Rule 25A interest reduction applies substantively; procedural delay cannot defeat amnesty where liability was still under dispute.

Rule 25A of the Kerala Abkari Shops (Disposal in Auction) Rules, 1974 is described as conferring a substantive reduction in interest, while the application and payment timeline is treated as directory rather than mandatory. Where liability was still under judicial determination and a fresh demand had to follow the court's decision, strict insistence on the original dates was rejected because compliance would have required an impossible act. The department was expected to first work out the correct balance demand and adjust amounts already collected; interest could then be levied only on sums actually and legally due. On that basis, the amnesty benefit was available in substance and interest on the unadjusted amount was not sustainable.

---

---

Issues: Whether the respondents were entitled to the benefit of reduction of interest under Rule 25A of the Kerala Abkari Shops (Disposal in Auction) Rules, 1974 despite not making the application and payment within the stipulated dates, and whether interest could be levied on amounts not legally adjusted while the dispute and writ proceedings were pending.

Analysis: Rule 25A conferred an entitlement to reduction of interest, but the procedure for claiming it was held to be directory rather than mandatory. The respondents could not comply with the time limits because the liability itself remained under judicial determination and a fresh demand was required only after the High Court's decision. The amount collected by the department during the relevant period ought to have been adjusted against the liability, and interest could only be charged on the amount actually and legally due. The principle that a person cannot be compelled to do an impossible act was applied, and strict insistence on procedural compliance was rejected where the State itself had not first worked out the correct balance demand.

Conclusion: The respondents were held entitled to the amnesty benefit in substance, and the demand of interest on the unadjusted amount was not sustainable.

---