IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 3RD JUNE 2009 / 13TH JYAISHTA 1931 ST.Rev..No. 212 of 2008() ------------------------- TA.33/2007 of S.T.A.TRIBUNAL,ADDL.BENCH,KZD. .................... REVISION PETITIONER --------------------------------------- STATE OF KERALA ,REP. BY JOINT COMMISSIONER (LAW) COMMERICIAL TAXES, ERNAKULAM BY G.P. SRI.MOHAMMED RAFIQ RESPONDENT(S): APPELLANT ------------------------ M/S.KANNUR SARVODAYA SANGH, THALASSERY. ADV. SRI.N.K.SANATH KUMAR FOR R1 THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 03/06/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & C.K.ABDUL REHIM, JJ. .................................................................... S.T. Rev. No.212 of 2008 .................................................................... Dated this the 3rd day of June, 2009. ORDER Ramachandran Nair, J. The question raised in the revision case is whether the Tribunal was justified in cancelling interest levied on the respondent for the assessment year 2000-2001. We have heard Government Pleader appearing for the petitioner and counsel for the respondent. 2. Respondent claimed exemption on sale of their products which was not maintainable. The irregular claim of exemption in the monthly returns led to non-payment of tax. However, later assessment was made declining exemption and respondent does not appear to be contesting the assessment demanding tax. However, claim of interest is challenged on the ground that officer did not issue demand notice and consequently there is no default. The Tribunal allowed the claim following the decision of the Supreme Court in MARUTI WIRE INDUSTRIES PRIVATE LIMITED V. SALES TAX OFFICER (122 STC 410). However, Government pleader pointed out that the decision 2 of the Supreme Court relied on by the Tribunal has no application in respondent's case because the decision is on the unamended provision. We find force in this contention because by amendment interest is made payable, if there is non-payment of tax in terms of statutory provision i.e. Rule 21(7) which requires payment of tax along with monthly returns. Further, Section 23(3A) was introduced with effect from 1.4.1998 for recovering interest for belated payment of tax i.e. the difference between tax demanded on assessment and the tax declared as due by the assessee. By virtue of the amendment particularly that introducing Section 23(3A), respondent was liable to pay interest for delayed payment of tax. However, counsel appearing for the respondent submitted that respondent is entitled to benefit of notification G.O. No.215/08/TD dated 7.11.2008. According to him, Government has waived tax liability including interest of Khadi industries. If respondent is entitled to benefit of notification, respondent is absolutely free to claim it before the officer. However, for the reason stated above, the Tribunal's order based on decision of the Supreme Court in cancelling the interest is not tenable as the 3 respondent is liable for payment of interest under Section 23(3A) of the KGST Act. We, therefore, allow the revision by vacating the order of the Tribunal and restoring the demand of interest with direction to the officer to consider respondent's claim of benefit under any notification. C.N.RAMACHANDRAN NAIR Judge C.K.ABDUL REHIM Judge pms