- (1.) This order will dispose of two CWP Nos. 6416 and 9988 of 2005, as common questions of law and facts are involved therein. However, the facts have been extracted from CWP No. 6416 of 2005. Challenge in the present petition is to the orders dated 30.9.2004 (Annexure P-2) passed by the Assistant Excise and Taxation Commissioner and order dated 15.2.2005 (Annexure P-4), passed by Sales Tax Tribunal (for short, 'the Tribunal'). Challenge is limited to charging of interest on the amount of tax assessed.
(2.) Learned counsel for the petitioner submitted that the petitioner was working as Franchisee of a soft drink known as 'Frooti'. Upto 25.1.2000, the rate of tax on sale thereof was 8%. The rates were provided in terms of notification under Section 5(1) of the Punjab General Sales Tax Act, 1948 (for short, 'the Act'). By issuing Ordinance dated 25.1.2000, the rates of tax were amended. The product, in which the petitioner was dealing, was not specifically mentioned, hence, it fell in residual category, where rate of tax was 12%. The change was neither noticed by the petitioner nor its counsel and the tax was continued to be charged @ 8% from the buyers and deposited accordingly. The assessment of the petitioner was framed vide order dated 26.8.2003 accepting the rate of tax @ 8%. The revisional proceedings were initiated against the petitioner on audit objection regarding rate of tax. Vide impugned order dated 30.9.2004, the Revisional Authority assessed the differential amount of tax and also levied interest for the intervening period. As there was no dispute about the demand raised on account of differential rate of tax, the amount was deposited by the petitioner, however, demand of interest was challenged before the Tribunal, who vide order dated 15.2.2005, dismissed the appeal. Referring to the judgment of Hon'ble Supreme Court in J. K. Synthetics Limited vs Commercial Taxes Officer, 1994 4 SCC 276 , which was followed in Paul Motor Store vs State of Punjab, 2007 10 VST 259 (P&H), it was submitted that as the amount of tax demanded was paid within the time permitted, there was no question of charging of interest, as the amount of tax found to be due was required to be paid at that time. He further referred to an earlier order passed by the Sales Tax Tribunal-I, Punjab, in Fazilka Gas Service, Fazilka vs State of Punjab,2004 24 PHT 265 , where demand of interest under similar circumstances was set aside by the Tribunal but the decision was not followed in the case in hand.
(3.) On the other hand, learned counsel for the State, while not disputing the judgments referred to by counsel for the petitioner, submitted that once it is established that the amount of tax as was due in terms of the provisions of the Act and the notification issued thereunder had not been paid along with the returns, there is nothing wrong in raising the demand of interest for its delayed payment. She could not dispute the fact that even the assessing authority had committed error in accepting the returns and framing assessment while charging rate of tax at 8% for part of the year as against 12%. Heard learned counsel for the parties and perused the paper book.;