Case Law Details
Indodan Industries Ltd. Vs State of U.P. & Ors. (Supreme Court of India)
In a significant ruling, the Supreme Court of India addressed the issue of retrospective application of interest levies under the Central Sales Tax Act, 1956, in the case of Indodan Industries Ltd. Vs State of U.P. & Ors. This landmark judgment has far-reaching implications for businesses and the interpretation of tax laws. This article delves into the details of the case, the court’s reasoning, and the implications of the decision.
The crux of the case revolved around the applicability of sub-Section (2B) of Section 9 of the Central Sales Tax Act, 1956, which was introduced by the Finance Act of 2000. This provision mandated that interest on delayed tax payments would be treated similarly to other tax dues, with all related provisions of state sales tax laws applicable.
Prior to 12th May 2000, the Central Sales Tax Act, 1956, did not have provisions for the levy of interest on delayed tax payments. This changed with the Finance Act of 2000, which introduced sub-Section (2B) to Section 9. The question before the Supreme Court was whether this provision should apply retrospectively, covering assessment years prior to 2000.
In the lead matter, Shivalik Cellulose Limited Vs. State of Uttar Pradesh & Ors., the assessment years in question were 1979-80, 1980-81, and 1981-82. Despite paying the taxes and penalties, there was a significant delay in payment, prompting the issue of whether the newly introduced interest provision should apply retrospectively.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
