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TMI Blog1973 (12) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 courtbeing Writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year 1961 and as the petitioner had not paid the full tax until 26th December, 1969, he became liable to interest at the rate of 18 per cent per annum after the expiry of six months from 1st February, 1964, when sub-section (1-A) was added to section 8 of the Act. According to him, the order of the revising authority is not an order of enhancement and the petitioner's case is not covered by the second proviso to sub-section (1-A) of section 8 of the Act. He goes on to argue that under section 8(1) every assessee has to pay tax assessed on him within the time specified in the notice of demand issued by the Sales Tax Officer and any subsequent variation in the tax assessed as a result of appeal or revision does not bring into existence a fresh assessment order. This contention of the learned counsel is not correct. The expression "tax assessed" in sub-section (1), no doubt, primarily refers to the tax assessed by the assessing authority, but it shall also include the tax assessed by the appellate or the revising authority, when the matter goes up in appeal or revision. The assessment order merges in the order of the appellate authority, which in turn merges in the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility as determined by the appellate order is subsequently reduced in revision. This position, however, has been modified to some extent, by sub-section (9) of section 8(1-A) of the Act, which was introduced by U.P. Act No. 3 of 1971. This provision reads: "(9) Notwithstanding anything contained in sub-sections (1) and (1-A) and notwithstanding any judgment, decree or order of any court, tribunal or other authority, where any notice of assessment and demand in respect of any tax or other dues under this Act is served upon a dealer by an assessing authority and an appeal, revision or other proceeding is filed in respect of such tax or dues, then- (a) where as a result of such appeal, revision or other proceeding the amount of such tax or other dues is enhanced, the assessing authority shall serve upon the dealer a fresh notice only in respect of the amount by which such tax or other dues are enhanced, and any proceeding in relation to the amount specified in the notice already served upon him before the disposal of such appeal, revision or other proceeding may be continued from the stage at which it stood immediately before such disposal; (b) where as a result of such appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of assessment. Here, obviously, the enhancement means the enhancement of tax over and above the tax assessed by the assessing authority. No such specific power of enhancement has been conferred upon the revising authority under section 10, which. only provides that the revising authority may pass such order as it deems fit. Clearly, the revising authority cannot enhance the tax over and above the tax as assessed by the Sales Tax Officer, which power has been conferred only upon the appellate authority but the word 'enhancement' in the second proviso to section 8(1-A) of the Act has not been used in that sense. The enhancement contemplated by that provision would also include the enhancement of tax as assessed by the appellate authority even though not beyond the tax as assessed by the assessing authority. Thus, where a tax is reduced by the appellate authority and the revising authority restores the order of the assessing authority that will amount to enhancement. This view finds support from clause (a) to sub-section (9) quoted above, which provides that a fresh notice of demand shall be issued in respect of the amount by which the tax is enhanced as a result of appeal or revisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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