Case Law Details
Maruti Wire INDS. Pvt. Ltd. Vs S.T.O. IST Circle Mattancherry and Others (Supreme Court of India)
The case of Maruti Wire INDS. Pvt. Ltd. Vs Sales Tax Officer (S.T.O.) IST Circle Mattancherry and Others, adjudicated by the Supreme Court of India, centers on the interpretation of Section 23(3) of the Kerala General Sales Tax Act, 1963. The primary question was whether the appellant, an assessee, was liable to pay penal interest on the assessed tax from the date the return was due, despite not furnishing a return or paying tax on a self-assessment basis. This judgment delves into the nuances of penal interest liability under the Act and provides significant clarity on the legislative intent.
Background
In April 1983, Maruti Wire INDS. Pvt. Ltd., based in Patna, entered into an agreement with M/s. Tata Oil Mills Co. Ltd. to supply imported inedible tallow to their factory in Ernakulam. The tallow was imported through Cochin Port and delivered to the buyer. However, the appellant did not file a return for the turnover related to this transaction. The Sales Tax Officer finalized the assessment on October 10, 1984, and served a notice to the appellant on March 4, 1985, demanding sales tax, which was subsequently paid by the appellant.
Later, the appellant received two notices demanding Rs. 1,85,882.58 as penal interest under Section 23(3) of the Act for the period from May 20, 1983, to February 25, 1985. This demand was challenged by the appellant through a writ petition, which was initially allowed by a single judge but subsequently overturned by the High Court of Kerala. The appellant then appealed to the Supreme Court.
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