1994 (9) TMI 334

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....and for an amount of Rs. 9,806.80 towards tax and Rs. 491.12 towards surcharge. This order of assessment dated December 20, 1976 and which was served on the petitioner-assessee on February 18, 1977, was modified in appeal by the Appellate Assistant Commissioner by his order dated December 30, 1980. Thereunder there was a reduction made in the quantum of addition made to the turnover and the assessing authority was directed to modify the assessment accordingly. The revised order of assessment is dated August 31, 1981. The demand for tax got reduced to Rs. 7,710.36 and surcharge to Rs. 386.27. Copies of the revised order of assessment and of the notices of demand consequent thereto, which were received by the assessee on October 30, 1982, are....

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....y its proceedings, exhibit P6, dated June 14, 1985. Petitioner has filed this writ petition challenging exhibits P5 and P6 and the demand for penal interest made therein.   4.. There is no dispute about the facts of the case. The recovery of the amount demanded as per the original order of assessment dated December 20, 1976, had been stayed by the Government as intimated in exhibit P1 subject to the petitioner furnishing security. The petitioner admittedly furnished security on August 19, 1977. Going by the terms of exhibit P1 there was thus an order of stay of recovery of the tax demanded under the assessment pending disposal of the appeal by the Appellate Assistant Commissioner. This is not a case where Government had granted the ....

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....reduced to the amount mentioned in exhibit P3. Sub-clause (5) of section 23 which was introduced into the Act with effect from September 16, 1980 by Act 19 of 1980 lays down that where as a result of any order in appeal any tax assessed or any other amount due from any dealer has been reduced, the penal interest levied for the non-payment of such tax or other amount shall be proportionately reduced. The liability of the petitioner for payment of penal interest on the amount mentioned in exhibit P3 is therefore cast by the provisions of sub-section (5) of section 23. The extreme contention raised by counsel for the petitioner that the petitioner is not liable to pay penal interest till revised order of assessment was passed and communicated ....