Importent Point:
Interest could not be charged on entire liability without giving credit for the amount realized during the period.

JUDGMENT:

S.B. Sinha, J.-- Leave granted.

2. Interpretation of G.O.(P) No.88/2000/TD dated 2.6.2000 providing for waiver of interest upto 75% on the defaulted amount of revenue due in terms of the Kerala Abkari Shops (Disposal in Auction) Rules, 1974 (the Rules) is the question involved herein.

3. First respondent was a licencee under the Abkari Act for the period 1.4.1993 to 31.3.1994. They conducted business for the period 1.4.1993 to 12.8.1993 only, as their licence was cancelled by an order dated 13.8.1993. There was a dispute between the parties in regard to the actual amount payable as excise duty for the said period. According to Revenue, an amount of Rs.86,40,000/- was payable. Respondent, admittedly, had paid an amount of Rs.40,18,934/-.

4. In terms of the Rules, upon cancellation of the licence, the shop in question came under the management of the department. It, during the period 31.8.1993 to 31.3.1994 The Department had collected a total sum of Rs.31,49,288/- towards Abkari dues. On the premise that the said amount should be adjusted from the total liability of the first respondent, a dispute arose between the parties herein as no credit was given in respect of the said amount of Rs.31,49,288/-. A writ petition was filed by the first respondent which was allowed by a judgment and order dated 11.8.2000 whereby and whereunder it was directed that the amount collected would be adjusted towards liability due from the appellant. The question, however, which arose for consideration was as to whether till the entire amount was adjusted, the first respondent was liable to pay any interest thereupon or not.

5. By reason of the Government Order dated 2.6.2000, the State of Kerala granted time to the defaulters to deposit the due amount of duty only with interest of 25%, wherefor Rule 25A was introduced in the Rule. 4. First respondent sought the benefit of the said Government Order which was denied to him on the premise that he had not complied with the conditions precedent therefor.

6. By reason of an order dated 14.12.2001, the representation of the respondents was rejected by the Excise Commissioner. They were directed to deposit an amount of Rs.83,26,344/- with future interest at the rate of 18% per annum on sum of Rs.41,16,841/- w.e.f. 8.12.2001. A Revenue Recovery Notice was issued for recovery of the said sum from the respondents on or about 4.4.2002. Aggrieved by and dissatisfied therewith, the respondents filed a writ petition before the High Court on 23.4.2002 questioning the validity of the said notice dated 4.4.2002.

7. By reason of a judgment and order dated 6.10.2005, a learned Single Judge allowed the said writ petition, directing :

"In view of the above, the Original Petition is disposed of directing the 1st respondent to grant amnesty benefits to the petitioners on the following terms and conditions :

(i) The Commissioner will work out the liability by reducing 75% of the interest payable upto 31.03.1997 being waiver available under the amnesty scheme and demand balance amount with 25% interest without charging further interest from 01.04.1997 to 31.8.2000.

(ii) Since petitioners have not made payment as on 31.08.2000 on account of pendency of the Original petition, petitioners will on this amount pay statutory rate of interest upto the date of payment i.e. from 01.09.2000 to the actual date of payment.

(iii) Petitioners are granted time till 31.12.2005 to clear the arrears with interest in two equal instalments, first of which will be paid on or before 30.11.2005 and the balance on or before 31.12.2005.

(iv) If payments are not made as above the benefit of amnesty scheme granted to the petitioners with modifications as above will stand forfeited and the respondents are free to proceed to recover the entire arrears.

(v) The Commissioner will give a statement as above within