GULATI, J. - (1.) THIS and the connected writ petitions raise a common question of law arising out of almost identical facts. Hence they are being disposed of by this common judgment. We shall set out briefly the facts in Writ Petition No. 6434 of 1972.
(2.) THE petitioner of a partnership-firm and is a dealer in textile goods. It is registered under the U.P. Sales Tax Act (hereinafter referred to as the Act). The dispute relates to the assessment years 1956-57 and 1957-58. Under a notification issued under section 3-A of the Act, the turnover of textile goods was taxable at single point at the rate of six pies per rupee. By notification dated 31st March, 1956, the rate of tax on textile goods was enhanced to one anna per rupee. The notification of 31st March, 1956, was held to be invalid by the High Court. The State Legislature passed the U.P. Sales Tax (Amendment) Act, 1957, validating the said notification. This Act was challenged and was declared invalid by a Full Bench of this Court in Bangali Mal v. Sales Tax Officer ([1958] 9 S.T.C. 492; A.I.R. 1958 All. 478.). The State Legislature again intervened and passed the U.P. Sales Tax (Amendment and Validation) Act, 1958, with a view to validating the enhanced tax on textile goods at the rate of one anna per rupee. The validity of this Validating Act was also challenged but the same was ultimately upheld by the Supreme Court. In the meantime, the State had also preferred an appeal to the Supreme Court against the decision of this court. The appeal was allowed in view of the Validation Act. The result of this litigation was that the State became entitled to realise the sales tax at the rate of one anna per rupee on textile goods. During the assessment year 1956-57, the petitioner had deposited tax in advance at the rate of one anna per rupee on the turnover of textile goods. Similarly, tax was deposited at the rate of one anna per rupee for the first three quarters of the assessment year 1957-58, but for the last quarter of that assessment year the petitioner did not pay any tax. The petitioner filed a writ petition on 30th January, 1958, in this court - being Writ No. 347 of 1958 - contending that it was liable to pay tax at the rate of six pies per rupee only and was entitled to the refund of tax deposited in advance at the rate of one anna per rupee. This petition was allowed, but the Supreme Court on appeal reversed the decision of the High Court. By two assessment orders dated 22nd February, 1961, and 25th July, 1961, the Sales Tax Officer, Basti, assessed the petitioner to sales tax for the assessment years 1956-57 and 1957-58 at the rate of one anna per rupee. Against these assessment orders the petitioner appealed. By the time these appeals came up for hearing this court decided that the tax was chargeable only at the rate of six pies per rupee. The Assistant Commissioner (Judicial), Sales Tax, therefore, allowed the appeals on 14th January, 1965, and reduced the tax to one half. The State then applied in revision and the Additional Judge (Revisions), Sales Tax, by his order dated 21st November, 1969, allowed these revisions and enhanced the tax again to one anna per rupee, on the basis of the decision of the Supreme Court, which had since been rendered. According to the decision of the revising authority the petitioner was found liable to pay a further sum of Rs. 11.14 for the assessment year 1956-57 and Rs. 12,789.65 in respect of the assessment year 1957-58. It may be mentioned here that when the petitioner had filed Writ Petition No. 347 of 1958 on 30th January, 1958, this court by an order dated 31st January, 1958, had by an ad interim order stayed the realisation of the tax at the higher rate. The interim order was in the following terms : "Let an ad interim order issue directing the opposite party not to realise any sales tax in excess of the amount due to the rate prevailing before the notification dated 31st March, 1956, was issued."
(3.) THIS order was eventually confirmed on 20th February, 1958. When the revising authority allowed the State's revision enhancing the rate of tax from six pies of one anna per rupee, no notice of demand was issued or served on the petitioner in respect of the enhanced tax, but by a letter dated 22nd December, 1969, the Sales Tax Officer, Basti, required the petitioner to deposit the additional tax as determined by the revising authority together with interest at the rate of 18 per cent. The petitioner was required to make the deposit within three days from the receipt of the letter. The petitioner complied with this requirement and deposited the enhanced tax on 26th December, 1969, but did not pay any amount towards interest. It appears, however, that the Sales Tax Officer issued to the Collector, Basti, certificate for the recovery from the petitioner two sums of Rs. 11.82 and Rs. 13,621.35 as interest in respect of the two assessment years in question. The interest was calculated at the rate of 18 per cent from 1st February, 1964, to the date of payment. The petitioner protested against the recovery of interest but did not succeed. The petitioner has now challenged the recovery proceedings in this petition under article 226 of the Constitution on the ground that having regard to the circumstances of the case the petitioner is not liable to pay any interest at all and the recovery certificates issued against it are wholly illegal and void. Thus, the short question that we have to determine is as to whether the petitioner is liable to pay interest. Section 8 of the Act provides for the payment and recovery of tax. Under sub-section (1) of section 8, the tax assessed has to be paid within 30 days from the date of the service of notice of assessment and demand and in default the whole amount remaining due becomes recoverable as arrears of land revenue under sub-section (8). Sub-section (1-A) was added to section 8 by U.P. Act No. 3 of 1964. This provision is material for our purposes and is reproduced below : "(1-A) 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." It is under this provision that interest is being sought to be recovered from the petitioner.;