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2010 DIGILAW 1090 (PNJ)

LAKHI RAM SURINDER SINGH v. STATE OF HARYANA.

2010-03-05

ASHUTOSH MOHUNTA, MEHINDER SINGH SULLAR

body2010
JUDGMENT Ashutosh Mohunta, J. - This judgment shall dispose of G.S.T.R. No. 13 of 1997 as well as G.S.T.R. No. 14 of 1997 to G.S.T.R. No. 20 of 1997. The Sales Tax Tribunal, Haryana has referred the following questions of law for adjudication by this honourable court : "(i) Whether the interest levied and charged under section 25(5) of the Haryana General Sales Tax Act, 1973 is legal ?" Briefly the facts of the case are that the assessee purchased sunbaked bricks from registered dealers after payment of sales tax, as the bricks were taxable at the first stage of sale. After purchase of the bricks, the assessee burnt them in the kiln and sold them without charging any sales tax from the subsequent purchasers. The assessee claimed deduction under section 18 of the Haryana General Sales Tax Act, 1973 (for short, "the Act"). The Assessing Authority did not allow the claim on the ground that unburnt bricks did not come within the purview of the notification dated May 5, 1973, issued by the Haryana Government. Accordingly the Assessing Authority created additional demand against the applicant and levied tax besides interest and penalty imposed under section 25(5) and section 47 of the Act. The assessee filed an application under section 42 of the Act wherein it was averred that no interest is payable on the additional demand created by the Department. The assessee also claimed that the question of law as framed by him in the application be referred to the High Court. This request was turned down by the Tribunal. It was challenged by the assessee in Sales Tax Case No. 21 of 1988 in which the High Court directed the Tribunal to frame the question of law as mentioned in the opening paragraph and to again refer the matter to the High Court. This is how the reference has been made. Mr. It was challenged by the assessee in Sales Tax Case No. 21 of 1988 in which the High Court directed the Tribunal to frame the question of law as mentioned in the opening paragraph and to again refer the matter to the High Court. This is how the reference has been made. Mr. Akshay Bhan, counsel for the petitioner, has placed reliance on J.K. Synthetics Ltd. v. Commercial Taxes Officer reported in [1994] 94 STC 422 (SC); [1994] 4 SCC 276 and Frick India Limited v. State of Haryana reported in [1994] 95 STC 188 (SC), wherein while relying on the judgment in J.K. Synthetics case [1994] 94 STC 422 (SC); [1994] 4 SCC 276 the Constitutional Bench of the Supreme Court held as under : "Under section 25 of the Haryana General Sales Tax Act, 1973, interest is due only on the amount of tax payable on the basis of the return. So long as the dealer pays the tax which according to him is due on the basis of the information supplied in the return filed by him, there would be no default on his part to meet his statutory obligation. The law does not envisage the dealer to predict the final assessment which he files the return and expect him to pay the tax on that basis to avoid the liability to pay interest." The present case is squarely covered by the aforementioned judgements in J.K. Synthetics case [1994] 94 STC 422 (SC); [1994] 4 SCC 276 and Frick India Limited case [1994] 95 STC 188 (SC). It is thus held that the assessee would not be liable to pay any interest on the additional demand as was created by the Department. The question of law is accordingly answered in favour of the assessee and against the Revenue. The aforesaid eight references are disposed of.