Saving clause under successor tax law upheld interest levy on delayed payment after reassessment was completed.

Assessment proceedings begun under the repealed Agricultural Income Tax Act, 1950 were continued under the saving and transitional scheme of the Agricultural Income Tax Act, 1991, and section 99 preserved those proceedings as well as actions taken under the former Act. Because the revised assessment and interest levy were made after the 1991 Act came into force, the law governing delayed payment was the law then in force. The demand notice objection was rejected because the modified order applied the earlier notice to the revised liability, including interest. The interest levy was therefore treated as legally sustainable.

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Issues: Whether interest could validly be levied on the tax liability determined for the assessment year 1988-89 under the Agricultural Income Tax Act, 1991, when the assessment proceedings had commenced under the Agricultural Income Tax Act, 1950.

Analysis: The relevant assessment proceedings were initiated under the repealed enactment but were continued after the commencement of the 1991 Act under the statutory saving and transitional scheme. Section 99 of the Agricultural Income Tax Act, 1991 preserved earlier proceedings, deemed actions taken under the repealed Act to have been taken under the new Act, and provided that pending proceedings and arrears could be continued and recovered under the 1991 Act. Since the revised assessment and the levy of interest were made after the 1991 Act had come into force, the law governing delay in payment was the law then in force. The Court also held that the demand notice issue did not assist the petitioner because the modified order made the earlier demand notice applicable to the revised liability, including interest.

Conclusion: The levy of interest was held to be legal and sustainable.

Final Conclusion: The writ petition failed and the challenge to the interest component in the impugned orders was rejected.

Ratio Decidendi: Where assessment proceedings initiated under a repealed agricultural income tax enactment are continued under the saving clause of the successor Act, interest on delayed payment of the assessed tax can validly be levied under the successor Act if the liability is determined and recovered after its commencement.

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