The main legal point established is that a licensee is not liable to pay the licence fee for the period when the business premises remained closed, and the demand for penal interest is not justified if the licence fee has been deposited.

JUDGMENT :

1. Petitioner M/S Wine Centre through medium of this petition asserted that it was a licence holder of Vend No. 80-OFF at Link Road, Jammu; that by virtue of SRO-68, licence fee of Excise Vends was enhanced by the Government, from Rs.50,000/- to Rs.5.00 lacs in the city of Jammu; that as a consequence of this enhancement, the petitioner did not find viable to run his Licence Vend at Link Road, Jammu and he informed the respondents that he is not in a position to run the shop there; that he filed an application for shifting of his premises from Link Road to Bus Stand; that for this period i.e. from 1995 to 1997 his shop remain closed and no business was transacted by him.

2. It was further pleaded that in pursuance to the application filed by him, he was permitted to shift his premises from Link Road to Bus Stand, Jammu subject to the condition that the petitioner will clear all the outstanding i.e Licence Fee for the years 1995-96 to 1997-98; that being aggrieved of this condition, the petitioner filed a writ petition bearing OWP No. 298/1997, wherein at the interim stage, the petitioner was directed to deposit an amount of Rs. 6.00 lacs with the Excise Commissioner for the present and execute an undertaking to his satisfaction that in case he fails in the writ petition and in case the litigation pending on the raising of the Licence Fee goes in favour of the Revenue, he would deposit the remaining amount found due within six months after the outcome of the subject matter; that the said writ petition came to be disposed of by this Court on 26.02.2002 with a direction that the petitioner would prefer a representation with the respondents seeking relief from the Excise Commissioner in respect of the contention raised by him, however, it was alleged that the representation which had already been filed was not considered by the Excise Commissioner till date.

3. Next it was pleaded, that in the meanwhile SRO-64 and SRO 68 were challenged by some of the petitioners before this Court; that vide Govt. Order No. 123-F of 1998 dated 07.04.1998 thereby uniform Licence Fee of Rs. 3.00 lacs should be charged from all the licensee with the condition that the outstanding amount shall be recovered in a maximum of 36 monthly installments beginning from April 1998 and no installment shall be less than 1/36th of the total amount of arrears subject to further condition that the interest @ 2% per month shall be charged from 1st of April, 1998 till the outstanding is fully recovered, with further stipulation that no interest shall be charged from the date of stay granted by the Court to 31.03.1998, as such, the petitioner’s petition calling into question SRO-68 of 1995 was disposed of vide order dated 26.02.2002 and the petitioner deposited the balance amount of Rs. 8.50 lacs with the respondents which was the Licence Fee for the period from 1995 to 1997.

4. It was further alleged that the respondents vide their Communication No. 1251-53/CRS dated 17.03.2003 directed the petitioner to pay the penal interest of Rs.14,49,000/- within a period of 15 days from the date of receipt of the notice.

5. Petitioner being aggrieved of the aforesaid Communication dated 17.03.2003 directing the petitioner to pay the penal interest, filed this petition and challenge the impugned order on the ground that the impugned order of recovery of interest has been passed without hearing the petitioner, having been worked out arbitrarily as the same is not discernable from the notice itself as to how the respondents have worked out the amount of Rs.14.49 lacs; that power to recover the interest as contemplated under Section 8(2) of the General Sales Tax Act which clearly states that the liability to pay interest is incurred only if the tax is not paid within the period specified in the Demand Notice; that the interest becomes due only from the last date fixed for payment of tax mentioned in the Demand Notice and it cannot be claimed from the date the tax is due; that