Notice of demand before tax recovery: legal representatives could not be treated as defaulters without valid service.

Recovery of sales tax arrears against the legal representatives of a deceased assessee required prior service of a notice of demand under the U.P. Sales Tax Act. Although the legal representatives were liable for the arrears, that liability could be enforced only after valid demand was served, because default arises only on non-compliance with such notice. In the absence of any demand notice, they could not be treated as defaulters, and recovery proceedings were unauthorised. The same reasoning applied to interest, since interest could be levied only from a defaulter and no default existed without service of demand. The recovery proceedings, including those for interest, were quashed.

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Issues: Whether recovery proceedings for sales tax arrears and interest could be commenced against the legal representatives of the deceased assessee without serving them a notice of demand.

Analysis: Section 8(1) of the U.P. Sales Tax Act requires service of a notice of assessment and demand before the tax can be treated as payable within the specified time, and only on default does the amount become recoverable under section 8(8). Although the legal representatives were liable for the arrears under section 7-C, that liability could be enforced only after a notice of demand was served upon them. Since no such notice had been served, they could not be treated as defaulters. The same principle applied to interest, because interest under section 8(1-A) could be charged only from a defaulter and default could arise only after valid service of demand.

Conclusion: Recovery proceedings against the petitioners were unauthorised, and the proceedings for recovery of interest were quashed in favour of the petitioners.

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