Madras High Court
M/S.Udhayam Colours vs The Joint Commissioner (Ct) on 25 June, 2021
W.P.No.7243 of 2006
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 25.06.2021
CORAM
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
W.P.No.7243 of 2006
and
W.P.M.P.No.7952 of 2006
M/s.Udhayam Colours,
Rep., by Mr.S.Muthusamy, Partner,
152, Murugampalayam,
Iduvampalayam (P.O),
Tirupur, Coimbatore District. .. Petitioner
-vs-
1.The Joint Commissioner (CT),
(Revision Petition),
O/o The Commissioner of Commercial Taxes,
Chepauk, Chennai-5.
2.The Deputy Commercial Tax Officer,
Tirupur (Rural) Circle,
Tirupur, Coimbatore District. .. Respondents
Petition filed under Article 226 of the Constitution of India praying
for issuance of Writ of Certiorari to call for the records of the 1 st respondent
in R.P.No.J1/268/2004 and quash the order dated 30.12.2005.
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W.P.No.7243 of 2006
For Petitioner : Mr.M.Hariharan
For Respondents : Mr.K.Veluchamy,
Government Advocate
******
ORDER
The order impugned dated 30.12.2005 passed by the first respondent
is under challenge in the present writ petition.
2.The learned counsel appearing on behalf of the petitioner made a
submission that the first respondent cannot collect any interest under
Section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 and the said
position is confirmed by this Court in various judgments.
3.In respect of the impugned order, the learned counsel for the
petitioner solicited the attention of this Court that action was initiated
against several dealers and those dealers also filed writ petitions and the
said writ petitions were allowed. In respect of the very same impugned
order, this Court considered the issues in respect of other dealers and
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W.P.No.7243 of 2006
allowed the writ petitions on 23.03.2021 in the case of M/s.Talent Dyeing
and Ors. vs. Joint Commissioner (CT), Chennai and Anr. [W.P.Nos.7310
of 2006 etc., batch]. The relevant portions of the order dated 23.03.2021 are
extracted hereunder:-
“8.There is no dispute, that the tax was paid by the
petitioner before the Assessment orders were passed and
the respective Assessment order indicates that there is no
tax due from the petitioner. After the Assessment orders
were passed, a notice came to be issued to the petitioners
seeking to levy Penal Interest under Section 24(3), on the
ground, that although the petitioners had paid taxes and
surcharge belatedly, they were liable to pay penalty under
Section 24(3) of the TNGST Act. Under these
circumstances, the petitioners along with others filed
application for Revision Petition under Section 33 of the
TNGST Act before the Deputy Commissioner of
Commercial Taxes which came to be disposed by a
Common Order holding that the petitioners were liable to
pay interest. Against this aforesaid order a second
Revision Petition was filed before the Joint Commissioner
of Commercial Taxes under Section 35 of the TNGST Act
which has culminated in the impugned orders. The
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W.P.No.7243 of 2006
impugned orders proceed on the identical reasonings. The
relevant portion of the impugned order reads as under:
“4.I have examined the contentions of the
petitioner as stated in the grounds of revision
already filed with reference to the connected
records. The learned Deputy Commissioner in his
order dated 03.08.2004 have pointed out that the
process of dyeing the colour shade passed on to the
fabrics constitute sale of materials used in dyeing
under the works contract act as per the case
decisions from the STAT, Main Bench, in State
appeal 728 of 2001 and cross objections No.79/2003
dated 23.12.2003. (State of Tamil Nadu Vs. Farida
Prime Tannery Case).
The learned Deputy Commissioner further
pointed out that the dyeing contract is taxable under
works contract act and the date on which annual
return was due there is laibility to tax arises. The
quantification of taxes due is at the time of final
assessment only but the penal interest could be
demanded even for failure to pay advance payment
of tax under Section of 13 of the TNGST Act and
dismissed the revision petitions.
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W.P.No.7243 of 2006
5.I quite agree with the views expressed by the
learned Deputy Commissioner. The Department is
assessing the dying contract as taxable from the
beginning where as petitioner like dealers are
contenting that their transaction is not laible to tax,
the issue has been taken from Appellate Assistant
Commissioner to High Court of Madras. There are
certain legal decisions favorable to the department
and also to the dealers.
The petitioners have not paid legally due tax
to the department in time. The levy of penal interest
for belated payment of tax is reasonable and
justifiable. The Division Bench of the High Court of
Madras in the case of Indian Commerce and
Industries Company (P) Ltd, reported in 129 STC
509 have held that the levy of interest is justified and
automatic. Therefore, the levy made by the Assessing
Officer under Section 24(3) of the TNGST Act is
correct and is in order.
I am of the view that no interference is
required in the orders of the learned Deputy
Commissioner. The order passed by the Assessing
Officer and also Deputy Commissioner are
sustained.
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W.P.No.7243 of 2006
In the result, six revision petitions are
dismissed.”
9.The impugned order seems to indicate that the
petitioner has not paid the advance tax under Section 13 of
the TNGST Act and therefore the petitioner was liable to
pay Penal Interest under Section 24(3) of the TNGST Act.
The issue relating to payment by the Hon'ble Supreme
Court in EID Parry (India) Ltd Vs. Assistant Commissioner
of Commercial Taxes, Chennai, [2005] 12 STC 141 this
decision has been relied in the two other decisions which
has been cited above.
10.In the light of the decision of the supreme Court
in EID Parry (India) Ltd Vs. Assistant Commissioner of
Commercial Taxes, Chennai, [2005] 12 STC 141, these
Writ Petitions have been allowed.
11.Accordingly, these writ petitions stand allowed.
No costs. Consequently, connected Miscellaneous Petitions
are closed.”
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W.P.No.7243 of 2006
4.In view of the orders passed in W.P.Nos.7310 of 2006 etc., batch,
the impugned order passed by the first respondent in R.P.No.J1/268/2004
dated 30.12.2005 is quashed and the writ petition stands allowed. No costs.
Consequently, connected miscellaneous petition is closed.
25.06.2021
Index : Yes
Speaking Order
abr
To
1.The Joint Commissioner (CT),
(Revision Petition),
O/o The Commissioner of Commercial Taxes,
Chepauk, Chennai-5.
2.The Deputy Commercial Tax Officer,
Tirupur (Rural) Circle,
Tirupur, Coimbatore District.
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W.P.No.7243 of 2006
S.M.SUBRAMANIAM, J.
(abr)
W.P.No.7243 of 2006
25.06.2021
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