TaxTMI 
TaxTMI 
1994 (5) TMI 239
X X X X Extracts X X X X
X X X X Extracts X X X X
....re. The assessment year concerned is 1981-82. The petitioner collected and paid tax on his sales of kattymore at 4 per cent as if it is goods taxable multi-point. The assessing authority was however of a different opinion. According to him, kattymore was a milk product falling under entry 3 of the First Schedule to the Act taxable single point at 10 per cent on the first sale. He completed the assessment, exhibit P1, accordingly and demanded the differential amount of tax due from the petitioner. The order of assessment and the notice of demand were served on March 20, 1983. The petitioner challenged the assessment in appeal before the Appellate Assistant Commissioner. The appeal was dismissed. But his second appeal to the Appellate Tribuna....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 23 provides for payment of penal interest at the rates specified if the tax or any other amount assessed or due under the Act is not paid by the dealer within the time prescribed therefor in the Act or in any rule made thereunder, and in other cases, within the time specified therefor in the notice of demand or within the time allowed for its payment by the appellate or revisional authority, or if payment is permitted in instalments by any of the authorities empowered in that behalf, any such instalment is not paid within the time specified therefor. The rate of penal interest is one per cent per month for the first three months and two per cent per month for the subsequent period. Subsections (4) and (5) of the section provide for c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder disappears. In Rajagiri Rubber & Produce Co. Ltd. v. Additional Sales Tax Officer [1983] 53 STC 370 (Ker); 1983 KLT 475, the question was whether disputed tax paid pursuant to an order of assessment should be refunded when the assessment is set aside in appeal and remanded with direction to make a fresh assessment. Paripoornan, J., answered the question in the affirmative because once the appellate order set aside the order of assessment, there was no assessment or notice of demand in the eye of law and therefore the assessing authority was not entitled to retain the amount collected pursuant to the order of assessment. 8.. The consequence of an appellate order setting aside or modifying an order of assessment is to nullify the dema....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 10.. Any other construction is fraught with serious consequences and likely to result in injustice for no fault of the assessee. See the following anomalous position. An assessee who has lost his first appeal and gets an order of stay from the Appellate Tribunal is saved from penal interest for the period of pendency of the appeal before the Tribunal; but an assessee who succeeds before the first appellate authority and had therefore no necessity or opportunity to get any order of stay from the Appellate Tribunal becomes liable for penal interest during the period if he loses his case before the Tribunal. This is the position going by the contention of the Revenue. Such an anomalous position cannot be postulated and the court is entitle....