I.T.I. Limited, Kanjikode West, Palakkad V. The Assistant Commissioner (Asst.)- I, Sales Tax, Special Circle, Palakkad and The Deputy Commissioner, Agricultural Income Tax & Sales Tax, Palakkad and The Commissioner of Commercial Taxes, Thiruvananthapuram

OP/38378/2002

AI Insights

The case involves M/S. I.T.I. Limited, a government undertaking, challenging the levy of interest under Section 23(3) of the Kerala General Sales Tax Act for delayed payment of Central Sales Tax. The petitioner argued that the levy was illegal and unauthorized, citing a lack of provision in the KGST Act at the time of the original order. The respondents, government tax authorities, upheld the levy through subsequent orders. The court found merit in the petitioner's argument that they were not given an opportunity to be heard and that the quantification of the amount was also in question. Consequently, the court quashed the earlier orders and directed a reconsideration of the matter under the condition that the petitioner remits half of the levied amount.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 689901 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 18-11-2013
• Assessment Year: misc
• Other Referred Cases: India Carbon Ltd. v. State of Assam [106 STC 460]
• Laws Referred To: Kerala General Sales Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SUDHEESH KUMAR
• Assessee Lawyers: T M SREEDHARAN; TONY CHACKO
• Keywords: Central Sales Tax; Delayed Payment; Interest Levy; Retrospective effect
• Section: 23(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.V.RAMAKRISHNA PILLAI MONDAY, THE 18TH DAY OF NOVEMBER 2013/27TH KARTHIKA, 1935 OP.No. 38378 of 2002 (R) ----------------------------------- PETITIONER: ------------------- M/S. I.T.I. LIMITED, KANJIKODE WEST, PALAKKAD, [GOVERNMENT OF INDIA UNDERTAKING], REPRESENTED BY K.C. SREEKANDAN, FINANCE MANAGER. BY ADVS.SRI.T.M.SREEDHARAN, SRI.TONY CHACKO. RESPONDENTS: ------------------------ 1. THE ASSISTANT COMMISSIONER (ASST.)- I, SALES TAX, SPECIAL CIRCLE, PALAKKAD. 2. THE DEPUTY COMMISSIONER, AGRICULTURAL INCOME TAX & SALES TAX, PALAKKAD. 3. THE COMMISSIONER OF COMMERCIAL TAXES, THIRUVANANTHAPURAM. BY SR. GOVT. PLEADER (TAXES) SRI. SUDHEESH KUMAR. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 18-11-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Prv. O.P. NO.38378/2002-R: APPENDIX PETITIONER'S EXHIBITS: EXT.P.1 : COPY OF THE ORDER DTD. 19/12/1995 PASSED BY THE R.1. EXT.P.2 : COPY OF THE REMINDER LETTER DTD. 13/06/1996 SENT BY THE R.1. EXT.P.3 : COPY OF THE LETTER DTD. 28/12/1995 SUBMITTED BY THE PETITIONER TO THE R.1. EXT.P.4 : COPY OF THE ORDER IN S.T.R.P. NO.69/96 DTD. 05/11/1999 PASSED BY THE R.3. EXT.P.5 : COPY OF THE ORDER IN S.T.R.P. NO.28/01 (R3-68253/99/CT DTD. 13/11/2002 PASSED BY THE R.3. RESPONDENTS' EXHIBITS: NIL. //TRUE COPY// P.A. TO JUDGE. Prv. A.V. RAMAKRISHNA PILLAI, J. -------------------------------------------------- O.P. No. 38378 of 2002 -------------------------------------------------- Dated this the 18th day of November, 2013 J U D G M E N T The question involved in this writ petition relates to the levy of interest under Section 23(3) of the Kerala General Sales Tax Act (in short “KGST Act”) for delayed payment of Central Sales Tax (CST). According to the petitioner, the levy is illegal and unauthorized. 2. The 1st respondent, by his proceedings dated 19.12.1995, required the petitioner to pay a sum of 13,78,161/- as interest under Section 23(3) of the KGST ₹ Act as, according to him, interest was leviable under Section 23(3) for the delayed payment of CST. Ext.P1 is the copy of the said order. By Ext.P4 order in revision, the said order was confirmed. 3. The learned senior counsel for the petitioner would submit that at the time of passing of Ext.P4, there was no provision in the KGST Act for levying interest for delayed payment. It was also pointed out that this position O.P. No. 38378 of 2002 ..2.. was upheld by the apex court in India Carbon Ltd. v. State of Assam [106 STC 460]. However, it was brought to my notice that subsequently, the law was amended giving retrospective effect to the same. Therefore, the learned Special Government Pleader, Taxes, relying on the decision of this Court in WA No.1037/2005, would argue that there is absolutely no scope for reconsideration of the question. 4. But, it was submitted by the learned senior counsel for the petitioner that the orders were passed without affording to the petitioner an opportunity of being heard and; apart from that, quantification of the amount also is an important aspect. 5. Considering the entire facts and circumstances of the case, this Court is of the definite view that it is only just and proper to afford to the petitioner an opportunity of being heard in the matter. However, it was submitted by the learned Special Government Pleader that the petitioner be directed to remit a portion of the amount levied, if the matter is directed to be reconsidered. O.P. No. 38378 of 2002 ..3.. In the result, the writ petition is disposed of quashing Exts.P1 and P5. The 1st respondent shall reconsider the issue after affording an opportunity of being heard to the petitioner. This shall be on condition that the petitioner shall remit half of the levied amount within a period of one month from today if he had not remitted any such amount. The petitioner shall be at liberty to produce records in support of his contentions. For avoiding delay, the petitioner shall produce a copy of this writ petition as well as a copy of this judgment before the 1st respondent within a period of one month, after remitting the amount as aforesaid. Once this is done, the 1st respondent shall dispose of the matter within a period of two months. This writ petition is disposed of accordingly. Sd/- A.V. RAMAKRISHNA PILLAI, JUDGE bka/- "