Allowed

M/S. Millennium Moros v. the Assistant Commissioner

Madras HC5 Sept 2019WP/19206/2009

Case brief

AI extract

What is this about?

The High Court allowed a batch of writ petitions challenging the levy of penal interest under Section 2(1)(aaa) of the Tamil Nadu Additional Sales Tax Act, 1970. The Court held that since no order of assessment quantifying a tax demand was passed, no penal interest was liable to be levied.

What did the court decide?

Writ petitions filed for quashing proceedings levying interest were allowed; connected miscellaneous petitions are closed.

M/S. Millennium Moros Vs the Assistant Commissioner — Writ and Judicial Review | Madras HC (2019)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 05.09.2019

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CORAM

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THE HONOURABLE Dr. JUSTICE ANITA SUMANTH

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W.P.Nos.19206 to 19208 of 2009 and M.P.Nos.1,1,1,2,2 and 2 of 2009

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M/s.Millennium Motors, (A Unit of DRS Industries) Rep by its Managing Director-D.Shivakumar, SF 581/1, Gold Wins, Civil Aerodrome Post, Chinniyampalayam. Coimbatore. ... Petitioner in all the WPs Vs.

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The Assistant Commissioner (CT)(FAC), Peelamedu North Circle, Coimbatore. ... Respondent in all the WPs

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Common Prayer:- Writ Petitions filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorari, calling for the records of the impugned proceedings of the Respondent in TNGST 2121521/2002-03, TNGST 2121521/200304 and TNGST 2121521/2004-05 dated 11.09.2009 respectively, quash the same as illegal and in violation of section 2(1)(aaa) of the Tamil Nadu Additional Sales Tax Act, 1970.

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(In all the WPs) For Petitioner : Mr.S.Rajasekar

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For Respondent : Mr.V.Haribabu Additional Government Pleader (Tax) COMMON ORDER

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The petitioner challenges proceedings dated 11.09.2009 for the periods 2002-2003, 2003-2004 and 2004-2005 levying interest under Section 2(1)(aaa) of the Tamil Nadu Additional Sales Tax Act, 1970 being interest on additional tax or penalty in terms of the Additional Sales Tax Act (in short Act). Section 2(1) (aaa) reads as follows:

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Section 2(1)(aaa): On any amount of additional tax or penalty imposed by the assessing https://hcservices.ecourts.gov.in/hcservices/ authority remaining unpaid under this Act, the dealer referred to in clause (aa) shall pay interest as specified in sub-section (3) of section 24 of the

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said Act, in addition to such amount of additional tax or penalty due.

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(Inserted by Amendment act 14 of 2005 deemed to have been effective from 01^st April 1970)

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2.The writ petitions can be allowed on the following short points:

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The relevant and offending portion of order dated 11.09.2009 for the period 2002-2003 is extracted below for clarity:

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Month Return Addition Additional Sales Pay- Num- Intere
& due & al Sales Tax paid ment ber st u/s
Year date tax due date of 2(1)
days (aaa)
dela in Rs.
-yed
Apr- 20.5.0 Rs.20021 Rs.185639- 20.6.0 31 135
02 2 9 adjusted from 2 days
entry tax April
02 Rs.6516-
adjusted from
Entry tax May 02
May- 20.6.0 Rs.34569 Rs.345693
02 2 3 adjusted from
Entry tax May 07
excess Rs.6516
adjusted from
April 07
Jun- 20.7.0 Rs.96252 Rs.774219 20.9.0 62 7083
02 2 8 adjusted from 2 days
Entry Tax June 02
Rs.171352
adjusted from
Entry tax Aug 02
Rs.16957-
Jul- 20.8.0 Rs.56323 Rs.563230- 21.10. 62 23280
02 2 0 adjusted from 02 days
entry tax paid on
Sep 02
Rs.1068690-
Aug- 20.9.0 Rs.83889 Rs.505460- 21.10. 31 10446
02 2 0- Adjusted from 02 days
2182
Entry tax paid on
23.11. 64
Sep 02 Rs.96247 – 14547
02 days
adjusted from
Entry tax paid on 10.1.0 92
Oct 02 Rs.237183- 3 days
adjusted from
entry Tax paid on
Nov 02 out of
https://hcservices.ecourts.gov.in/hcservices/
Rs.812028

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Month Return Addition Additional Sales Pay- Num- Intere
& due & al Sales Tax paid ment ber st u/s
Year date tax due date of 2(1)
days (aaa)
dela in Rs.
-yed
Sep- 20.10. Rs.92031 Rs.574845- 10.1.0 82 31425
02 02 4 adjusted from 3 days
1675
entry tax paid on
31.1.0 103
Nov 02 Rs.24399- 27184
3 days
adjusted from
Entry tax paid on 24.2.0 127
Dec 02 Rs.321070- 3 days
out of Rs.
1961913 paid on
24.2.02
Oct- 20.11. Rs.41168 Rs.411684- out of 24.2.0 96 26348
02 02 4 Rs.1961913- paid 3 days
24.2.03
Nov- 20.12. Rs.38845 Rs.388452- out of 24.2.0 66 17092
02 02 2 Rs.1961913- paid 3 days
on 24.2.03
Dec- 20.1.0 Rs.41772 Rs.417723- out of 24.2.0 35 9747
02 3 3- Rs.961913 paid on 3 days
24.2.03
Jan- 20.2.0 Rs.84292 Rs.28448- out of 9.5.03
03 3 9- Rs.1264728-
9.5.03 78 21837
Rs.391497- days
24.2.0 1128
Rs.422984 3 4
adjusted from days
1961913-
Feb- 20.3.0 Rs.42179 Rs.421798- out of 9.5.03 50 14060
03 3 8 Rs.1264728- days
Mar- 20.4.0 Rs.55338 Rs.553380- out of 9.5.03 19 7099
03 3 0- Rs.1264728- days
Tota 215178
l

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3.The petitioner in this case, has admittedly, not remitted any payments of additional sales tax. The returns of Entry Tax and Sales Tax have been filed within the due dates prescribed. Excess of Entry Tax paid as per regular monthly returns is available with the Department. The payment or otherwise of additional sales tax would become necessary only if the turnover of the petitioner is excess of Rs.10 crores, which position the assessee will ascertain for a fact, only at the end of the relevant financial year.

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https://hcservices.ecourts.gov.in/hcservices/ 4.The Assessing Authority has proceed suo motu, to adjust the additional sales tax due from the excess entry tax available. This is clear from a perusal of the entries extracted

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above. For example in regard to the month of April 2002, Returns of sales and entry tax were filed on 20.05.2002. The additional sales tax payable is a sum of Rs.2,00,219/-. The aforesaid amount has been adjusted on 20.06.2002 as against Rs.1,85,639/(excess entry tax for April 2002) and Rs.6,516 (excess entry tax paid for May 2002). The officer arrives at a delay of 31 days between the period 20.05.2002, being the date on which return should be filed and date of adjustment which is 20.06.2002. The scenario is identical in respect of all the months in question. Thus, in all cases, amounts in excess of the entry tax were well available with the Department. In such a situation, there is no delay in remittance of additional sales tax, as the officer could, and ought to have effected adjustment of the additional tax due against excess entry tax immediately upon completion of the year. Thus, there is no question of any liability to interest as well.

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5.A Division Bench of this Court in the case of M/s.Kone Elevator India Pvt. Ltd., 30, III Street, Abhiramapuram, Chennai-18 vs. The Commercial Tax Officer, Mandaveli Assessment Circle (W.A.No.306 of 2008 order dated 24.07.2009) at paragraph No.6 has stated that unless an order of assessment has been passed quantifying a demand of tax, no penal interest is liable to be levied. In the present case, there is no admittedly, order of assessment passed as far as additional sales tax is concerned. On the basis of the aforesaid reasoning, these writ petitions are allowed. Consequently, connected miscellaneous petitions are closed.

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Sd/Assistant Registrar(CCC) //True Copy// Sub Assistant Registrar

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The Assistant Commissioner (CT)(FAC), Peelamedu North Circle, Coimbatore.

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+1cc to Mr.Mr.S.Rajasekar, Advocate Sr.77044 [20/01/2020] +1cc to the Special Government Pleader Sr.77344[20/01/2020]

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W.P.Nos.19206 to 19208 of 2009 and M.P.Nos.1,1,1,2,2 and 2 of 2009

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https://hcservices.ecourts.gov.in/hcservices/ Mg[co] srg 03/12/2019

M/S. Millennium Moros v. the Assistant Commissioner

Case brief

What is this about?

What did the court decide?

M/S. Millennium Moros v. the Assistant Commissioner

Case brief

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