Cess liability accrues when the levy takes effect, even if collection machinery and the Collector are appointed later.

The cess on paper and paperboard was held recoverable for the period from 1 November 1980 to 16 February 1981 because the levy itself had already taken effect from 1 November 1980 under the Industries (Development and Regulation) Act, 1951. The later notification and the Paper and Paper Board Cess Rules, 1981 were treated as machinery provisions for assessment and collection, not as provisions postponing liability. The absence of a Collector before 16 February 1981 did not extinguish the tax obligation already created by the taxing event, and retrospective-operation arguments were distinguished. The demand for the back period was therefore upheld.

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Issues: Whether the cess levied on paper and paperboard could be collected for the period from 1-11-1980 to 16-2-1981, notwithstanding that the rules governing its collection were framed later and the Collector was appointed only on 16-2-1981.

Analysis: The levy itself had been imposed with effect from 1-11-1980 under the Industries (Development and Regulation) Act, 1951. The later notification and the Paper and Paper Board Cess Rules, 1981 supplied the machinery for levy and collection, but did not postpone the underlying liability. The Court applied the principle that accrual of the duty obligation is distinct from assessment and collection, and relied on the rule that the absence or later appointment of the Collector does not extinguish the liability already created by the taxing event. The decisions concerning retrospective operation of notifications and the applicability of provisions from another enactment were distinguished as not affecting the existence of the liability to cess for the back period.

Conclusion: The cess was validly recoverable for the period prior to the appointment of the Collector, and the demand was upheld.

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