prayers raised in the Writ Petition, particularly
the second prayer, the learned Government Pleader submits that the same,
with regard to the challenge in respect of the retrospective levy of interest
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has been answered against the petitioner, by virtue of the decision reported
in M/s. English Indian Clays Ltd. Vs. Union of India and others [13 KTR
84]. Similarly, with regard to the 3rd prayer reliance is sought to be placed on
the observations made by the Division Bench in Kerala Electric Trades
Association and another Vs. State of Kerala and others [2004 (12) KTR
114 (Ker)]. The position is sought to be asserted with respect to the
‘compounding fee’ as well, pointing out that the course pursued by the
respondents is perfectly in conformity with the relevant provisions of law and
the binding judicial precedents.
8. The learned Government Pleader submits on the basis of
instructions obtained from the departmental authorities that, pursuant to
further steps taken, the petitioner has already satisfied the entire liability as
aforesaid in connection with the setting up of a new unit and that no further
recovery proceedings are due. This Court finds that the legal issue stands
squarely covered by the decisions referred to above, while the factual dispute
stands no more germane, as the liability has already been cleared. The
Original Petition is devoid of any merit. Interference is declined and it is
dismissed accordingly.
P.R.RAMACHANDRA MENON
JUDGE
dnc