Commissioner, Trade Tax vs Indian Communication Network Ltd.

M.C. Agarwal, J.—These two revision petitions by the Commissioner of Trade Tax u/s 11 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as "the Act") are directed against a common order dated November 17, 1994, passed by the Trade Tax Tribunal, Ghaziabad, whereby it held that no interest was payable on the demand of additional tax through an order u/s 22 of the Act. The matter relates to assessment years 1989-90 and 1988-89.

I have heard Sri U.K. Pandey, learned Standing Counsel for the revisionist.

The dealer-respondent''s assessments were framed under the Central Sales Tax Act, 1956. Thereafter by orders u/s 22 of the Act the assessment was rectified and additional tax in terms of Section 3-E of the Act read with the concerned provisions of the Central Sales Tax Act was levied raising the rate of tax from 12 to 13.2 per cent. On the additional tax thus levied the assessing officer charged interest u/s 8(1) of the Act. The dealer''s first appeals were dismissed. On second appeal (Nos. 449 and 450 of 1994) the Tribunal took the view that since there was a bona fide dispute about the levy of the additional tax no interest u/s 8(1) can be charged.

Admittedly the liability for additional tax was not admitted at any stage of the proceedings. Initially even the assessing officer did not think that any additional tax was leviable. It was subsequently that he thought of the same and initiated proceedings u/s 22 of the Act for the rectification of the assessment and levied the tax. u/s 8(1) of the Act interest is payable only on the tax that was admittedly payable by the dealer. The amount of additional tax levied through orders u/s 22 of the Act was not tax admittedly payable and, therefore, the Tribunal was right in holding that no interest can be charged in respect of these amounts. The Tribunal''s orders are thus in accordance with law and these revision petitions have no merit. They are accordingly dismissed.