TMI Blog2001 (2) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... he demands made by the Revenue under s. 220(2) of the Act for payment of interest on the tax due for asst. yrs. 1977-78, 1978-79 and 1980-81 stand quashed. - Civil Appeal No. 10202, 10203, 10204 of 1995, W.P. Nos. 17068, 17069, 17070 of 1988, - - - Dated:- 9-2-2001 - Judge(s) : S. P. BHARUCHA., N. SANTOSH HEGDE., Y. K. SABHARWAL B.B. Ahuja, Senior Advocate (Rajiv Tyagi, B.V.B. Das and Ms. Sushma Suri, Advocates, with him), for the respondent. G. Sarangan, Senior Advocate (Sanjay Kunnur and R.N. Kesh-wani, Advocates, with him), for the appellant. Judgment N. SANTOSH HEGDE, J.: Being aggrieved by an order made by the Division Bench of the High Court of Karnataka in Writ Petn. Nos. 17068 to 17070 of 1988 [reported as Vik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequential order are only different steps in the same proceeding and the ultimate order relates back to the original order itself and that also in view of s. 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 (for short 'the Validation Act'), the original demand notices got revived by operation of law and due effect had to be given to such revival, The High Court, however, held that sub-s. (2) of s. 3 of the Validation Act kept alive the earlier demand notice even though payment in full was made pursuant to that demand and treated the same as due notice having been kept alive all along till the assessment order was upheld by the higher forum. On the above foundation, the writ petitions came to be dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying interest on the amount due. 5. Based on the above pleadings, the point emerging for our consideration is does the Act under s. 220(2) contemplate payment of interest of any sum of money due under a demand notice even after the said demand is satisfied ? 6. For the sake of convenience, it is necessary for us to extract the relevant part of that section which is in terms following : "20(2) If the amount specified in any notice of demand under s. 156 is not paid within the period limited under sub-s. (1), the assessee shall be liable to pay simple interest at one and one-half per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-s. (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Revenue refunded the amount due as per the said order of the authority. Thereafter, when the matter was taken up ultimately in reference to the High Court and the assessee lost the case, fresh demand notices were issued and it is also an admitted fact that in satisfaction of the said demand notices the appellant had paid the amount as demanded within the time stipulated therein. The question, therefore, is whether the Revenue is entitled to demand interest in regard to the amount which was refunded to the assessee by virtue of the judgment of the appellate authority and which was repaid to the Revenue after decision in the reference by the High Court on fresh demand notices being issued to the assessee ? Admittedly, on a literal meani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s settled by this Court in India Carbon Ltd. Ors. vs. State of Assam 1997 (6) SCC 479 wherein this Court held "Interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf." A Constitution Bench of this Court speaking through one of us (Hon'ble Bharucha, J.) in the case of V.V.S. Sugars vs. Government of A.P. Ors. 1999 (4) SCC 192 reiterated the proposition laid down in the Indian Carbon Ltd.'s case in the following words : "The Act in question is a taxing statute and, therefore, must be interpreted as it reads, with no additions and no substractions, on the ground of legislative intendment or otherwise." If we apply this principle in interp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 156 and after a further period of 35 days as provided under s. 220(1), the assessee should continue as a defaulter in the matter of payment of tax demanded. It further held that only in case the assessee defaults in payment of tax assessed, 35 days after the notice of demand under s. 156, the liability to pay interest accrues. In that case also admittedly the assessee had paid the tax when he received the demand notice under s. 156, hence, the High Court held that the requirements under s. 220(2) for attracting the liability to pay interest did not exist. 11. We are in agreement with the said view of the Kerala High Court. Though this judgment was brought to the notice of the Karnataka High Court in the impugned judgment, the said High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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