Back
IN THE HIGH COURT OF ALLAHABAD
Anshuman Singh, J.
QURESHI CRUCIBLE CENTRE - Appellant
Versus
COMMISSIONER OF SALES TAX - Respondents
S. T. R. 308 Of 1984
Decided On : 02/21/1985
Interest - Sales Tax - Assessment of Crucibles - The court held that the assessee was not liable to pay interest as there was no finding that the assessee acted mala fide in not depositing the tax at the enhanced rate. The circumstances did not warrant the levy of interest on the assessee.
Fact of the Case:
The assessee dealt in crucibles and the account books were rejected, leading to a best judgment assessment. The assessing authority imposed tax at a higher rate than the admitted tax deposited by the assessee, and also demanded interest. The first appeal accepted the books of account but maintained the demand of interest. The second appeal was dismissed by the Tribunal, which held the assessee liable to pay interest.
Finding of the Court:
The court found that there was no evidence of mala fide action by the assessee in not depositing the tax at the enhanced rate, and the circumstances did not warrant the levy of interest on the assessee.
Issues: Assessment of tax rate, demand for interest, mala fide action by the assessee.
Ratio Decidendi: The court held that in the absence of evidence of mala fide action by the assessee, and considering the history of tax assessment at a lower rate, the levy of interest was not justified.
Final Decision: The revision was allowed, the order passed by the Tribunal was set aside, and no costs were awarded.
( 1 ) THE assessee has preferred this revision against the order dated 31st May, 1985, passed by the sales Tax Tribunal, Moradabad, relating to the assessment year 1975-76.
( 2 ) THE assessee deals in crucibles. The account books of the assessee were rejected and best judgment assessment was passed. It is pertinent to mention that the assessee had deposited the admitted tax at 3. 5 per cent whereas the tax was imposed by the assessing authority at the rate of 7 per cent, as such the demand for payment of interest was also made from the assessee. The assessee feeling aggrieved filed a first appeal before the Assistant Commissioner (Judicial) who accepted the books of account but maintained the demand of interest. The second appeal filed by the applicant was dismissed by the Tribunal and the Tribunal also held that the assessee was liable to pay interest.
( 3 ) THE learned counsel for the assessee has contended that the Sales Tax Officer, Moradabad, while making the assessment of the assessee for the years 1971-72 and 1972-73 determined tax on crucible at the rate of 3. 5 per cent. He further contends that since the rate of tax imposed by the Sales Tax Officer in the previous years was at 3. 6 per cent and the assessee deposited the admitted tax at the rate of 3. 5 per cent and if "the rate of tax was subsequently enhanced the assessee was not liable to pay interest.
( 4 ) AFTER hearing learned counsel for the parties I am of the opinion that there have been no finding by the. Tribunal that the assessee acted mala fide in not depositing the tax at the rate of 7 per cent. The demand of interest was not justified. Since the Sales Tax Officer himself has been making assessment and determining the tax at the rate of 3. 5 per cent it cannot be said that the assessee did not deposit the admitted tax which was subsequently fixed at the rate of 7 per cent. The circumstances of the case are such which do not warrant the levy of interest on the assessee.
( 5 ) IN the result, the revision succeeds and is allowed and the order passed by the Tribunal is set aside. However, there will be no orders as to costs.
.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
