Interest can be charged on delayed payment of sales tax without serving a prior demand notice.

1 The petitioners in all these petitions are dealers duly registered under the Jammu & Kashmir General Sales Tax Act, 1962, hereinafter to be referred to as tae Act, who have been called upon the pay either interest on the amount of sales tax already deposited by them, or to pay the amount of sales tax that is still due from them along with interest chargeable on it in terms of Sec.8 of the Act. For a better understanding of the controversy raised in these petitions, the petitioners assesses may be conveniently placed in four categories, viz., (i) an assesses who has neither filed the return of his turn-over, nor deposited the sales tax due on it, and the Assessing Authority has determined the amount of tax payable by him and issued a composite demand notice asking him to deposit the amount of tax along with interest due on it; (ii) an assesses who has filed the return of his turn over but has not deposited the sales tax due on it; and the Assessing Authority having accepted his return, has issued a composite demand notice, asking him to pay the amount of tax along with interest due on it; (ii an assesses who has not only filed the return of his turn-over, but has deposited the sales tax due on it. but after filing of the return and not along with it and the Assessing Authority having accepted his return has issued a demand notice asking him to pay the interest chargeable on the said amount for the period for which the deposit of the sales tax has been delayed; and (iv) an assesses who has filed the return of his turn-over and has at the same time deposited the sales tax due on it, but the Assessing Authority has not accepted his return arid has enhanced the amount of tax payable by him, and issued a composite notice to him demanding the payment of the excess amount of the tax along with interest due on it. The petitioners have challenged the right of the respondents to recover interest from them on the grounds: firstly, that Sec. 8 of the Act under which interest is sought to be recovered, is itself violative of Articles 14, 19, 265, 301 and 304 of the Constitution of India, hereafter referred to as the Constitution; and secondly, that the demand notices are illegal and without jurisdiction as in no case can interest be recovered from an assesses, without first serving upon him a prior notice of demand in terms of Sec. 8 of the Act.

2. The respondents have controverted these grounds, according to whom. Section 8 is constitutionally valid and no prior notice of demand is required to served en an assessee falling under any of the four categories. Controversy in these writ petitions therefore, ttes in a narrow compass and their decision turns upon only two questions : one, whether or not Sec. 8 is constitutionally valid; and two, whether or not interest could have been recovered from a petitioner falling under any of the aforesaid four categories, without serving upon him a prior demand notice.

3. Section 4 of the Act is the charging section and Sec. 5 empowers the Government to grant exemption from payment of sales tax. These two sections inter alia provide that sales tax shall be chargeable on every article sold by a dealer, unless it has been exempted from its Payment u/s 5, and further that tax shall be charged on an article according to the rate fixed the refer by the Government under Sec. 4; such rate in no case to exceed 25% of the taxable turn-over. Section 6 forbids a person from carring on business, unless duly registered as a dealer in accordance with the provision* of the Act and Section 17 exposes a dealer carrying on business in contravention of Section 6 to criminal liability. Section 7 makes provision for filing of return by dealers and their assessment and re-assessment to sales tax by the Assessing Authority. Section 8 lays down the procedure for recovery of tax and section 16 says that the amount of tax, penalty, interest or any other sum imposed under the Act, shall be recoverable as arrears of land