J.K. SYNTHETICS LTD. versus THE COMMERCIAL TAXES OFFICER

Citation: [1994] 3 S.C.R. 964 · Decided: 09-05-1994 · Supreme Court of India · Bench: M.N. VENKATACHALIAH

Cited by 3 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

A 
J.K. SYNTHETICS LTD. 
v. 
THE COMMERCIAL TAXES OFFICER 
"'-
MAY 9, 1994 
B 
[M.N. VENKATACHALIAH, C..L, A.M. AHMADI, .J.S. VERMA, 
c 
G.N. RAY AND S.P. BHARUCHA, JJ.j 
Rajasthan Sales Tax Act, 1954. 
Sections 7(2), 7(2A), J JB-77ie appellant paid the whole amount of 
Sales Tax 011 returns filed on the premise that freight charged did not Jami 
part of the p1ic&-The revenue contended otherwise--Sales tax liability ul-
timately worked ow by adding freight to p1ic&-Differencc on tax liability 
ivorked out-Whether interest on the dijJ'erence liable to be recovered? 
D 
The appellant challenged before the Commercial Taxes Officer the 
.E 
F 
.levy of interest on tax on the amount of freight charged in respect of sale 
of cement. The Commercial Taxes officer held that the appellant was 
required to pay interest on the additional sales tax which had to be paid 
on the inclusion of the freight amount in calculating the sale price. 
Aggrieved by the judgment of the Commercial Taxes Officer, the appellant 
preferred the present appeal. 
On behalf of the appellant it was contended that interest under 
Section 11-B of the Rajaothan Sales Tax Act, 1954 can only be charged 
subsequent to the determination of Sales Tax under the final assessment; 
that its case related to differential tax under Section i (2A) and not Section 
7(2); and that since the full amount of tax 'shown' in the return was 
deposited the question of payment of interest does not arise. 
On behalf of the respondent it was contended that interest becomes 
payable from the date on which the original return was filed under Section 
G 7(2) or 7(2A) of the Act; and that failure to deposit the tax due on final 
assessment would entail liability to pay interest under section 11-B of the 
Act. 
Allowing the appeal, this Court 
H 
HELD: 1. Section 11-B of the Rajasthan Sales Tax Act, 1954 nowhere 
964 
.! 
JK SYNTHETICS v. COMMERCIAL TAXES OFFICER [AHMADI. .I.I 965 
.... \ . ....,.. 
provided for payment of interest on the unpaid tax amount as found on 
A 
final assessment from the date of the filing of the return under Section 7 
) 
-· 
of the Act. If the amount of tax payable under Section 7 (2) or 7(2A) is paid 
there is no question of payment of interest under Section 11-B(a) or 
11-B(b). (972-B-C] 
2. So long as the assessee pays the tax which according to him is due 
on the basis of information supplied in the return filed by him, there would 
be no default on his part and it would be difficult to hold that the "tax 
payable" by him "is not paid" to visit him with the liability to pay interest 
under Sectionll-B of the Act. (981-G] 
3. It is difficult on the plain language of the section to hold that the 
law envisages the assessee to predicate the final assessment and expect 
him to pay the tax on that basis to avoid the liability to pay interest. That 
would be asking him to do the near impossible. [981-H, 982-A] 
B 
c 
Associated Cement Company v. C.T.O. & Ors., 48 STC 466, overruled D 
and State of Rajasthan v. V Ghasi Lal, 16 STC 318, relied on. 
CIVIL APPELLATE JURISDICTION : Civil appeals Nos. 3414-16 
of 1982 etc etc. 
From the Judgment and Order dated 5.11.81 of the Commercial tax E 
Officer, Special Circle Kola, in G.l.R. No. J-3 of 1977-78. 
Harish N. Salve, Ashok Sen, Ravinder Narain, Ms. Amrit Mitra D.N. 
Misra for JED & Co. Ms. Meenakshi Grover, Ms. Poonam Madan, Krishna 
Kumar, Bhasker Raj Pradan, for Khaitan & Co., AP. Dhjamija, S. Atreya, 
N.D.B. Raju, S.K. Jain, M. Nisha Bagchi, Ms. Ayesha Khatri, Ms. Indu 
Malhotra, Ms. Kusum Chaudhary and Aruneshwar Gupta for the appear-
ing parties. 
The Judgment of the Court was delivered by : 
F 
AHMADI, J. These appeals by special leave are directed against G 
certain assessment orders made by the Commercial Taxes Officer relating 
to the Assessment Years 1975-76, 1976-77 and 1977-78 under the Rajasthan 
Sales Tax Act, 1954 (hereinafter called 'the Act') and the Central Sales Tax 
,_..>-
Act, 1965 (hereinafter called 'the Central Act'). The ques•.ion relates to 
payment of interest on tax on the amount of freight charge:d in respect of H 
~ 
,' ' 
I 
966 
SUPREME COURT REPORTS 
[1994] 3 S.C.R. 
A 
sale of cement under the relevant Cement Control Order. The returns were 
.-., 
filed by the appellant on the promise that the amount of freight cliarged 
,_, 
in respect of sale of cement under the said Control Order did not form 
part of the sale price for the payment of sales tax. The appellant contends 
that

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