Tirath S. Thakur, J.

1. IN this batch of writ petitions, the petitioners call in question the constitutional validity of sections 234A, 234B and 234C of the INcome-tax Act, 1961, inserted by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1989.

2. BRIEFLY stated, section 234A makes a provision for the payment of simple interest calculated at the rate of 24 per cent. per annum by an assessee, who commits default in furnishing a return of income under section 139(1) or section 139(4) or in response to a notice sent to him under section 142(1) of the Act. The amount at which such interest is payable and the period for which the same is payable is set out in the provision itself, reference whereto shall be made in detail a little later.

Section 234B of the Act, on the other hand, provides for payment of interest by an assessee, who even though liable to pay advance tax under section 208 of the Act, has either failed to pay such tax or the advance tax paid under section 210 of the Act is less than 90 per cent. of the tax assessed against him. The rate of interest prescribed is 24 per cent. per annum simple on the amount and for the period set out in the provision, to which details I shall turn presently.

3. SECTION 234C, however, regulates the payment of interest at the rate of 18 per cent. per annum simple in case an assessee liable to pay advance tax under section 208 of the Act, either fails to pay such tax or pays the same so as to be less than 30 per cent. by the 15th of September, or 60 per cent. by the 15th of December of the tax due on the returned income. The amount and the period for which such interest is made payable by this provision has also been set out in the section itself.

4. THE challenge thrown to these provisions is almost entirely based on the plea, that each one of these sections, if not wholly, it least partially carries with it an element of penalty; which an assessee is made to suffer, without affording him an opportunity of being heard and in particular without giving him a chance to prove that the default for which he is being penalised by the imposition of a heavy interest liability was not deliberate or was for reasons beyond the control of the assessee concerned. THE petitioners contend that once it was accepted that the provisions were penal in character, it would follow as a corollary that the assessees would be entitled to be heard before they could be punished under the same and that inasmuch as such an opportunity was denied by the impugned provisions, they would be liable to be struck down as ultra vires or at least read down to make an opportunity of being heard implicit in them if the same were to be saved from the vice of unconstitutionality.

In the reply filed on behalf of the respondents, which has been adopted in all these petitions, it is contended that the impugned provisions are only compensatory in nature and no part thereof is penal in character so as to attract the doctrine of audi alteram partem to the process of application of the said provisions to individual cases. It is further contended that the provisions are constitutionally perfect and ought not to be interfered with.

5. I have heard learned counsel appearing for the petitioners in their respective cases and Mr. Dattu, learned standing counsel for the respondents, at length.

6. APPEARING for the petitioners, learned counsel strenuously urged that the provisions of sections 234A, 234B and 234C of the Act are not wholly compensatory though some part of the interest liability levied upon the assessees in default was certainly compensatory in nature. They urged that the impugned provisions had replaced the earlier provisions of the Act, providing for the payment of interest and penalty both, and were therefore an amalgam of both those elements. It was further contended that the provisions were penal in nature not only because of the rate of interest levied thereunder, but also because of the period for