Research › Search › Judgment

Punjab High Court · body

2003 DIGILAW 686 (PNJ)

Purshotam Trading Co. v. State Of Haryana

2003-05-13

G.S.SINGHVI, N.K.SUD

body2003
Judgment G.S.Singhvi, J. 1. This is the second round of litigation by the petitioners in the matter of levy of interest on account of non-payment of tax in accordance with the provisions of the Haryana General Sales Tax Act, 1973 (for short, "the Act"). 2. The petitioners are engaged in the business of rice shelling. During the years 1992-93 and 1993-94, they supplied levy rice to the authorities of Food and Supplies Department, Haryana Government and Food Corporation of India as per the requirement of the Haryana Rice Procurement Levy Order, 1985. However, they did not deposit the tax payable under the Act along with returns. Therefore, the assessing authority levied interest under the provisions of the Act. The plea of the petitioners for waiver of interest in terms of the policy contained in Haryana Governments letter dated September 22, 1989 was turned down by the assessing authority. They challenged the levy of interest by filing revision petitions which were dismissed by Deputy Excise and Taxation Commissioner, Karnal. C.W.P. No. 18243 of 2002 filed by them was disposed of by a Division Bench of this Court on November 16, 2002, (Purushotam Trading Co. v. State of Haryana (2003) 21 P&H Taxes 57) with the direction that representations dated January 23, 2001 and January 25, 2001 made by the petitioners be decided by the State Government within a period of three months. 3. In compliance of the direction given by the Court, Financial Commissioner and Principal Secretary to Government, Haryana, Excise and Taxation Department (hereinafter described "the competent authority") passed order dated January 7, 2003 (annexure P.7) declining the petitioners prayer for waiver of interest by recording the following observations : "The representationists though has shown the sales of rice in the returns for the relevant quarters but has not paid the differential tax on the ground that the sales of rice were made to the DFSC/FCI. The contention of the representationists for not making the payment of such tax with the returns is based on the instructions issued vide Government letter dated September 22, 1989. I have perused the contents of the said letter. The concession made by the Government regarding non levy of interest or penalty under the said letter, were in the cases where the assessment had already been framed and the amount of differential tax has been deposited by October 31, 1989. I have perused the contents of the said letter. The concession made by the Government regarding non levy of interest or penalty under the said letter, were in the cases where the assessment had already been framed and the amount of differential tax has been deposited by October 31, 1989. This relief of waiver of interest and penalty were also made applicable to all the assessment cases those were pending as on the date of issue of said letter, if the amount of tax assessed in such pending cases is deposited within a month from the date of assessment. The case of the representationists is not covered under aforesaid circular because the assessment order involved pertains to the year 1992-93 and 1993-94. The cases for these two years were not pending as on September 22, 1989, the date of issue of the letter which is being relied upon by the representationists. It is relevant to observe that the instructions contained envisaged one time concession only about the assessment cases those were pending as on September 22, 1989 and the object was to liquidate the pendency of such cases by the first week of October, 1989. The representationists, therefore, has no right to claim similar concession for the years 1992-93 and 1993-94. I have carefully considered the request of the representationist made in their representations, annexure P-3 and P-4, wherein a request has been made for issuing instructions either that along with difference tax amount interest is also be paid to the miller at 18 per cent till the payment is made or no interest and penalty can be levied for the delayed deposits in case the millers/dealers deposits the amount within one month of the receipt of the amount from DFSC/ FCI. The representationists are registered dealer in the State Acts as well as under the Central Act and their liability to pay tax is strictly regulated by the provisions of the State Act as well as the Central Act whereunder the time and manner of payment of tax has been clearly been laid down. I do not think any justification for interfering with the explicit provisions of law regarding payment of tax as I do not see any merit in the contention that they should not be made to pay the tax so long the tax has not been received from the purchaser of rice. I do not think any justification for interfering with the explicit provisions of law regarding payment of tax as I do not see any merit in the contention that they should not be made to pay the tax so long the tax has not been received from the purchaser of rice. A tax is payable at a specified stage within a specified manner irrespective of the fact whether the sale price or tax or both has not been received by the seller from the purchaser. The collateral request for a demand of interest by the miller at 18 per cent on the amount of tax not paid by the DFSC/FCI does not fall within the sphere of my authority as a Financial Commissioner and Principal Secretary to Government of Haryana, Excise and Taxation Department. It is between the miller and the purchaser." 4. Shri Avneesh Jhingan argued that the reasons assigned by the competent authority for declining the petitioners prayer for waiver of interest are legally unsustainable and, therefore, the impugned order should be quashed and a direction may be issued to the State to determine the issue afresh. He further argued that the policy contained in letter dated September 22, 1989 should be deemed to be applicable to the case of the petitioners because they were in no way responsible for non-payment of tax on due dates. 5. We have considered the submission of the learned counsel, but have not felt persuaded to agree with him. A reading of annexure P1 shows that the policy for waiver of interest was framed by the Government with the sole object of curtailing the pending litigation. It was confined to the cases in which the assessee deposited tax on October 1, 1989 and was also made applicable to the pending cases in which the assessee deposited tax within one month from the date of assessment. The Government also emphasised that pending cases should be finalised in the first week of October, 1989. The competent authority referred to the rationale of the policy framed by the Government and held that benefit thereof cannot be extended to the petitioners because they had defaulted in payment of tax in relation to the assessment years 1992-93 and 1993-94. 6. The Government also emphasised that pending cases should be finalised in the first week of October, 1989. The competent authority referred to the rationale of the policy framed by the Government and held that benefit thereof cannot be extended to the petitioners because they had defaulted in payment of tax in relation to the assessment years 1992-93 and 1993-94. 6. We approve the reasons assigned by the competent authority and hold that the claim of the petitioners for waiver of interest in terms of the policy contained in letter dated September 22, 1989 is not maintainable because the said policy was confined to the assessments made up to the cut-off date, i.e., October 31, 1989 and it is an undisputed position that cases of the petitioners relate to the assessment years 1992-93 and 1993-94. 7. During the course of hearing, we asked Shri Avneesh Jhingan to show any document from which it can be inferred that benefit of the policy contained in letter dated September 22, 1989 had been extended to the cases in which tax had been paid after October 31, 1989, but he could not bring to our notice any such policy or instruction. Therefore, we do not find any valid ground to entertain the prayer of the petitioners for directing the respondents to extend the benefit of the policy framed by the Government of Haryana for waiver of interest to a particular class of defaulters. 8. In the result, the writ petition is dismissed.