ASSOCIATED CEMENT CO. LTD. versus COMMERCIAL TAX OFFICER, KOTA & ORS.

ASSOCIATED CEMENT CO. LTD. versus COMMERCIAL TAX OFFICER, KOTA & ORS.

Penalty imposed for not including freight charges in taxable turnover and for not depositing tax in respect of such freight charges at the time of filing original returns is unsustainable and must be set aside. However, interest on the tax withheld in respect of freight charges is payable under section 11B of the Rajasthan Sales Tax Act, even if the liability was established by a subsequent judgment.

Parties
Appellant Assessee: Associated Cement Co. Ltd.; Respondents State Authorities: Commercial Tax Officer, Kota & Ors.
Jurisdiction
India
Judgment Date
02 September 1981
Procedural Posture
Civil Appeal / Supreme Court Judgment
Outcome
Appeal allowed in part.
Legal Topics
Sales Tax, Penalty, Interest, Rajasthan Sales Tax Act, Central Sales Tax Act
Taxation Law Sales Tax Penalty Interest Rajasthan Sales Tax Act Central Sales Tax Act

Case Brief

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Parties

Associated Cement Co. Ltd.

Appellant Assessee

Commercial Tax Officer, Kota & Ors.

Respondents State Authorities

Procedural Posture

Civil Appeal / Supreme Court Judgment

Legal Issues

  1. 1 Whether the Assessing Authority was competent to impose penalty for not depositing sales tax in respect of freight charges at the time of filing original returns under the State and Central Acts.
  2. 2 Whether the assessee was liable to pay interest on the tax due in respect of freight charges for the period between filing the original return and actual payment with the revised return.

Ratio Decidendi

Penalty imposed for not including freight charges in taxable turnover and for not depositing tax in respect of such freight charges at the time of filing original returns is unsustainable and must be set aside. However, interest on the tax withheld in respect of freight charges is payable under section 11B of the Rajasthan Sales Tax Act, even if the liability was established by a subsequent judgment.

Court Disposition

Appeal allowed in part.

Orders

  • Penalties imposed on the assessee under the impugned orders of assessment are set aside.
  • The appeal, so far as the levy of interest, is concerned, is dismissed.