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Southern Traders Vs. Commercial Tax Officer - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberWrit Petition No. 7044 of 1981
Judge
Reported in[1984]56STC51(Mad)
ActsTamil Nadu General Sales Tax Act, 1959 - Sections 24(3)
AppellantSouthern Traders
RespondentCommercial Tax Officer
Appellant AdvocateN. Srivatsamani, Adv.
Respondent AdvocateR. Lokapriya, Adv. for Additional Government Pleader
Cases ReferredKhivraj Motors Ltd. v. Commercial Tax Officer
Excerpt:
- .....liable to pay sales tax under the tamil nadu general sales tax act, 1959. it was assessed to sales tax by the assessing authority for the years 1977-78 and 1978-79 at rs. 75,123. the said assessment order was not challenged by the assessee. however it appealed to the government of tamil nadu to permit it to pay sales tax levied in easy instalments. by an order in g.o. rt. no. 781, commercial taxes and religious endowments department, dated 18th november, 1980, the government permitted the petitioner to pay arrears of tax in ten equal monthly instalments, starting from january, 1981, subject to certain conditions. one of the conditions is that the petitioner has to furnish security to the satisfaction of the assessing authority towards the sales tax liability. though the assessee.....
Judgment:
ORDER

Ramanujam, J.

1. The petitioner in this case is a registered dealer, liable to pay sales tax under the Tamil Nadu General Sales Tax Act, 1959. It was assessed to sales tax by the assessing authority for the years 1977-78 and 1978-79 at Rs. 75,123. The said assessment order was not challenged by the assessee. However it appealed to the Government of Tamil Nadu to permit it to pay sales tax levied in easy instalments. By an order in G.O. Rt. No. 781, Commercial Taxes and Religious Endowments Department, dated 18th November, 1980, the Government permitted the petitioner to pay arrears of tax in ten equal monthly instalments, starting from January, 1981, subject to certain conditions. One of the conditions is that the petitioner has to furnish security to the satisfaction of the assessing authority towards the sales tax liability. Though the assessee paid certain instalments and furnished security, it has committed default in payment of monthly instalments. Thereafter, the assessing authority, however, has issued a notice on 7th March, 1981, calling upon the petitioner to pay penalty of Rs. 22,419.90 under section 24(3) of the General Sales Tax Act in respect of arrears of tax. The petitioner thereupon wrote to the assessing authority on 18th March, 1981, to waive the interest. However, its request for waiver was rejected. At that stage, the petitioner came forward with this writ petition, seeking a writ of certiorari to quash the order of the assessing authority dated 7th March, 1981, calling upon it to pay the penalty under section 24(3) on the ground that the said demand made under section 24(3) is illegal and unconstitutional. The grounds of attack raised by the petitioner are that since the Government had permitted the tax to be paid in instalments, section 24(3) cannot be invoked in its case and that the levy of penal interest under section 24(3) is also unconstitutional.

2. In the counter-affidavit filed by the respondent it has been pointed out that though the Government have permitted the petitioner to pay taxes in instalments, that is subject to certain conditions and in this case the petitioner not having fully complied with the conditions, the benefit given under the G.O. will not be available to the petitioner and in such a case section 24(3) gets automatically attracted. It has been pointed out in the counter-affidavit that as per condition in paragraph 2(c) of G.O. Rt. No. 781, Commercial Taxes, dated 18th November, 1980, the petitioner is liable to pay penal interest at 24 per cent on the outstanding arrears under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959, and therefore the Government has reserved their power to collect the penal interest under section 24(3) for defaulted instalments in the above G.O. which permitted the petitioner to pay in instalments and thus the levy of penal interest under section 24(3) is justified in this case. It is pointed out in the counter-affidavit that the constitutional validity of section 24(3) has been upheld by this Court in Writ Petition Nos. 1487 of 1981 to 1489 of 1981 reported in Khivraj Motors Ltd. v. Commercial Tax Officer [1982] 50 STC 141. It is seen that this Court has in the abovesaid decision has specifically upheld the constitutional validity of section 24(3) though it felt that the provision of section 24(3) is very stringent. Therefore, the constitutional attack made against section 24(3) by the petitioner has to be rejected in view of the said decision.

3. On the question as to how far the permission given by the Government to pay the tax in instalments in G.O. Rt. No. 781, C.T., dated 18th November, 1980, will affect enforcement of section 24(3) in the case of defaulted instalments it is found that in the G.O. it has been specifically mentioned in paragraph 2(c) that the petitioner is liable to pay penal interest at 24 per cent on the outstanding arrears till the date of clearance of the arrears under section 24(3) of the Tamil Nadu General Sales Tax and the penal interest will not be waived at any cost. Having regard to the conditions imposed in the said G.O., by granting permission to the petitioner to pay the tax in instalments, the operation of section 24(3) is kept intact and that is to be applied in the case of outstanding arrears and it also provides that penal interest cannot be waived at any cost. Therefore the petitioner's request for waiver of the penal interest could not be with complied by the respondent in view of the specific language contained in the G.O. In this view of the matter I do not see any merit in this writ petition. The writ petition is dismissed. There will be no order as to costs.


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