- (1.) R. K. GULATI, J. These are two connected Sales Tax Revisions in respect of assessment years 1988-89 and 1989-90 and are directed against a common order dated March 20, 1993 passed by the Sales Tax Tribunal, Bench-II, Allahabad. It may be observed that by the said order as many as six appeals were decided by the Tribunal. In these revisions we are concerned with only two appeals arising from orders passed under section 22 of the U. P. Sales Tax Act, now called the U. P. Trade Tax Act (for short, "the Act"), whereby, the levy of interest under sub-section (1) of section 8 of the Act was upheld. As a common controversy is involved in these two cases, arising from common facts, it is convenient to decide both the revisions together.
(2.) IN the assessment years in question the assessee dealt in sale and purchase of "coconut with husk". It may be observed that a learned single Judge of this Court in Commissioner of Sales Tax, U. P. v. Kedari Lal Barsaiya [1979] 43 STC 429; 1978 UPTC 698 had expressed a view that "kachcha naryal" is a "fresh fruit" and its turnover was exempt from tax under Notification No. ST. 911-X, dated March 31, 1956. While referring to the above decision, the Commissioner of Sales Tax, U. P. , issued a Circular No. Vidhi-1 (1)- (0-1)-87-88-3017/mukhyalaya, dated December 28, 1987 annexure-1 to the revision, that as kachcha naryal has been held to be a fresh fruit, the "coconut with husk" if comes under that category, it should also be exempted from tax treating it as a fresh fruit. The circular also stated that it is a question of fact whether "coconut with husk" is sold by the vegetable vendors for use as vegetable and consequently, in terms of the decision aforesaid, coconut with husk is exempt from tax. Sub-sequently, in P. A. Thillai Chidambara Nadar v. Additional Appellate Assistant Commissioner, Madurai [1985] 60 STC 80 (SC); 1985 UPTC 1141, a case arising under the Tamil Nadu General Sales Tax Act, 1959, the Supreme Court took a different view that ripened or coconut with husk is neither "fresh fruit" nor "vegetable" so as to earn exemption from levy of tax. Because of the decision of the Supreme Court, the Commissioner of Sales Tax, U. P. , issued another circular No. Vidhi-1 (1) (0-1) 88-89-2591/ Bikri-Kar, dated December 15, 1988 which was to the following effect : " Jata nariyal ki kar deyata ke sambandh me manniya uchchatam nyayalaya dvara assistent commissioner, madurai end other banam P. A. thillai chidambaram nadar, state of Tamilnadu, 1985 U. P. T. C. prushtha 1141, dinank 29. 7. 1985 me nirnaya diya gaya hai ki jata nariyal taje fhal (fresh fruit) tatha sabji (vegetable) ki shreni me nahi aata hai krupya uprokta nirnaya ke pariprekshya me karyavahi karana sunishchit kare". Yet another circular came to be issued by the Commissioner of Sales Tax, being Circular No. 1 (1) (0-1)-89-90-2303/bikrikar. dated January 4, 1990. In this circular it was, inter alia, pointed out that in view of the decision of the Supreme Court in the case of P. A. Thillai Chidambara Nadar v. Additional Appellate Assistant Commissioner [1985] 60 STC 80 "coconut with husk" is not a "fresh fruit" or "vegetable" and consequently, vide circular dated December 15, 1988 directions were issued for assessments treating "coconut with husk" as a taxable commodity. Further, in view of the representations received from the trading community, the State Government has taken the decision that the turnover of "coconut with husk" in respect of the period prior to December 14, 1988 may be assessed to tax as an unclassified item at 8 per cent under section 3-A of the Act but no tax in respect of such turnover up to December 14, 1988 would be realised. Penalty and interest will also be exempted. Now reverting to the facts of the case again it may be observed that the revisionist-assessee filed no return of its turnover for the assessment year 1988-89. However, in respect of the other assessment year, namely, 1989-90, returns were filed on August 27, 1989 for the months of April, May and June only with the allegation that the business was closed down thereafter. By two separate assessment orders one for each assessment year, the assessing authority brought to tax the turnover of "coconut with husk". For the assessment year 1988-89 the assessment was completed on a turnover of Rs. 46,475 and a tax liability of Rs. 9,546 was determined. Likewise for other assessment year the turnover was assessed at Rs. 72,612 and a tax liability of Rs. 7,660 was determined. Subsequent to the making of those assessments the assessing authority resorted to penalty proceedings under section 15-A (1) (a) and 15-A (1) (o) of the Act and also initiated proceedings for rectification of the assessment orders under section 22 with a view to charge interest under section 8 (1) of the Act treating the assessed tax liabilities aforesaid as the tax admittedly payable by the assessee in terms of section 8 (1) of the Act.
(3.) IT is not necessary to refer the penalty proceedings any more as we are not concerned with them. IT may be observed that the assessee challenged the validity of proceedings under section 22 of the Act and also its liability to pay interest. The case taken by the assessee however, did not find favour with the assessing authority and by two separate orders passed under section 22 the assessing authority rectified the assessment orders for the years in question and levied an interest of Rs. 3,584 for the period December 15, 1988 to March 31, 1989 in respect of the assessment year 1988-89 and Rs. 3,461. 75 for the assessment year 1989-90. The orders of rectification were also upheld in appeals successively, first by the Assistant Commissioner (Judicial), Sales Tax, and thereafter on second appeal by the Sales Tax Tribunal. Feeling still aggrieved, these revisions have been preferred by the assessee. At this stage, it would be appropriate to set out the relevant provisions having a bearing on the controversy in issue. Section 8 : " 8. Payment and recovery of tax.- (1) The tax admittedly payable shall be deposited within the time prescribed or by the thirty-first day of August, 1975, whichever is later, failing which simple interest at the rate of two per cent per mensem shall become due and be payable on the unpaid amount with effect from the day immediately following the last date prescribed till the date of payment of such amount whichever is later, and nothing contained in section 7 shall prevent or have the effect of postponing the liability to pay such interest. Explanation.- For the purpose of this sub-section, the tax admittedly payable means the tax which is payable under this Act on the turnover of sales or, as the case may be, the turnover of purchases, or of both, as disclosed in the accounts mentioned by the dealer, or admitted by him in any return or proceeding under this Act, whichever is greater, or, if no accounts are maintained, then according to the estimate of the dealer and includes the amount payable under section 3-B. (1-A ). . . . . . . . . (1-B ). . . . . . . . . (1-C) The amount of interest payable under sub-sections (1), (1-B) and (2) shall be without prejudice to any other liability or penalty that the dealer may incur under this Act or any other law for the time being in force, and shall be added to the amount of tax and be also deemed for all purposes to be part of the tax. " Section 22 : " 22. Rectification of mistakes.- (1) Any officer or authority or the Tribunal or the High Court may, on its own motion or on the application of the dealer or any other interested person rectify any mistake in any order passed by him or it under this Act apparent on the record within three years from the date of the order sought to be rectified : Provided that where an application under this sub-section has been made within such period of three years, it may be disposed of even beyond such period : Provided further. . . . . . . . . . . ";