Fresh notice of demand required after appellate reduction before interest can accrue under U.P. Sales Tax law.

Interest under section 8(1-A) of the U.P. Sales Tax Act could be recovered only after a valid notice of demand under section 8(1) and Rule 45 made the tax payable and fixed the time and manner of payment. Where an appellate order reduced the assessment, the original notice of demand ceased to operate and a fresh notice was a condition precedent to default; in its absence, the assessee was not liable for interest because no valid default arose after the appellate reduction.

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Issues: Whether interest under section 8(1-A) of the U.P. Sales Tax Act could be recovered when, after the appellate order reducing the assessment, no fresh notice of demand had been served.

Analysis: Under section 8(1) read with Rule 45, tax becomes payable only after service of the notice of demand specifying the time and manner of payment. Where an appellate order modifies the assessment, the original notice of demand ceases to be effective and a fresh notice of demand is necessary to fasten default. Section 8(1-A) makes interest payable only when the tax payable under section 8(1) remains unpaid for the prescribed period after expiry of the time stated in the notice of demand. Since no fresh notice was served after the appellate reduction of tax, the assessee could not be treated as being in default for purposes of interest.

Conclusion: The recovery of interest was not valid and the petitioner was not liable to pay interest in the absence of a fresh notice of demand after the appellate order.

Ratio Decidendi: Interest under section 8(1-A) of the U.P. Sales Tax Act is recoverable only after a valid notice of demand makes the tax payable, and where an appellate order alters the assessment, a fresh notice of demand is a condition precedent to the assessee's liability for interest.

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