The term 'penalty' in section 13(2) of the Karnataka Sales Tax Act was construed as 'interest'. The court rejected the challenges to section 13(2) and section 13(2a) of the Act, stating that they did not suffer from the vice of excessive delegation and were not violative of article 14 of the Constitution.

( 1 ) ON a reference made by one of us (Puttaswamy, J.), this case was posted before us for disposal.

( 2 ) M/s. Sha Ghelabhai Devji and Company of Dharwad is a dealer and an assessee under the karnataka Sales Tax Act of 1957 (Karnataka Act 25 of 1957) ("the Act") on the file of the assistant Commissioner of Commercial Taxes (Assessment), Dharwad ("acct" ). For the period from 25th October, 1965, to 12th November, 1966, the ACCT by his rectification order made under section 25a of the Act on 1st March, 1969, held that the purchase turnover of Rs. 21,47,000 of the petitioner on cotton and groundnuts was exigible to a sum of Rs. 42,940 as purchase tax under the Act, the validity of which was challenged by him in Writ Petition No. 352 of 1975. On 30th July, 1975, Vrnkataramiah, J. (as His Lordship then was), rejected the same, which was challenged by it in Writ Appeal No. 555 of 1975. On 29th September, 1975, a division Bench of this Court admitted the said writ appeal and thereafter on 10th November, 1975, stayed the recovery on terms. On 9th June, 1978, a Division Bench of this Court dismissed the said writ appeal during which period the petitioner had the benefit of the said stay order.

( 3 ) ON the termination of the proceedings before this Court, the ACCT to show cause as to why proceedings should not be instituted against it for recovery of taxes outstanding and a penalty of rs. 36,713. 70 thereon that had accrued thereto on the same under the Act. On its failure to show cause or pay the amounts specified in the said notice, the ACCT on 23rd January, 1979 issued a garnishee notice (exhibit B), to Branch Manager of Vijaya Bank, Dharwad, under section 14 of the Act calling upon it to make payment of the amounts standing to the credit of the petitioner towards the taxes and penalty due by it to the State. In this petition under article 226 of the constitution presented on 15th February, 1979, the petitioner has challenged the validity of section 13 (2) of the Act, the show cause notice and the garnishee notice issued by the ACCT (exhibits A and B ).

( 4 ) THE petitioner has challenged section 13 (2) of the Act which provides for automatic levy of penalty ignoring the effect of the stay order made by this Court and without providing an opportunity of hearing, as violative of articles 14 and 19 (1) (f) of the Constitution. At the hearing, the petitioner also urged that section 13 (2a) of the Act confers arbitrary, unguided, uncanalised and uncontrolled power on the executive Government and was violative of article 14 of the constitution.

( 5 ) IN their return the respondents have urged that section 13 (2) of the Act which only provides for payment of automatic levy of interest on the outstanding amounts was not violative of articles 14 and 19 of the Constitution.

( 6 ) SRI K. Srinivasan, learned Advocate, appeared for the petitioner. Sri S. Rajendra Babu, learned government Advocate, has appeared for the respondents.

( 7 ) BOTH sides have relied on a large number of rulings in support of their respective cases. We will refer to them at the appropriate stages.

( 8 ) ON the pleadings and the contentions urged before us, the following points arise for determination and they are : (i) Whether section 13 (2) of the Act provides for payment of penalty or interest ? (ii) Whether section 13 (2) of the Act was violative of articles 14 and 19 (1) (f) of the Constitution ? (iii) Whether section 13 (2a) of the Act suffers from the vice of excessive delegation and was violative of article 14 of the Constitution ? (iv) If section 13 (2a) of the Act was invalid, whether that invalidity by itself invalidates section 13 (2) of the Act, on the grounds that it was not severable from the latter ? we will examine these points in their order. Re : Point No. I sri Srinivasan has urged that the plain language of section 13 (2) of the Act does not permit this court to construe the same as providing for automatic levy of interest a