The High Court · 2025

*"" Counsel forthe Respondents: SRI DANTU SRINIVAS ( SPL SC FOR CT) The Court made the following: ORDER THE IT()]\'f]LE, SRT JT]STICE T. VINOD KTIM{II. And .IHI' H0\I'BLE SMT. JUSTICE P.SREE STII)H,IT \\'RI1'PETITION No.16153 of 2006 ORDI'-R: t/'. t. ,lt' .\t iJrttritL.[.t.inltl Kum,tr) Ilearcr le rrnccl counsel for the petitioner und l:atncd Special Stanrlin:. ( ounsel lbr Commercial 'l'axes appeiil. ltr on behalf of r.:s1:on l.:nts, and perused the record

2. 'I'he c:r:rt, o thc petitioner in brief is that it was asstl: se I to tax bv the '' r-t, .porrdent for the assessment year 20() l-02 uL deL thc Andhra l) ac.,.h Gcner.al Sales Tax Act, 1951 ( lil. shorr_ the Act') virlc r\.;sc,,:;rren[ Ordcr- datcd l0-03-2005 detennini -ig thc tax payable ir. u,rrnr of Rs.96,l5,08,1 10/- and after giving i:r:dit to [hc tax pai,1 I r rl.re petitioner in a sum ol Rs.94,90.g].-l5li_, had issucd c'cLr .rnti noticc in fbLm B-3 fbr balance t.tr of Rs.1,2,1,24..25 i, -

3. It is thc 1lr1 r:r. case of the petitioner that since thc alb .eseid order olassi:sr.;nt,,nt did not give cr.edit to the amounLs of ta i 1:eid b), tl',. 0.,',',,,rer r,n I 8-07-2002 in a sum ol Rs.g9,7j.5g5, _, :he l " responder rt ar . rority exercising power under. Rule 50 rrl- he AP(}S]' Rules hl rl issued rectiflcation of assessment ,rr.dcr cla ec1 2 07 -04-2005 giving credit to the afbresaid amounts paid resulting in reduction of balance tax payable in a sum of Rs.34,49,1721-.

4. It is the further case of the petitioner that on the 1't respondent authority issuing the rectification order reducing the balance tax demand, it was issued with proceedings dated 29-05-2006 levying interest in a sum of Rs.43,74,1021- for a period of 3 months 11 days @, 30% p.a. on the payment of Rs.89,75,585/- and intelest amounting to Rs.l,52,4741- and for 2 years 11 months @36% p.a. amounting to Rs.36,21,628/-. 5 Petitioner furlher contends that the 1't respondent adopted the rate of interest as prescribed under Section 16(3) of the Act that prevailed prior to 12-01-2005 cvcn though the said rate was substituted by Act No.2 of 2005 rvith unifbrrn rale of l2o/o per

6. Petitioner fufther contends that the Act was repealed and in its place Andhra Pradesh Value Added Tax Act (fbr shofi 'VAT Act') has come into force w.e.f. 0l-04-2005 and cven under the VAT Act, the rate of interest is specified as 1o/o per month under Section 22(2) of the VAT Act, which works out to l2%o p.a. and as such, the irnpugned order dated 29-05-2006 passed by the l. / ,/ ,/ 3 responclcnt u ithout jurisdiction and violative of pr.incirles ol'natual .jusr.ic ' 7 . Countel a1'"i lavit on behalf of 1 't respondent is liled

8. By the c,:ru :1!-r-al davit, it is contended that the Asse:;slrent period ir.l',ri ,,ei is 2001 -02 of the Act and rate 01- j rtr rcst prevalcnl al tlrc t levant point of time is prescribed under Scc-ion l6(3)(a) ol Lhc rrcl ranging l}om l8% p.a. to 360/o p.rL. irr the peliod of cle lrrv

9. B), thc c,.,,-r rrcr'-aflldavit, it is furtl-rer contended that t]re -ate of interest ri,lrs .rendcd as per Act 2 of 2005 to 129,o ll.rr rv e.t 12-01-200,i r(, 1 .0t-2005

10. It is tlt-tlrer rLlso contended that though, the proceeclirus fbr levv of inte- re- s t rc initiated in the year' 2006, the ratc of irrle:est applicablc iv,rul.l lre the rate as existing during the r.e lerant periocl i.c. 10 t) I ),2 brrt not the rate of interest as applica rle o11 the date on vylric rhc proceedings have been initiated

11. By the cou rer-afhdavit, it is further contendei thaL sir cc. the petitioncr ,racl made payment of Rs.g9,7.j.5g5, _ Iu-07-2001. the i,tcrest has been carcr-rlated onry fbr rJre peLiod 4 of delay in making payment after the end of the assessmcnt year 2001-02 viz., April to March

12. By the counter-affidavit, it is further contended that since, the petitioner did not make the balance paymcnt of 11s.34,49,1121-, the 1't respondent authority had levied interest at the maximum prescribed under Scction 16(3)(a) of the Act

13. By the counter-affidavit, it is furlher contended that since, the tax due relates to the period 2001-02, the petitioner cannot claim the interest @ 12% p.a. as introduced by Act 2 ol 2005 whicli would be applicable only in relation to tax dues for the period 12-01-2005 to 31-03-205 on which date the Act was rcpealed and in its place the VAT Act has been intloduced u'.e.l. 01-04-200s.

14. By the counter-affidavit, it is furlher contended that though, the petitioner had claimed that on cerlain amounts received by it, it is not liable to pay tax, inastnuch as the said order of assesslnent had not been assailed by the petitioner in appeal or in any other forum, the order of assessment had attained hnality, and thus, the interest levied on thc demand as plescribed in the 5 /.. I /7 //' assesslllelll- (,rd,- ' on net tax payable is in accordancc vr.itl the provisions ol' tl- .: A ct.

15. 81. the co rrter-affidavit, it is also contended that 'hcugh, the petitionc'r r:rrl claimed ol it not being given c:.eclil lbr pirvrnent,rt i.l\ ()n Ik.3,83,6,13/- inasmuch as the petitiote did not lirrnish r n1 letails of such pa),ment, the credit tbr t re said amount crrr,r Ld rrn1. be given by the authorities by c:ro'c sing power undel Rr L: 50 of the Rules

16. By Lh: cr )Lrnter-aflldavit, thc lespondents also rlcnl the contentiou ol t'.,: petitioner that it is entitled to interest or the advance trr: parr.l ol Rs.7.00 crores on 28-03 -2002, as ther e' s no such proi isii,n .nder the Act.

17. The r.',,'sr)o1 i(lL'nts by, stating as above, had contendccL 'l-r: t thc Icv1, s1 intele:. on the petitioner lbr the year 200I-0 l s 1ll accordauc.: r ' it the provision of Section 16(3)(a) o1- the A :t as in fbrce clurirrs hc assessment year 200i-02 1 8. Wc har',: t Ll.L'1r notc o1- r'espective contentions ulgecl 6

19. In order to appreciate the issue involved in the present Writ Petition, it is necessary to refer to the provisions of Section 13, 16(3)(a) of the Act r/w rule 17(1) ol the Rules.

20. Sectior.r 13 of the Act deals with subrnission of return ol tumover by dcaler.

21. Sectior.r l7(1) of the Rules deals with subrnission of rerum by every dealer in Form A-2 every month showing total and net tumover of the preceding month. The said Rule also prescribes that along with the return, the dealer shall submit a receipt frorn the Govemment Treasury or a crossed demand draft in favour of the assessing authority for the fu1l amount of tax or taxes payable fbr the month to wl-rich tl're rcturn relates to

22. Section l6 of the Act deals with payment of tax and other dues payable under the Act. Sub-Section (3) thereof states that if the tax assessed or penalty lcvied or anv other amount due under this Act (underlying supplied by Court) or any installment thereof is not paid by any dealer or other person witltin thc tin're specified thereof in the notice of demand, or in the older permitting the payment in installments or in any other provisions of the Act or the Rules made thereunder, the dealer or other F- l person, shull pi ., irr addition to the aurount of such tar, 1-e naltl', installrnent (,r n) other amount, iuterest calculated ltel ever)' onc hundlc,l rLli,res or parl thereof at the rates mentioncd b,)low for the pelioll r:1'dclay from the due date or date specitiec ft,r its pa]'ments

23. A rcadirrg rlSection l6(3)(a) of the Act, which u,as in lbrce during the vear' 10()i-02 if rcad along with Scction li o',he Act and Rule 1l't'l ' ol- the Rules rerluires tl-re petitionel tc rrake pavmenl o1 .he :ar on the dr-rc date specilicd fbr its |11r 11 lsn1, rvhich as pi:r [iiiie 17(l) of the I{ules is 20'r' of thc slr,:reeling month alorg u'irfr retum in Foltn A-2

24. Sincc. tlre .rr:< paid by the petitioner alor-rg with its i( tu l is less than it:. lr, bilit),, which it is requiled to discha gt by enclosing'J ri,15 1'-,. challan ol ct-osscd Demand Draft in 1r',rtrrr of the assessinr: : Lrthority, the petitioner would be liablc lo pav interest in term: o1- Section l6(3)(a) of the Act

25. Th clu glr o r belralf of the petitioner, it is contencled 1la the interest lat: tre .; :tibed under the albresaid Section har,inl lreen substituted b.,., 7,,1 12 of 2005 w.e.1112-01-2005, it is ro bt ntted tl-rat since t].r.l artrendment is to the Act, the same n,oull ,rnh, have prospective effect and cannot be given retrospective eff'ect by considering the same as procedural in nature.

26. Furlher, the claim ofthe petitioner of the assessing authoriry having made assessment only on l0-03-2005 and issr.ring notice of demand in Form B-3, the interest cannot be demanded tbr earlier period, as noted helein above, the liability to pay inrercst would arise if the tax due as per the retum is not paid before the due date specified for such paymcnt. Since, the petitioner as pcr the provisions of the Act, is required to pay taxes along rvitl-t returns before the 20tl' day of every succeeding month, the petitioner would be liable to pay interest on the delayed payments.

27. However, in the facts ol' thc present case, though, the petitioner had claimed certain cxemptions whioh wcre disallowed by the Assessing Authority while passing final assessment order dated l0-03-2005 resulting in additional demand being raised on the pctitioner on account of disallowance of cerlain claims rnade by the petitioner while filing return on'.its duc date, the petitioner cannot take advantage of making such claims and not pursue such claims on assessment / I 9 ordel beinr: ra.:ccl thereby resulting in the said or del a .r-a nir-rg ,,,,/ finality.

28. Thc cc,ns,r(lucnce ol the order of assessrnerrt Jit.arninq tinality uorLid ruLomatically rcsr-rlt in petitioner bcing lrab e to pav intele:;r. fbr ,vrong clairrs rnade by it rvhile 1il ing leturn in order to nrinLnr ;tclreduce its tax tiability for relevatrt nr.rrrth and to claim that tht rdditional payment of tax if any raise,cl rvould be paid on conrple,ior of assessntent. If the said plea urgeci br Lhc pctltronef a roetrted, in every case, a dealer uhile f ling nrontl'rly r\-2 t'e I r rrr.r would make rvrong clairns rvil hour ra ring any tax ol ot:,i. paying mininral tax thercby posqlorte thc payrnent o1't:Lx e gitirnately due to a later date i.e. cornple_ior ol assessnteltt lt',, p:,tsing an order

29. In viev,, of lte above, this Court is ol the consiclereil r ieri that the clrirn ', ' the petitioner of it not being liable .o pa1, interest till tLe :;sessrncnt order is passed or it beinq lir bl: tir pa1, interesL onl , aL the rate r.vhich is in force on thc cl:Ltt ol passing o1' asse r: rneut order or issuing notice of ilcnt:rrrcl fbr. pavment of iniet,:;t. is devoid ol r-r-reriL. I I I l i I I I I l ! I l : , t l 10

30. Thus, the Writ Petition as filed fails and it is accordingly disrnissed. No costs

31. As a sequel, miscellaneous pctitions pending if any shall stand closed //TRUE COPY// D/.T, TIRUMALA DEVI DEPUW REGIST SECTION OFFTCER To, 1 2 o One CC to SRl. S KRISHNA TUURTHY Advocate One CC to SRI DANTU SRINIVAS ( SPL SC FOR CT) [OPUC] PUC] Two CD CoPies KKS BS 6- i I I ) I HIGH COURT DATED:28105t2025 Vac;rtion court ii\r I f.,I (. 0 4 ,t,li 2m l-.. l:' _t\ i:j 1,, \ ,.-..., :.' \... \; ORDER WP.No.16153 of 2006 DISMISSING THE WRIT PETITION WITHOUT COSTS c-X coR\* r r) \cL (\e''*, !