As per Kerala General Sales Tax Act, 1963,( KGST Act)Section 23 refers to Payment and Recovery of Tax. Section 23(1) specifies time limit of 21 days for a notice time for payment. According to Section 21(2), the arrear or dues will be treated as if it were an arrear of land revenue.
Section 23(3) specifies the interest at of one % per month for the first 3 months and thereafter 2 % .
As per finance Act 8 of 2000, a new section Section 55 had been incorporated in KGST Act.
"Appropriation of payment". Where any tax or any other amount due or demanded under the Act, is paid by any dealer or other person the payment so made shall be appropriated first towards interest accured on such tax or other amount under sub section 3 of Section 23 on such date of payment and the balance available shall be appropriated towards principle outstanding not withstanding any request to the contrary by the dealer or any person making such person. "
Notwithstanding anything contained in subsection 1 where any dealer or other person has paid any amount towards tax or any other amount and such payment has been set-off towards the principle amount prior to the coming into effect of this Section, no re-computation or such payment shall be made under subseciton 1.".
In short if you have paid the amount after the year 2000, and if no written request is there, the Department view is correct.
Rema.
