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Judgment
Heard Sri Bharatji Agarwal, learned Counsel for the Petitioner, and learned Standing Counsel.
This writ petition has been filed for a writ of certiorari to quash the impugned recovery proceeding including recovery certificates which are Annexures 5,6 and 7 to the petition for the assessment years 1976-77 , 1977-78, and 1978-79 u/s 8 of the U.P. Sales Tax Act. It has also been prayed that a refund be granted to the Petitioner for these assessment years in respect of which it deposited the amounts on 3.8.1984. The further prayer is that the Respondent should not realise interest for the subsequent assessment years in respect of advance estimated tax deposited by the Petitioner in subsequent months.
The Petitioner is a public limited company which carries on the business of tea, coffee, etc. Under Rule 41 (1) of the U.P. Sales Tax Rules the Petitioner is required to furnish monthly returns. Rule 41 prescribed the period and manner in which returns are to be filed. The second proviso of Rule 41 which is relevant in this case reads as follows:
Provided further that the dealer may instead of submitting a return as aforesaid estimate his turnover for the year on the basis of the turnover admitted by him in his return, or disclosed in his account books, whichever is greater, for the immediately preceding year, Calculated the amount of tax payable thereon and deposit a sum equal to one-twelfth thereon during each of the first two months of every quarter, and deposit the balance of tax due on the turnover admitted by him in his return for the relevant quarter, quarter, which shall be prepared and submitted in the manner laid down in his rule.
By virtue of said proviso, instead of filing the return every month, a dealer can opt to file the return quarterly, but for this concession, he has to pay tax in the first two months of the quarter at the average of the tax on the turnover admitted by him in his return or as disclosed in his account books, whichever is greater, for the immediately preceding year and he has to deposit the tax during the month itself and cannot postpone till the end of the succeeding month.
The Petitioner opted for the procedure prescribed in the second proviso and instead of filing return month to month basis it filed quarterly return in which entire tax was deposited. For the first two months of each quarter the Petitioner had paid tax at 1/12th of the tax of the immediately preceding year. For the month of April 1/12 of the tax was to be paid in the month of May and for the month of May it was to be paid in the month of June. However, the Petitioner deposited the entire tax for the first quarter ending June along with the balance amount of tax with the quarterly return itself.
It has been stated in paragraph 7 of the writ petition that no objection was ever raised by the department at any time and not only the Petitioner but various dealers had been depositing the advance tax for the month of April in the month of May and similarly estimated advance tax for the month of May was being deposited in June every year In paragraph 8 of the petition it is stated that similar practice was followed by all the dealers of the State in U.P. and estimated advance tax in the first two months of every quarter was deposited in the next succeeding month and the department has always been accepting the same without any objection. However, the Respondent No. 2 issued notice dated 30.3.1984 for the assessment years in question under the U.P. Sales Tax for imposing of interest. True copies of these notices are Annexures 1, 2 and 3 to the petition. The Petitioner submitted a reply contending that it has no liability of tax in respect of advance estimated tax deposited by the Petitioner.. The Petitioner also referred to the regular practice of the department in this connection.
It is contended by the Petitioner that interest is payable u/s 8 on the tax which is admittedly payable as defined under the explanation of Section 8(1). The deposit of tax at 1/12* of the estimated advance tax does not fall under the category "tax admittedly payable" as defined in the explanation and hence no interest was payable by the Petitioner. True copy of the Petitioner''s reply is Annexure 4 to the petition. Thereafter the impugned recovery certificates were issued vide Annexures 5,6 and 7 of the writ petition.
In paragraph 18 of the petition it is stated that the Commissioner of Sales Tax issued a circular dated 1.4.1982 in which it is stated that the tax for the month of April should be deposited in the month of April itself and similarly 1/12th of the amount of tax for the month of May should be deposited in the month of May itself. True copy of the circular is Annexure 8 to the petition. Accordingly the Petitioner made deposits but the Petitioner wrote to Respondent No. 2 to withdraw the recovery certificate as the Petitioner was not liable to pay any interest. The Petitioner has contended that it was not liable to pay the interest and hence the amount deposited should be refunded with interest.
A counter affidavit has been filed and we have perused the same. In paragraph 5 of the same it is alleged that under Rule 41(1) the tax of April should be deposited in April itself and hence the contention of the Petitioner is not correct similarly in paragraph 8 it is stated that the interest becomes payable when the tax is deposited late. In paragraph 9 it is stated that since the Petitioner did not comply with Rule 41(1) hence interest has to be charged.
In our opinion the contention of the learned Counsel for the Petitioner is correct. Interest is payable u/s 8(1) on the tax which is admittedly payable as defined in the explanation to Section 8(1). The deposit of tax by the Petitioner at 1/12* of the estimated advance tax could not be regarded as tax admittedly payable. Since the tax admittedly payable is calculated on the turn over as disclosed monthly deposits merely represents 1/12th of the deposit on advance tax on the basis of the previous year''s liability. It is not the tax calculated on the turn over as per account books or the returns in fact no return is required to be filed in the first two months. Hence in the relevant years no interest could be charged. There is no doubt about the fact that the entire tax had been deposited along with the quarterly returns.
Learned Counsel for the Petitioner has relied on the decision of this Court in Agarwal Automobiles v. CST 1997 UPTC 843 and we fully agree with the view taken in the aforesaid decision.
Learned Standing Counsel submitted that against the impugned order the Petitioner has right of appeal and hence the petition should be dismissed on the ground of alternative remedy. We are not inclined to accept this argument because the writ petition was filed in the year 1984 and hence it would not be proper to dismiss the petition on the ground of alternative remedy after a lapse of 16 years. It is settled law that alternative remedy is not an absolute bar.
Learned Standing Counsel has submitted that in paragraph 6 of the judgment of this Court in Agarwal Automobiles Case (Supra) which has been relied upon by the learned Counsel for the Petitioner it has been stated that the Assessee has to deposit the tax during the month itself and cannot postpone it till the end of the succeeding month. Learned Counsel for the Petitioner does not dispute this proposition but it is not the admitted tax as contemplated u/s 8(1) of U.P. Trade Tax Act as no return are required to be filed for the first two months of the quarter when a dealer resorts to the second proviso of Rule 41. Hence the tax payable by him according to monthly average of the preceding year cannot be treated as the tax admittedly payable by the dealer.
In fact for this reason the contention of the learned Standing Counsel in Agarwal Automobiles case (supra) has been rejected in paragraph 11 of that decision.
For the reasons mentioned above the writ petition is allowed and the amount of interest deposited by the Petitioner is directed to be refunded for the assessment years 1976-77, 1977-78 and 1978-79 with interest at Rs. 12% from the date of deposit till the date of refund within 3 months of production of copy of this order before the assessing authority.