Appeal No 20611971
From the Judgment and Order dated the 13th May 1970 of the Allahabad High Court in Civil Misc
Writ No 1249 of 1970
SC Manchanda and OP Rana for the Appellant
J Ramamurthi amicus curiae for Respondents
The Judgment of the Court was delivered by 134 KHANNA J
This appeal on certificate is against the judgment of Allahabad High Court whereby the High Court accepted petition under article 226 of the Constitution of India filed by the respondent and quashed the recovery proceedings initiated by the appellant
The respondent firm was assessed to sales tax under the UP Sales Tax Act 1948 hereinafter referred to as the Act for the assessment year 1958 59
The respondent went up in appeal and the tax demand was reduced in appeal
On revision filed by the respondent the total demand of sales tax was further reduced
The respondent made various payments towards the amount of tax found due from him
The sales tax authorities initiated proceedings for  recovering  the balance of the tax and realising interest at the rate of 18 per cent from February 1 1964 on part of the tax demand
These recovery proceedings were challenged by the respondent by means of writ petition on the ground that a fresh notice of demand should have been issued to him in respect of the amount as reduced in appeal and revision
Unless that was done the respondent could not be treated as a default er
The liability for payment of interest of the respond ent was also questioned
The High Court accepted the first contention and quashed the recovery proceedings
We have heard Mr Manchanda on behalf of the appel lant
No one appeared on behalf of the respondent
Mr Ramamurthi however argued the case amicus curiae
After giving the matter our consideration we are of the opinion that the judgment under  appeal cannot be sustained
Two questions arise for determination in this appeal
The first question is whether the respondent is liable to pay interest on the amount due from him as sales tax
The answer to this question in our opinion should be in the affirmative in view of the provisions of sub section 1A of section 8 of the Act
The aforesaid sub section as also sub section 1 and 8 of that section read as under 8
Payment and recovery of tax 1 The tax assessed under this Act shall be paid in such manner and in such instalments if any and within such time not being less than fifteen days from the date of service of the notice of assessment and demand as may be specified in the notice
In default of such payment the whole of the amount then remaining due shall become recoverable in accordance with sub section 8
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 de faulter may in consequence of such non payment incur under this Act simple interest at the rate of eighteen per cent for annum shall run on the amount then remain 135 ing 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  8 Any tax or other dues payable to the State Government under tiffs Act or any amount of money which a person is required to pay to the assessing authority under sub section 3 or for which he is personally liable to the assessing authority under sub section 6 shall be recoverable as arrears of land revenue
 This Court considered the above provisions in the case of Haji Lal Mohd Biri WOrks vs State of UP1 and held that the liability to pay interest under section 81 A is auto matic and arises by operation of law
It was further ob served in that case that it is not necessary for the sales tax officer to specify the amount of interest in the recov ery certificate
We may add that there is no dispute in the present case that the notice of assessment and demand was served upon the assessee respondent
The respondent cannot therefore escape liability for payment of interest
The second question which arises for consideration is whether it was necessary for the sales tax authorities to issue a fresh notice of demand to the respondent after the tax assessed by the sales tax officer was reduced on appeal and further reduced on revision
So far as this question is concerned we find that sub section 9 has been added in section 8 of the Act by the UP Sales Tax Amendment Act 3 of 1971
The aforesaid sub section reads as under 9 Notwithstanding anything contained in sub section 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 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 1 32 STC 496
136 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 revision or other proceeding the amount of such tax or other dues is reduced i it shall not be necessary for the assessing authority to serve upon the dealer a fresh notice ii if any recovery proceedings are pending the assessing authority shall give intimation of the fact of such reduction to the Collector who shall thereupon take steps for the recovery of only the reduced amount and iii any proceedings initiated on the basis of the notice or notices served upon the dealer before the disposal of such appeal revision or other proceeding including any recovery proceedings may be continued in relation to the amount so reduced from the stage at which it stood immediately before such disposal c no fresh notice shall be necessary in any case where the amount of the tax or other dues is not varied as a result of such appeal revision or other proceeding
 It is apparent from clause b of sub section 9 that where as a result of appeal revision or other proceedings the amount of the tax or other dues is reduced it shall not be necessary for the assessing authority to serve upon the dealer a fresh notice
The Allahabad High Court has also taken the same view in the case of Firm Parshuram Rameshwar Lal vs State of UP3 In view of the above we accept the appeal set aside the judgment of the High Court and dismiss the writ petition filed by the respondent
The parties in the circumstances shall bear their own costs throughout
PHP Appeal al lowed


Summary:
The respondent firm was assessed to sales tax under the Uttar Pradesh Sales Tax Act 1948 for the assessment year 1958 59
On an appeal filed by the respondent the quantum of tax was reduced
On a revision filed by the respondent made various payments towards the amount of tax found due from time to time the Revenue initiated proceedings for recovering the balance of the tax and realising interest at the rate of 18 per cent
The Revenue did not issue any fresh notice of demand after the tax was reduced but origi nally demand notice for the entire sum for which the re spondent was assessed was issued
In a Writ Petition filed by the assessee the High Court quashed the recovery proceedings on the ground that a fresh notice of demand should have been issued to the respondent in respect of the amount as reduced in appeal and the revi sion
Allowing the appeal by special leave HELD 1 Section 8 of the Act was amended by adding sub section 9 thereto by UP Sales Tax Amendment Act 3 of 1971
The said sub section provides that notwithstand ing any judgment decree etc
where any notice of assessment and demand in respect of any tax or other dues is served upon a dealer by an Assessing Authority and where as a result of appeal or revision filed by the assessee the amount of tax is reduced it shall not be necessary for the Assessing Authority to serve upon the dealer a fresh notice
The High Court judgment was therefore erroneous
135F H 136 A E Firm Parshuram Rameshwar Lal vs State of UP 33 STC 540 approved
2 Section 81A of the Act provides for payment of interest at the rate of 18 per cent on the tax amount re maining due from the expiry of the time specified in the notice of demand till the
date of payment
The court in Haji Lal Mohammad vs State of UP has held that the li ability to pay the interest under section 8IA is automatic and arises by operation of law and that it is not necessary to mention the amount of interest in the recovery certifi cate
134 E H 135 A E Haji Lal Mohd Biri Works vs State of UP 32 STC 496 followed