IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 11TH JANUARY 2008 / 21ST POUSHA 1929 OP.No. 26799 of 2001(E) ----------------------- PETITIONER: ------------ S.J. RAMESH, JAY KAY EXPORTERS, SRINGAPURAM, KODUNGALLUR. BY ADV. SMT.S.K.DEVI SRI.FRANKUR D.JAYAN RESPONDENTS: ------------- 1. THE SALESTAX OFFICER, DEPT. OF COMMERCIAL TAXES, KODUNGALLUR. 2. THE DEPUTY TAHSILDAR (RR), KODUNGALLUR. 3. STATE OF KERALA, REPRESENTED BY ITS FINANCE SECRETARY, SECRETARIAT, TRIVANDRUM. BY GOVERNMENT PLEADER SMT. SMITHA THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 11/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 ORDER ON CMP 43499 OF 2001 IN OP 26799 OF 2001 DISMISSED 11.1.2008 SD/-C.N.RAMACHANDRAN NAIR, JUDGE. APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF ORDER NO. 25172150/96-97 & 97-98 DATED 2.4.2001 ISSUED BY FIRST RESPONDENT. EXT.P2 TRUE COPY OF DEMAND NSOTICE NO. B1/10903/2001/ST DATED 20.8.01 ISSUED BY 2ND RESPONDENT. EXT.P3 TRUE COPY OF NOTICE NO. B1/`10903/01/ST DATED 20.8.01 ISSUED BY 2ND RESPONDENT. RESPONDENTS' EXHIBITS: NIL TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- O.P. NO. 26799 OF 2001 -------------------------------------------- Dated this the 11th day of January, 2008 JUDGMENT Petitioner is challenging Ext.P1 demand and Ext.P2 recovery notice demanding interest under Section 23(3) of the KGST Act for the years 1996-97 and 1997-98. It is not known why the petitioner did not pursue statutory remedy before the revisional authority against ext.P1 demand of interest. However, since O.P. is pending for the last six years, and the petitioner has contended that rate of tax is disputed in appeal,I proceed to dispose of the O.P. on merits. 2. Petitioner appears to have returned sales turnover of dates at 4% as against 10% due under the schedule to the Act. According to the petitioner, dates are of two types depending upon the moisture content, such as dry dates and wet dates. Dates generally contain limited moisture and come within the description of dry fruits. Therefore addition of wet dates along with entry for dry fruits with effect from 1.4.98 makes no difference. In other words, wet dates is also dry fruits which should have been assessed at 10% even prior to the introduction 2 of the same along with dry fruits. However, if petitioner claims that wet dates is not dry fruits then there is a controversy on the rate of tax and consequent liability for interest. In such case, interest cannot be demanded from the petitioner, from the date for payment of tax along with monthly returns because interest under Section 23(3) is payable for non-payment of tax at the rate declared by the petitioner, based on the classification adopted. However, if there is no bona fide in the claim for lower rate made in the returns, Officer can consider penalty under Section 45A. In the circumstances, O.P. is disposed of directing the first respondent to reconsider the matter after verifying the returns, assessment records and appellate orders. First respondent is directed to hear the petitioner and pass fresh orders within a period of one month from the date of receipt of a copy of this judgment. Exts. P1 and P2 will be kept in abeyance till orders are issued afresh. (C.N. RAMACHANDRAN NAIR) Judge kk 3