Mandatory Form VII-L notice required before interest recovery; certificate proceedings set aside absent statutory service.

Service of notice in Form VII-L under rule 49E(2) of the Bengal Sales Tax Rules, 1941 was a mandatory condition precedent for recovery of interest where the interest determined exceeded any amount already paid; in its absence, recovery could not lawfully proceed. The certificate proceedings based on the aggregate demands were therefore set aside. The assessee was also given liberty to file or restore statutory appeals for the relevant assessment years on payment of the admitted tax, penalty and interest within the time fixed by the order.

---

---

Issues: (i) Whether recovery of interest could be sustained without service of notice in Form VII-L under rule 49E(2) of the Bengal Sales Tax Rules, 1941. (ii) Whether the certificate proceedings were liable to be set aside and the assessee given liberty to pursue or restore appeals on payment of admitted tax, penalty and interest.

Issue (i): Whether recovery of interest could be sustained without service of notice in Form VII-L under rule 49E(2) of the Bengal Sales Tax Rules, 1941.

Analysis: Rule 49E(2) required the assessing authority to serve a notice in Form VII-L before initiating recovery where the amount of interest determined exceeded the amount already paid, if any. The notice was a mandatory precondition for recovery proceedings, and the absence of such notice meant that recovery of interest could not lawfully proceed.

Conclusion: Recovery of interest without service of the mandatory notice was not sustainable.

Issue (ii): Whether the certificate proceedings were liable to be set aside and the assessee given liberty to pursue or restore appeals on payment of admitted tax, penalty and interest.

Analysis: Since the certificates had been issued for aggregate demands and no separate notice under rule 49E(2) had been served for the interest component, the recovery proceedings for all the years were held liable to be set aside. The assessee was also granted liberty to file appeals for the later assessment years and to seek restoration of the earlier appeals, subject to payment of admitted dues within the time fixed by the order.

Conclusion: The certificate proceedings were set aside and the assessee was granted the stated appellate relief.

Final Conclusion: The assessee obtained relief against the recovery proceedings, and the matter was left open for appellate adjudication in accordance with law if the prescribed payments and steps were taken within time.

Ratio Decidendi: Where the statute makes service of a notice in the prescribed form a condition precedent for recovery of interest, the recovery proceedings are invalid in its absence, and consequential relief may be granted to enable the assessee to pursue statutory appeals on compliance with the required pre-deposit.

---