FRICK INDIA LTD. AND ANR.versusSTATE OF HARYANA AND ORS.
- Citation
- 1994 INSC 210
- Decided
- 13 May 1994
- Disposal
- Case Allowed
- Bench
- M N VENKATACHALIAH
Holding
The interest levied under the Haryana General Sales Tax Act and the Central Sales Tax Act must be refunded with interest at 12% per annum from the date of actual recovery till refund.
Summary
Frick India Ltd. and another challenged the levy of interest on purchase tax under the Haryana General Sales Tax Act, 1973 (and the Central Sales Tax Act, 1956) through a writ petition under Article 32 of the Constitution. The petitioners argued that the interest collected was unlawful and should be refunded. The Court examined the provisions of the Haryana Act, particularly sections 6 and 25(5), and relied on the precedent set in J.K. Synthetics Ltd. v. Commercial Taxes Officer (1994) where similar provisions under the Rajasthan Sales Tax Act were held to be analogous. It held that the interest levied must be refunded to the petitioners with interest at a rate of 12% per annum from the date of actual recovery until the refund is made. Consequently, the petition was allowed, directing the refund within three months and ordering no costs, with the case disposed.
Issues considered
- Whether the levy of interest on purchase tax under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956 is valid.
- Whether interest collected on such tax must be refunded and, if so, at what rate.
Legislation cited
Subjects
Judgment
A FRICK INDIA LTD. AND ANR.
v.
STATE OF HARYANA AND ORS.
MAY 13, 1994
B [M.N. VENKATACHALIAH,.CJ., A.M. AHMADI, J.S. VERMA,
G.N. RAY AND S.P. BHARUCHA, JJ.]
Haryana General Sales Tax Act, 1973/Central .Sales Tax Act, 1956 :
Section 6,25(5}-Notice dated 12.2.1986-Purchase tcw-Levy of interest on
C additional amount found due-Held: the amount of interest collected from ·
assessees to be refunded with interest at 12% per annum.
The petitioners filed the writ petitions challenging· the levy of
interest on the purchase tax under the Haryana General .Sales Tax Act,
1973.
D
Allowing the writ petition In view of the decision In J.K. Synthetics
case*, this Court.
HELD : The amount of Interest levied on collected from the
petitioners under the Haryana General Sales Tax Act, 1973 as well as the
E Central Sales Tax Act, 1956 shall be refunded to the petitioners with
Interest at 12% per annum from the date of actual recovery till refund.
[135-B·CJ
*J.K Synthetics Ltd. v. The Commercial Taxes Officer, [1994) 4 SCC
277, applied.
F
CIVIL ORIGINAL JURISDICTION : Writ petition (C) No. 1235 of
1986. .
Under Article 32 of the Constitution of India.
G Harish N. Salve Ashok Sen, Ravider Narain, Ms.·Amrita Mitra, D.N.
Misra, for JBD & Co., Ms. Meenakshi Grover, Ms. Poonarn Madan,
Krishna Kumar, Bhaskar Raj Pradhan for Khaitan & Co., A.P. Dhamija,
S. Atreya, N.D.B. Raju, S.K. Jain, Ms. Nisha Bagchi, Ms Ayes~a Khatri,
Ms. Indu Malhotra, Ms. Kusum Chaudhary and Aruneshwar Gupta for the
H appearing parties. ·
134
FRICKINDIALTD. v. STATEOFHARYANA[AHMADl,l.] 135
The Judgment of the Court was delivered by A
AHMADI, J. In view of the decision rendered by the Constitution
Benchin/.K Synthetics Ltd v. The Commercial Taxes Officer(CivilAppeal
Nos. 3414-16/82, decided on May 9, 1994), since the relevant provisions of
the Haryana General Sales Tax Act are analogous to those of the Rajasthan
Sales Tax Act, this plllitiqn must also succeed. We, therefore, allow this B
petition and direct that the amount of interest levied and collected from
the petitioners under the Haryana General Sales Tax Act as well as the
Central Sales Tax Act shall be refunded to the petitioners within three
months from today with interest at 12% per annum from the date of actual
recovery till refund. There will, however, be no order as to costs in the facts C
and circumstances of the case. CMP will also stand disposed of.
R.P. Petition allowed.
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