IMPORTANT POINT
Once it is held the tax is payable under the Act it becomes payable along with interest from the date it became due.

Judgment

Dr. Mukundakam Sharma, J.

1. Leave granted.

2. The present appeal arises out of the judgment dated 10.12.2007 passed by the learned Single Judge of the High Court of Allahabad (Lucknow Bench) whereby the learned Single Judge has dismissed the tax revision filed by the Appellant under section 11 of the U. P. Trade Tax Act (hereinafter referred to as "the Act") impugning the judgment dated 14.8.2007 passed by the Trade Tax Tribunal, Lucknow rejecting the second appeal of the appellant/assessee.

3. Various issues were raised before the Tribunal as well as the High Court with respect to the liability of the appellant/assessee to pay tax which, in nutshell, are as follows: -

(i) That there is no transfer of rights of users by the assessee when he realized rental charges for glass bottles and crates.

(ii) The forums did not consider the terms of the agreement/contract between the assessee and his selling agents/consumers.

(iii) The interest charge on the tax could not have been charged under Section 8(1) as the case falls under Section 8(1B).

4. However, in the present appeal the issues Nos. (i) and (ii) were dropped by the appellant as, in the intervening period, the above said two issues were finally settled by the judgment of this court in the case of State of Orissa and another v. Asiatic Gases Ltd. (2007) 5 SCC 766. In the said case this court held that the previous decision of this Court in Aggarwal Bros. v. State of Haryana (1999) 9 SCC 182, is fully applicable to rentals charged in respect of the containers for goods that cannot be sold without containers. This court held that the containers constitute an integral part of the commodities in question and the container together with the contents therein is a "composite personality" and constitutes "goods" eligible to sales tax.

5. Accordingly, the only issue which requires consideration in the present appeal is whether the appellant is liable to pay interest on the tax due under Section 8 (1) of the Act i.e. @ 2 % per mensem from the date the tax was due or under Section 8 (1B) i.e. @ 1.5 % per mensum from the date of the assessment order and demand notice.

6. The High Court and the other forums below, for the reasons mentioned therein, have held that the appellant is liable to pay interest on the delayed payment of tax under section 8 (1) of the Act (i.e. @ 2 % per mensem from the date of filing of returns). Whereas, it is the appellants case that the interest is payable as per section 8 (1B) of the Act (i.e. @ 1.5 % per mensum from the expiration of the date mentioned in the assessment order which in the present case is March 15, 2002).

7. As a short question is involved we need not mention the facts of the case in great detail. In brief the facts leading to the filing of the present appeal are that the appellant is engaged in the manufacturing and selling of the beverages and is having bottling plants in the state of Uttar Pradesh. The dispute pertains to the trade tax payable on its turnover of Rupees 8.54 crores in respect of rentals by distributors of glass bottles and crates for assessment year 1999-2000. The appellant disputed the liability to pay tax on such turnover as well as the interest, as according to them no tax is payable on the rental of glass bottles and crates as the same did not amount to a transfer of right to use the goods for value or consideration under section 3-F of the Act. However, the said submission was negated by the first and second appellate authority as well as, on revision, by the High Court. As mentioned hereinabove, the challenge to the liability to pay tax was dropped by the appellant in the light of the judgment passed by this Hon'ble court in Asiatic Gases Ltd. case (supra).

8. We heard the learned counsel appearing for both the parties and perused the record. It was submitted by the learned senior counsel appearing for the Appellant that as it was the bonafide belief of the appellant/assessee that they were not liable to