Tax interest after appellate reduction may be recovered without a fresh demand notice, despite merger arguments.

The tax scheme allowed interest under section 8(1-A) to be recalculated when assessed tax was varied in appeal, and a reduction in tax did not require a fresh notice of demand. The provisos to section 8, read with the main provision, showed that the legislature distinguished reduction from enhancement, and the doctrine of merger could not be used to impose an extra notice requirement. A retrospective amendment further clarified that recovery proceedings could continue for the reduced amount without a new demand notice, validating recovery of tax and interest on the appellate assessment.

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Issues: Whether, after reduction of sales tax in appeal, interest under section 8(1-A) of the Sales Tax Act could be demanded without issuing a fresh notice of demand, and whether the doctrine of merger required a fresh notice after the appellate order.

Analysis: The expression in section 8(1-A) that interest is to be recalculated when the tax is varied on appeal or by any competent authority showed that the legislature contemplated variation of interest without insisting upon a fresh notice of demand. The provisos to section 8(1-A), read harmoniously with the main provision, indicated that reduction of tax on appeal did not require a new notice, while enhancement was separately dealt with. The doctrine of merger was held not to be of rigid universal application and could not be read into section 8 so as to defeat the language of the provisos. The subsequently inserted section 8(9), given retrospective effect by the amending ordinance, expressly provided that on reduction in appeal no fresh notice was necessary and validated continuation of recovery proceedings for the reduced amount.

Conclusion: No fresh notice of demand was required after the appellate reduction of tax, and interest could validly be demanded and recovered on the reduced amount. The challenge failed.

Final Conclusion: The statutory scheme governed by section 8, as retrospectively clarified by the amending ordinance, permitted recovery of interest and tax on the reduced appellate assessment without a fresh notice of demand.

Ratio Decidendi: Where the governing tax provision expressly provides for recalculation of interest upon variation of assessment and a retrospective amendment clarifies that reduction in appeal does not require a fresh notice, the doctrine of merger cannot be invoked to impose an additional notice requirement.

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