PRAHLAD RAI Vs. SALES TAX OFFICER MEERUT
LAWS(SC)-1990-12-44
SUPREME COURT OF INDIA (FROM: ALLAHABAD)
Decided on December 04,1990

PRAHLAD RAI Appellant
VERSUS
SALES TAX OFFICER,MEERUT Respondents





Cited Judgements :-

P.K. ORES PVT. LTD VS. COMMISSIONER OF SALES TAX [LAWS(ORI)-2022-5-85] [REFERRED TO]
IN THE MATTER OF KAPRI INTL. PVT. LTD VS. STATE [LAWS(DLH)-2012-11-300] [REFERRED TO]
GOVERNMENT MEDICAL STORE DEPOT VS. SALES TAX TRIBUNAL AND ORS. [LAWS(P&H)-2009-5-169] [REFERRED TO]
COMMISSIONER OF TRADE TAX U P VS. KANHAI RAM THEKEDAR [LAWS(SC)-2005-4-9] [REFERRED TO]
BISLERI INTERNATIONAL VS. CCE [LAWS(CE)-2009-2-176] [REFERRED TO]
RAJASTHAN WOOL INDUSTRIES VS. STATE OF PUNJAB [LAWS(P&H)-1993-1-61] [REFERRED TO]


JUDGEMENT

- (1.)The appellants were served with two notices by the Sales Tax Officer, Hapur for the recovery of Rs. 34,796 44 and Rs. 12,850/ -on account of intere st on arrears of sales tax. The business firms owned by the ancestors of the appellants fell into arrears in respect of sales tax for the years 1952-53 to 1962-63. The appellants, having inherited the properties of the ancestors, were asked to pay the arrears of sales tax. It is the admitted position that the appellants had paid the said arrears. The above-mentioned notices were only in respect of the interest on the amount of arrears so paid. The appellants challenged the notices by way of a writ petition before the High Court. The High Court dismissed the writ petition. This appeal via special leave petition is against the judgment of the High Court.
(2.)The U.P. Sales Tax Act, 1948 was amended and sub-s. (1 -A) was added to S. 8 of the Act. The amendment was introduced by the U.P. Sales Tax (Second Amendment) Act, 1963 which was enforced with effect from January 25, 1964. Sub-s. (I-A) is as under:-
"(1 -A) If the tax payable u/sub-s. (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 U.P. Bikrikar (Dwitiya Sanshodhan) Adhiniyam, 1963, whichever is later, then, without prejudice to any other liability of 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."

(3.)The appellants contended before the High Court that above quoted S. 8(1 A) having been enforced with effect from Jan. 25, 1964 the arrears of sales tax which became due as a result of assessment made prior to the said date cannot come within the mischief of the said sub-section. The High Court rejected the contention in the following words:
"Now, S. 8(1-A), no doubt, was added to the U. P. Sales Tax Act with effect from 25th of January, 1964, but it provides that if any amount on account of sales tax is in arrears, for a period of six months from the date of the service of the notice of demand, or from the commencement of the provision, it shall carry interest at the rate of 18%. Admittedly, the sales tax was in arrears against the petitioners when S. 8(1 -A) came into force and it remained unpaid after the expiry of six months fro m 25th of January, 1964, when the provision come into force. Interest, therefore, started automatically running on the arrears irrespective of the years to which they related. There is thus no force in this contention."

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