Judgment

KHANNA, J.:- This appeal on certificate is against the judgment of Allahabad High Court whereby the High Court accepted petition under Article 226 of the Constitution of India filed by the respondent and quashed the recovery proceedings initiated by the appellant.

2. The respondent-firm was assessed to sales tax under the U. P. Sales Tax Act, 1948 (hereinafter referred to as the Act) for the assessment year 1958-59. The respondent went up in appeal and the tax demand was reduced in appeal. On revision filed by the respondent the total demand of sales tax was further reduced. The respondent made various payments towards the amount of tax found due from him. The sales tax authorities initiated proceedings for recovering the balance of the tax and realising interest at the rate of 18 per cent from February 1, 1964 on part of the tax demand. These recovery proceedings were challenged by the respondent by means of writ petition on the ground that a fresh notice of demand should have been issued to him in respect of the amount as reduced in appeal and revision. Unless that was done, the respondent could not be treated as a defaulter. The liability for payment of interest of the respondent was also questioned. The High Court accepted the first contention and quashed the recovery proceedings.

3. We have heard Mr. Manchanda on behalf of the appellant. No one appeared on behalf of the respondent. Mr. Ramamurthi, however, argued the case amicus curiae. After giving the matter our consideration, we are of the opinion that the judgment under appeal cannot be sustained.

4. Two questions arise for determination in this appeal. The first question is whether the respondent is liable to pay interest on the amount due from him as sales tax. The answer to this question, in our opinion, should be in the affirmative in view of the provisions of sub-section (1-A) of Section 8 of the Act. The aforesaid sub-section as also sub-sections (1) and (8) of that section read as under:

"8. Payment and recovery of tax.- (1) The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, not being less than fifteen days from the date of service of the notice of assessment and demand as may be specified in the notice. In default of such payment, the whole of the amount then remaining due shall become recoverable in accordance with sub-section (8).

(1-A) If the tax payable under sub-section (1) remains unpaid for six months after the expiry of the time specified in the notice of assessment and demand or the commencement of the Uttar Pradesh Bikri-Kar (Dwitiya Sanshodhan) Adhiniyam, 1963, whichever is later, then, without prejudice to any other liability or penalty which the defaulter may, in consequence of such non-payment, incur under this Act, simple interest at the rate of eighteen per cent per annum shall run on the amount then remaining due from the date of expiry of the time specified in the said notice, or from the commencement of the said Adhiniyam, as the case may be, and shall be added to the amount of tax and be deemed for all purposes to be part of the tax:

Provided that where as a result of appeal, revision or reference, or of any other order of a competent court or authority, the amount of tax is varied, the interest shall be recalculated accordingly.

Provided further that the interest on the excess amount of tax payable under an order of enhancement shall run from the date of such order if such excess remains unpaid for six months after the order ..... .....

(8) Any tax or other dues payable to the State Government under this Act, or any amount of money which a person is required to pay to the assessing authority under sub-section (3) or for which he is personally liable to the assessing authority under sub-section (6) shall be recoverable as arrears of land revenue."

This Court considered the above provisions in the case of Haji Lal Mohd. Biri Works v. State of U. P., 32 STC 496 and held that th