Sanjib Banerjee, J.
The petitioner has challenged an order of October 29, 2015 by which the petitioner’s application under the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 filed on August 31, 2015 has been dismissed upon the petitioner failure to pay an amount of interest of Rs. 59,84,917/-.
2. An assessment order was made in respect of the petitioner for the four quarters ended March 31, 2010 under the West Bengal Sales Tax Act, 1994. Such order noticed that a total payment of Rs. 4,91,67,817/- had been made by the petitioner against a total assessed amount of Rs. 4,94,09,477/-. The assessment order provided for a penalty of Rs. 1,50,000/- and an interest component of Rs. 59,84,917/-. A detailed calculation on account of the interest was indicated in the assessment order. The calculation showed the quantum of interest payable over the four quarters at varying rates. It is evident that the net amount due from the petitioner on account of sales tax was assessed and the amount actually paid by the petitioner was seen, to arrive at the short-fall on the relevant dates to calculate the quantum of interest payable over the four quarters by the petitioner. Thus, the calculation of the interest as evident from the relevant assessment order is on account of the delay in actual payment of tax by the petitioner and a small component thereof is the interest levied for the short payment of tax.
3. Over the entire financial year, the petitioner’s short payment of tax amounted to about Rs. 2.41 lakh. Thus, the total interest component of Rs. 59,84,917/- calculated in the relevant assessment order contained a substantial part on account of the delay in making payment of the tax and a nominal part on account of the additional levy of tax for which no payment had been tendered. It cannot be said by any stretch of imagination that the entirety of the interest of Rs. 59,84,917/- indicated in the relevant assessment order pertained to the additional levy of tax made thereunder.
4. After exhausting the remedy of appeal, the petitioner challenged the order of assessment in revision. Both the additional levy of tax and the quantum of interest awarded by the relevant assessment order were challenged in the appeal and in the revision.
5. During the pendency of the revision, on the basis of the amended provisions as to settlement in the said Act of 1999, the petitioner applied for settlement of the tax in dispute and the interest thereon by paying 55% of the tax in dispute. The amount of tax in dispute was Rs. 2,41,660/-. The petitioner now says that Section 7(1)(b) of the Act applies in this case. Such provision, in its material part, reads as follows:
'7. Rate applicable in determining the amount payable. - (1) The amount payable by an applicant for settlement of dispute under this Act shall be determined under sub-section (2) of section 6 - ………
(b) where the dispute relates to any arrear interest in dispute for non-payment of any arrear tax in dispute and an application has been made under this Act in respect of such arrear tax in dispute, by waiving the arrear interest in dispute.'
6. Thus, the interest component relatable to any arrear tax in dispute is liable to be waived under Section 7 of the Act of 1999. The words of clause (b) clearly stipulate that if a component of the tax is disputed, the interest relatable thereto would be regarded as 'arrear interest in dispute'. It is only such arrear interest in dispute 'in respect of … arrear tax in dispute' that may be waived.
7. In this case, the petitioner has deposited the additional levy of Rs. 2,41,660/- and has also questioned the imposition of the interest of Rs. 59,84,917/- in the revision. However, the amount of Rs. 59,84,917/- is not relatable to the additional levy of Rs. 2,41,660/-. The relevant order of assessment indicates how the figure of Rs. 59,84,917/- was arrived at by determining the dates when the sales tax ought to have been tendered and when the same was actually tendered. There is no doubt that a component of the interest is relatable to the additional demand of tax under the assessment order of Rs. 2,41,660/-, but that would be a very small part of the total amount of interest of Rs. 59,84,917/- and certainly not the entire amount.
8. The petitioner has referred to a judgment reported at (2011) 42 VST 44 where a Division Bench of this court held that a settlement officer was not competent to question the deposit made or not made by the assessee in connection with an appeal against the order of assessment. The judgment has no manner of application in the present case, though the petitioner has sought to refer to the previous direction recorded in the order impugned: of the petitioner being required to deposit the sum of Rs. 59,84,917/-. Such direction of the deposit of interest may have been erroneous, but that would not entitle the petitioner to seek waiver of the amount of Rs. 59,84,917/- demanded on account of interest by the impugned order of assessment under Section 7(1)(b) of the Act of 1999. The petitioner has also referred to an unreported order of the West Bengal Taxation Tribunal passed on May 17, 2011 in case RN - 582 - 2009. The provision that was considered in such case was completely different from the amended Section 7 as it stood in 2015.
9. Since it is evident that the interest component of Rs. 59,84,917/- demanded by the order of assessment is not relatable to the additional levy of tax challenged in the appeal and revision, the petitioner is not entitled to the waiver of the total amount of interest of Rs. 59,84,917/- under the settlement. However, the petitioner is certainly entitled to the waiver of the interest component which is relatable to the additional demand of tax of Rs. 2,41,660/- which was challenged in appeal and revision by the petitioner. Accordingly, the order impugned dated October 29, 2015 is set aside and the matter is remanded to the concerned settlement o
Please Login To View The Full Judgment!
fficer to calculate the amount of interest relatable to the additional demand of tax of Rs. 2,41,660/- by the order of assessment for waiver of such component and not the entirety of the interest amount of Rs. 59,84,917/-. 10. WP 3012(W) of 2016 succeeds to the limited extent as indicated above. Since the major plank of the petitioner’s case stands rejected, the petitioner will pay costs equivalent to half the amount which is waived by the settlement officer. Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance of the requisite formalities. Writ petition is party allowed.