TMI Blog1984 (4) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of amounts due under provisional assessments, once final assessments are made; it is said that the provisional should be deemed to have merged with the final. There is also an attack against section 23(3), as it now stands. We are however of the view that instead of examining these questions in the abstract, the cases in this batch can be disposed of on their facts, particularly in the light of a circumstance to which it is convenient to immediately advert. 2.. The law is that the liability to pay penal interest attaches automatically to the demand for tax, when default occurs in payment thereof, however erroneous the assessment be, and whether it is disputed or not. There was no provision, prior to Act 19 of 1980, even to make all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulgence given by the Government, the liability had attached itself to the tax payable under rule 21. The petitioner approached the Deputy Commissioner and the Board of Revenue, but both of them followed the decision of this Court in Haridas v. Assistant Commissioner, Sales Tax [1979] 44 STC 26 and held that as the Government had no power under the Sales Tax Act to permit instalment payments, penal interest should be deemed to have accrued under section 23(3) from the date on which tax was statutorily due. The learned Government Pleader relies on this decision to support the order impugned. This is what this Court had said in Haridas' case [1979] 44 STC 26: "The learned Government Pleader is therefore right in his submission that, strictly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the authorities functioning under the statute are bound to obey, and so obey. There is no case for anyone that the Government order in favour of the petitioner herein was disregarded as one without authority. In any event, the effect of the order was to lull the assessee into a belief that he could pay in instalments without incurring other consequences under the Act. The law has not been standing still after the decision in Haridas' case [1979] 44 STC 26 (Ker). The concept of article 14 of the Constitution has undergone considerable change, and even actions taken under colour of statute are nowadays being challenged on principles of promissory estoppel. The tax payable is an amount due to the Government and there may be nothing asto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sales Tax Appellate Tribunal against assessment orders for the years 1971-72 and 1972-73. His stay petition was not disposed of, and he moved this Court in O.P. No. 3531 of 1977 for mandamus. When the O.P. came up for hearing, the Government Pleader filed exhibit P3, memo, to the effect that if the petitioner paid 50 per cent of the amount due within a month, no further steps would be taken for collection of the balance due till the disposal of the appeals. The O.P. was disposed of, exhibit P4, judgment, on the basis of the above agreement. But even before the expiry of the one month agreed to, penal interest was demanded as per exhibits P5 and P6. Grant of time by an agreement to which the appropriate authority was a party cannot be diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 1st January, 1981. In connection with the final assessment proceedings also, there was a stay order from this Court in O.P. No. 4108 of 1980. The petitioner had complied with the conditions imposed from time to time and had paid a total amount of Rs. 1,18,973. Penalty was demanded by exhibit P4 dated 16th July, 1981, long after the final assessment had been set aside, and under circumstances, when the petitioner had paid more than the amount due as per the provisional assessment. We think the authorities acted arbitrarily. On the facts, therefore, we hold that the penal interest in question is not recoverable. 9.. There were no intervening orders of conditional stay or orders of Government permitting payment in instalments in O.P. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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