IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Rev..No. 212 of 2008()
1. STATE OF KERALA ,REP. BY JOINT
... Petitioner
Vs
1. M/S.KANNUR SARVODAYA SANGH,
... Respondent
For Petitioner :GOVERNMENT PLEADER
For Respondent :SRI.N.K.SANATH KUMAR
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :03/06/2009
O R D E R
C.N.RAMACHANDRAN NAIR &
C.K.ABDUL REHIM, JJ.
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S.T. Rev. No.212 of 2008
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Dated this the 3rd day of June, 2009.
ORDER
Ramachandran Nair, J.
The question raised in the revision case is whether the Tribunal
was justified in cancelling interest levied on the respondent for the
assessment year 2000-2001. We have heard Government Pleader
appearing for the petitioner and counsel for the respondent.
2. Respondent claimed exemption on sale of their products which
was not maintainable. The irregular claim of exemption in the
monthly returns led to non-payment of tax. However, later assessment
was made declining exemption and respondent does not appear to be
contesting the assessment demanding tax. However, claim of interest is
challenged on the ground that officer did not issue demand notice and
consequently there is no default. The Tribunal allowed the claim
following the decision of the Supreme Court in MARUTI WIRE
INDUSTRIES PRIVATE LIMITED V. SALES TAX OFFICER (122
STC 410). However, Government pleader pointed out that the decision
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of the Supreme Court relied on by the Tribunal has no application in
respondent’s case because the decision is on the unamended provision.
We find force in this contention because by amendment interest is
made payable, if there is non-payment of tax in terms of statutory
provision i.e. Rule 21(7) which requires payment of tax along with
monthly returns. Further, Section 23(3A) was introduced with effect
from 1.4.1998 for recovering interest for belated payment of tax i.e. the
difference between tax demanded on assessment and the tax declared as
due by the assessee. By virtue of the amendment particularly that
introducing Section 23(3A), respondent was liable to pay interest for
delayed payment of tax. However, counsel appearing for the
respondent submitted that respondent is entitled to benefit of
notification G.O. No.215/08/TD dated 7.11.2008. According to him,
Government has waived tax liability including interest of Khadi
industries. If respondent is entitled to benefit of notification,
respondent is absolutely free to claim it before the officer. However,
for the reason stated above, the Tribunal’s order based on decision of
the Supreme Court in cancelling the interest is not tenable as the
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respondent is liable for payment of interest under Section 23(3A) of the
KGST Act. We, therefore, allow the revision by vacating the order of
the Tribunal and restoring the demand of interest with direction to the
officer to consider respondent’s claim of benefit under any notification.
C.N.RAMACHANDRAN NAIR
Judge
C.K.ABDUL REHIM
Judge
pms
