Interest under Section 8(1-A) of the U.P. Sales Tax Act arises automatically upon tax default without needing a separate assessment or demand notice.

1. The following Question of law has been referred for the opinion of this Full Bench by a Division Beach of this Court : -
"Whether, in order to recover interest under S.8 (1 - A) of the U. P. Sales Tax Act, it is necessary for the Sales Tax Officer to make an assessment order in respect of the interest and to issue a notice of demand in respect of such interest"

2. In 1963 the Sales Tax (Second Amendment) Act was enforced. S.2 of this Act added sub-section (1 - A) to S.8 of the principal Act. That provision reads : -
"If the tax payable under sub-section (1) remains unpaid for six months after the expiry of the time specified in the notice of assessment and demand, or the commencement of the Uttar Pradesh Bikri Kar (Dwitiya Sanshodhan), Adhiniyam, 1963, whichever is later, then without prejudice to any other liability or penalty which the defaulter may in consequence of such non - payment, incur under this Act simple interest at the rate of eighteen per cent per annum 'shall run on the amount then remaining due from the date of expiry of the time specified in the said notice, or from the commencement of the said Adhiniyam, as the case may be and shall be added to the amount of tax and be deemed for all purposes to be part of the tax:'
Provided that where as a result of appeal, revision or reference, or of any other order of a competent Court or authority, the amount of tax is varied, the interest shall be 'recalculated accordingly':
Provided further that the Interest on the excess amount of tax payable under an order of enhancement shall run from the date of such order if such excess remains unpaid for six months after the order".
(Underlined (here into ' ') by me) S.3 of the amending Act introduced S.33 in the principal Act. It provides that In respect of a sum recoverable under the Act as arrears of land revenue the assessing authority could forward to the Collector a certificate of recovery specifying the sum due. This provision further provides that the certificate would be conclusive evidence of the existence of the liability, the amount of liability and the person so liable. The Collector is required to recover the amount mentioned in the certificate as if it were arrears of land revenue.

3. The controversy between the parties relates to the interpretation of S.8 (1 - A) and the question for consideration is whether in the absence of notices of demand having been issued by the Sales Tax Officer requiring the petitioners to pay interest, the recovery proceedings in that behalf are competent.

4. To decide the question of law referred to us it is necessary to mention in brief certain facts relating to the cases before us. The dispute between the parties relates to the assessment years 1957-58 and 1958-59. Assessment orders on the petitioners in respect of these years were passed by the Sales Tax Officer on June 10, 1959 and February 12, 1963 respectively. .

5. Recovery certificates were issued under S.8 of the Act by the Sales Tax Officer to the Collector in respect of the assessments mentioned above as the amount assessed was not paid. The petitioners' case is that the entire amount of tax assessed by means of the two orders mentioned above has been paid and now the objection is confined only to the recovery of interest

6. It has been contended on behalf of the assessee petitioners that S.8 (1 - A) creates a legal fiction that the amount of interest which is added to the tax is a part of the tax and for that reason the procedure for the demand of the tax should be followed also In respect of the recovery of the amount of interest

7. What is provided in S.8 (1 - A) is : -
(1) That if the tax payable under sub-