TaxTMI 
TaxTMI 
2016 (5) TMI 1234
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....ore the State Government, which was dismissed on 12th April, 1978. The petitioner, thereafter, filed a bunch of writ petitions before the High Court, which was heard and allowed by a judgment dated 15th March, 2002. The writ Court held that the order of the Excise Commissioner demanding excise duty on wastage of Beer was unwarranted and, accordingly, quashed the demand notices. The State of U.P., being aggrieved by the judgment of the High Court, filed a special leave petition before the Supreme Court, which was entertained and was converted into a civil appeal. The Supreme Court while admitting the appeal, rejected the application for stay of the judgment of the High Court. The Supreme Court eventually allowed the appeal of the State Government by judgment dated 23rd September, 2011 reported in 2011 (3) SCC 588 and quashed the judgment of the High Court. The Supreme Court held that the demand towards wastage of beer was justified. Pursuant to the decision of the Supreme Court dated 23rd September, 2011, the petitioner deposited the demand of Rs. 81,94,310.20 paise on 3rd November, 2011. The petitioner thereafter received the impugned order dated 1st June, 2012 demanding penal i....
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...., which is the charging section for realisation of interest upon failure to pay the excise revenue within the stipulated period. For facility, the said provision is extracted hereunder:- "38-A. Interest on arrears of excise revenue. - (1) Where any excise revenue has not been paid within three months from the date on which it becomes payable, interest at such rate not exceeding twenty-four per cent per annum, as may be prescribed, shall be payable from the date such excise revenue becomes payable till the date of actual payment: Provided that until a higher rate is prescribed, the rate of interest will be eighteen per cent per annum; Provided further that in respect of an excise revenue which became payable before the commencement of the Uttar Pradesh Excise (Amendment) Act, 1985 interest at the said rate shall be payable from the date of such commencement if the excise revenue is not paid within 3 months of the said date." The aforesaid provision was inserted by U.P. Act No.7 of 1985 with effect from 28th March, 1985. It is apparently clear from a perusal of the aforesaid provision that the said provision is prospective in nature and would apply to....
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....s "legally recoverable". The excise revenue becomes payable when it is determined. Once the Supreme Court decided the issue and held the excise revenue was legally recoverable, the same was required to be paid by the petitioner. Failure to pay thereafter within the stipulated period would invite penal interest but not before. Our view is fortified by a decision of the Supreme Court in the case of New Delhi Municipal Committee Vs. Kalu Ram and another, 1976 (3) SCC 401, wherein the Supreme Court held as under: "........Does Section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1958 create a right to realise arrears of rent without any limitation of time ? Under section 7 the Estate Officer may order any person who is in arrears of rent 'payable' in respect of any public premises to pay the same within such time and in such instalments as he may specify in the order. Before however the order is made, a notice must issue calling upon the defaulter to show cause way such order should not he made and, if he raised any objection, the Estate Officer must consider the same and the evidence produced in support of it. Thus the Estate Officer has to deter....
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....t the State of Haryana did not have the constitutional authority to impose sales tax on levy transaction. In the year 1982, the State of Haryana again issued a demand notice, which was again challenged and the levy of tax was again quashed. This time the matter travelled to the Supreme Court. The Supreme Court allowed the appeal and held that the State of Haryana was competent to levy sales/purchase tax on such transactions. Pursuant to the decision of the Supreme Court, fresh demand notices were again issued for the assessment year 1975-76 onwards, which the assessee paid but subsequently, interest was imposed. The Supreme Court held that interest was not payable as there was no valid demand levying sales tax in existence. The Supreme Court held that the demand for payment of sales tax was quashed by the High Court and, therefore, no interest for this period could have been paid. The Supreme Court held: "10. As we have noticed hereinabove, so far as the State of Haryana is concerned during the period between 17.5.1975 to 6.1.1997, the law declared by the High Court was that the State of Haryana did not have the constitutional authority to impose sales tax on levy transact....
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....y to levy sales tax cannot be said to be a valid demand, based on which interest could be claimed. A valid demand for Assessment Year 1975-76 could have been made by the State of Haryana only after the judgment of this Court i.e. from 6.1.1977 and on such a demand being made on 20.2.1977, the appellant has satisfied the said demand within the period available to it. If that be so, in our opinion, the State could not have demanded interest on the tax due for Assessment Year 1975-76 based on its earlier demand notice." We are of the opinion that once the High Court had quashed a demand, the excise authorities did not have any authority to realize excise revenue on wastage of beer nor could the excise department could make a valid demand for payment of excise revenue on wastage of beer during the period when the judgment of the High Court ruled the roost. So long as the decision of the High Court stood, there was no valid demand for payment of excise revenue on wastage of beer. Only after the judgment of the Supreme Court, which was delivered on 23rd September, 2011 that the excise department could raise a fresh demand. No doubt, the right of the excise department to collect the ex....
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....Church of South India Trust Association, 1992 (3) SCC 1 has clearly distinguished and differentiated between a demand being stayed vis-a-vis a demand being quashed. The Supreme Court held:- "While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in the restoration of the position as it stood on the date of passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from the date of passing of the stay order and it does not mean that the said order has been wiped out from existence." The Supreme Court held that the effect of an interim order staying the operation of the order under challenge only makes the said order inoperative from the date of the passing of the stay order and does not wipe out the said order from its existence. On the other hand, an order, which is quashed results in the restoration of the position as it stood on the date of the passing of the order, whi....