Thursday, 14 June 2018

HC : 'Interest' recoverable under VAT law on belated installment payment under sales-tax deferment scheme

HC dismisses assessee’s writ, upholds recovery of interest on belated payment of installments under sales tax deferment scheme u/s 25 of AP VAT Act, 2005 (Act) dealing with recovery of tax as an arrear of land revenue; Remarks that, “after indicating four different types of amounts, viz., (1) tax assessed; (2) penalty levied; (3) interest payable under the Act; and (4) amount of tax under the deferment scheme, the last part of Section 25 uses an omnibus expression, viz., the whole of the amount then remaining unpaid”, thus, rejects assessee’s plea that Section 25 cannot be invoked for recovery of interest due on installments; Explains that, tax deferment is granted by Government generally in terms of Section 69 of Act but manner in which eligibility period has to be fixed, method of debiting eligibility amount and question of repayment, are all left to rule making authorities u/s 69(3); Perusing Rule 24(5)(b) of AP VAT Rules, HC elucidates that, “Once the order granting the facility of deferred payment of tax becomes infructuous, the amount that remains unpaid automatically gets restored to the status of a tax”, consequently, Section 22(2) would come into play which indicates that liability to pay interest is not just correlated to tax assessed or penalty levied, but has a correlation even to 'any other amount due' which would include “arrears or installments payable under a deferment scheme”; Further finds no illegality in the order of attachment, states that, “To have an attachment on the property which is already under mortgage to the Bank is completely different from the priority that Section 26E of the Securitization Act talks about” : Andhra Pradesh HC

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