HAJI LAL MOHD. BIRI WORKS ALLAHABAD THROUGH ABDUL HAMID versus THE STATE OF U.P. AND OTHERS

Citation: [1974] 1 S.C.R. 25 · Decided: 23-04-1973 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed
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25 
HAJI LAL MOHD. BIRI WORKS ALLAHABAD TIIROUGH 
ABDUL HAMID 
v. 
1HE STATE OF U.P. AND OTHERS 
April 23, 1973 
[K. S. HEGDE AND H. R. KHANNA, JJ) 
U.P. Sales Tax Act, 1948 as a1ne11ded by Act 3 of 1964-Jnterest on Sales Tax 
arrears to be treated as tax under news. 8(1-A) introduced by 1964 a1nendmen1-
Wliether separ.'1.fe assessment order and notice of den1and ll'.?cessary in case of in· 
rerest-Aniount of interest whether ntust be specified in recovery certificate-
Anzendnient Act when canie into force_:._!nterest whether 
1ndv be char.-;!d for 
pedod during which recovery of tax is staved. 
The appellant firm was assessed to sales-tax for the assessment years 1957-58 
and 1958-1959. 
On an application made by the appellant for the composition 
of tax the recovery of the tax for 1957-58 \Vas stayed. The stay order \\'as vacat-
ed on September 25. 1967. 
Thereafter the sales-tax officer issued a certificate 
to the Collector for the recovery of arrears of sales-tax for the said ass~ssment 
years. 
ln the certificate it V..'cts mentioned that 8% interest per annum un the 
arrears of tax \Yas also to be recovered as arrears of land rev~nue in term-; of the 
provisions of section 8( 1-A) of the U.P. Sales Tax Act, 194b. as amen.Jed by 
Act 3 of 1964. 
In a writ petition under article 226 of the ConstitutiiJn the 
appellant ch~llengcd the res;overy of interest n1ainly on the ground 
th~1t th!re 
was no assessment order in regard to the int'.:rest and no notice of dem~lrj had 
been issued. The High Court dismissed the petition. 
Appeal in this Court \Vas 
filed with certificate. 
Dismissing the appeal, 
HELD: (i) The provision in sub-section (1-A.) of section 8 according: 
to 
which inteu·<;t shall be added to the amount of tax and shall be deemed for all 
purpose to be part of tax has been added only for the purpose of recoverr. The 
object apparently was that the amount of interest should be recovered i'1 
the 
same manner as the amount of sales-t;Lx. 
The amount of sales-tax nnd other 
dues under sub-section (8) of section 8 can be recoY~red as arrears cf land 
revenue. 
It was v,1ith a view to put the matter beyond any pale of cont~eoversy 
and to obviate any obiection that the in;.erest on sales-t<1X cannot be r~covered 
as land revenue that sub-section (1-A) pco\ided th:.i.t the interest shall Ce added 
to the amount of tax and b~ deemed for ;JI purposes to be a part of the tJX. It 
is a matter. of mere arithmetical calculation to arrive at the figure of interest. 
There is nothing in any of the rirovision" of the Act as may \Varrant m:::kiag of 
another assessment order by the sales-tax officer regarding the amount of interest 
or making ·it obligatory for him to issue a demand notice in respect of the in-
terest before sending the recovery certificates to the Collector. [2SG-29C) 
(ii) The argument that the sales-tax officer should specify the an1ount of ir-
terest in the recovery certificate 
could not be accented. 
As the amouat of 
interest \Vould go on increasing every day till the rec-overy of the sales-t3-K it is 
plainly not possible to specify the exact amount of interest in the reco\·,;ry cer-
tificate. [29D] 
(iii) According to clause (b) of sub-section (1) of section 5 of the U.P. 
General Clauses Act, 1904 where any U.P. Act is not expressed to come into 
force on a particular day than in the case of a U.P. Act made after the comrrience-
ment of the Constitution it shall come into operation on the date on· \\"hich the 
assent thereto of the Governor or the President as the case may require i;; first 
published in the official gazette. 
In the present case the President's assent to 
U.P. Act 3 of 1964 was DUblished in the official Gazette on Febrnary I, 1964 
and hence it must be held to have come into force on that day and not on the 
date on which the President's assent was given. [29F] 
(iv) There is nothing in the language of section 8( I-A) of the Act which 
prevents the running of interest because of the 09eration of any stay order. 
Indeed the liability to pay interest 
is created by the statute and the Sa!es-tax 
Officer has no discretion to 
grant any exempti'Jn 
from 
the 
paym ?nt 
of 
interest. [JOA] 
26 
SUPREME COURT REPORTS 
( 1974 j 1 S.C.R. 
CIVIL APPELLATE JURISDICTION : C.A. No. 543 (NT) -Of 1970. 
Appeal by certificate from the Judgment and order dated December 
2, 1969 of the Allahabad High Court in Civil Misc. No. 955 of 1969. 
A. K. Sen, Yogeshwar Prasa
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