INDIA CARBON LTD. ETC. versus THE STATE OF ASSAM

Citation: [1997] SUPP. 3 S.C.R. 1 · Decided: 16-07-1997 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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INDIA CARBON LTD. ETC. 
A 
v. 
THE STATE OF ASSAM 
JULY 16, 1997 
[S.P. BHARUCHA AND M. JAGANNADHA RAO, JJ.) 
B 
Sales Tax: 
Central sales Tax Act, 1957-Section 9(2)/14-Assam Sales tax Act, 
1947-Section 35-A-lmposition of interest on delayed payments of Central C 
Sales Tax---lnter-state sales of Petroleum Coke-Subjected to Central sales 
tfil~Delay in payment of sales tfil~High Cowt held that appellant is liable 
to pay interest 011 delayed payment of sales tax-Held, no substantive 
provision in the Central Act requiling payment of interest-Assessee not liable 
to pay interest. 
The appellants were manufacturers and sellers of petroleum coke 
which were goods declared by section 14 of the Central Sales Tax Act, 1957. 
The appellants were liable to pay central sales tax on the petroleum coke 
that was subjected to inter-state sales. Due to delay in payment of sales tax, 
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the appellants were required to pay interest under section 35-A of the 
Assam Sales Tax Act, 1947. The appellants challenged the imposition of E 
interest by filing a writ petition in the High Court, on the ground that there 
being no mention of interest in the first part of section 9(2) of the Central 
Sales Act, they were not liable to pay interest. The High Court held that 
interest was payable by the appellants on account of delay in payment of 
central sales tax even though no specific provision had been made in the p 
Central Act in this regard. Hence the present appeal. 
Allowing the appeals, this Court 
HELD : 1.1. The requirement of the sales tax authorities that the 
appellants should pay interest on delayed payment of Central Sales Tax G 
under the provisions of Section 35(A) of the Assam Sales Tax Act 1947 is 
bad in law. (9-E-F] 
1.2. Section 9(2) of Central Sales Tax Act 1957 authorise the sale 
tax authorities of a State to assess, reassess, collect and enforce payment 
of the Central Sales Tax payable by a dealer as if it was payable under the H 
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SUPREME COURT REPORTS [1997] SUPP. 3 S.C.R. 
A State Act. The substantive law that the States; sales tax authorities must 
apply is the Central law. For procedural purposes alone the provisions of 
the State Act are available. [9·B·D] 
1.3. The provisions relating to interest in the latter part of section 
9(2) can be employed by the States' sales tax authority only if the Central 
B Act make susbstantive provision for the levy and charge of interest on 
Central Sales Tax and only to that extent. There is no substantive 
provision in the Central Act requiring the payment. of interest on Central 
Sales Tax. The State sales tax authorities therefore cannot charge interest 
on delayed payment of Central Sales Tax. The demands made for payment 
C of interest are quashed. [9-D-E; F] 
Khemka & Compa11y v. State of Maharashtra, [1975] 3 SCR 753, relied 
on. 
J.K. Sy11thetics Ltd. v. Commercial Tax Officer, [1994] 4 SCC 276 
D referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2156-67 
of 1993. 
From the Judgment and Order dated 15.9.89 of the Assam High 
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Court in C.R. Nos. 305-307/77, 505-509/80 and 391-394 of 1984. 
WITH 
Civil Appeal Nos. 2168-71/93, 7728/95, 7735/95, 7865/95, 9267/95. 
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R.F. Nariman, M.L. Lahoty, Ashok Saraf and Mrs. AK. Verma for 
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Mis. JBD & Co. for the Appellants. 
S.A. Syed for the Respondents. 
The Judgment of the Court was delivered by 
S.P. BHARUCHA, J. These appeals impugn a judgment and order 
of the High Court at Guwahati. It may be immediately stated that, there 
having been some difference of opinion between the two learned Judges 
who first heard the writ petitions filed by the appellants, four questions 
were referred to a third learned Judge and it is the first of those four 
H questions which will determine these appeals. 
INDIACARBONLTD. v. STATE[S.P.BHARUCHA,J.] 
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Briefly stated for the purposes of this judgment, the facts are these: A 
The appellants manufacture and sell petroleum coke, which are goods 
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declared by Section 14 of the Central Sales Tax Act. The appellants are 
registered as dealers under the Central Act and liable to pay central sales 
tax on the petroleum coke that is the subject of inter-State Sales. The 
payments of Central sales tax on inter-State sales of petroleum coke were B 
delayed. For the assessment years 1974 to 1980 the appellants were re-
quired by the respondents to pay interest at the rate of 24% per annum 
thereon, in purported exercise of the provisions of Section 35A of the 
Assam Sales 

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