TMI Blog2000 (2) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, based on which interest could be claimed. A valid demand for the assessment year 1975-76 could have been made by the State of Haryana only after the judgment of this Court, i.e., from January 6, 1997, and on such a demand being made on February 20, 1997, the appellant has satisfied the said demand within the period available to it. If that be so, in our opinion, the State could not have demanded interest on the tax due for the assessment year 1975-76 based on its earlier demand notice. Thus the interest demanded by the State of Haryana on the amount due from the appellant for the assessment year 1975-76 cannot be sustained - Civil Appeal No. 979 of 1998, - - - Dated:- 16-2-2000 - BHARUCHA S.P. AND SANTOSH HEGDE N. AND RUMA PAL JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Haryana again issued a demand notice to the appellant levying sales tax on the turnover involving levy transactions. A challenge to the said demand notice by the appellant came to be rejected by the Punjab and Haryana High Court on the ground the appellant should first avail the statutory remedy available to it without deciding the validity of the notice. The appellant challenged the said demand order before this Court which challenge was admitted by this Court by grant of special leave. This Court also issued interim orders restraining the respondent-State from enforcing the demands. 3.. Once again, during the pendency of the appeal of the appellant before this Court, the respondent-State issued further demand notices in the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 1984-85 dated February 20, 1997. Out of these the demand for the year 1975-76 was for a sum of Rs. 89,39,947. It is submitted before us that the appellant has paid the amount so demanded in the month of March, 1997, itself. However, on April 25, 1997 the appellant was issued a further notice purported to be under section 59 of the Haryana General Sales Tax Act, 1973 (the "Haryana Act") demanding a sum of Rs. 2,26,01,400 towards the interest payable on the belated payment of Rs. 89,39,947 which was the principal tax due from the appellant for the assessment year 1975-76. 7.. The appellant challenged this levy of interest before the Punjab and Haryana High Court but the same came to be rejected by an order of the said High Court dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of sales tax for the assessment year 1975-76, the demand was without authority of law. Subsequently, the State of Haryana could have made such demand only after the judgment of this Court which was delivered on January 6, 1997 Reported as Food Corporation of India v. State of Kerala [1997] 105 STC 4. There is no doubt that by the judgment of this Court, the right of the State of Haryana to collect sales tax would date back to 1975 but that is not the same as saying that during the said period when the law was adverse to the State of Haryana it could still have made a legitimate demand, because, as stated above, during the period between 1975-97, the States' authority to make a demand was eclipsed because of the law declared by the High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, is whether on the demands now made by the respondents on the appellant, the State can also claim interest. We have noticed that the power of the State to collect interest arises under section 59 of the Act. The said section authorises the State to collect interest on belated payment of tax demanded but this payment of interest can be levied on such belated payment of tax which is legally payable for which a valid demand is condition precedent. As has been noticed by us, the demand notice of the year 1982 which was issued during the period when the State had no authority to levy sales tax cannot be said to be a valid demand, based on which interest could be claimed. A valid demand for the assessment year 1975-76 could have been made b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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