Jeevan Reddy, J.
1. The petitioners are dealers in groundnut oil, etc. Groundnuts are covered by item 6 of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957. The petitioners along with other dealers filed a batch of writ petitions in this Court challenging the entry on the ground that the point of levy of tax is uncertain and therefore the entry is not effective. Having filed the writ petitions the petitioners applied for stay of collection of tax. This Court, however, ordered that assessment shall be completed but that the tax shall not be collected pending orders of this Court. The batch of writ petitions were later dismissed in toto, against which order the petitioners went to the Supreme Court admitted the appeals and granted stay in the first instance but subsequently on the application of the State, the Supreme Court directed the petitioners to pay tax due in three equal quarterly instalments. The petitioners have accordingly paid the tax. Subsequently the appeals before the Supreme Court were also dismissed. The department thereupon issued notices to the petitioners calling upon them to pay the interest as per section 16(3) of the Andhra Pradesh General Sales Tax Act for period commencing from the date of service of the notice of assessment till the date of payment of tax. This demand was again questioned by way of appeals by the petitioners and both the appellate authorities have negatived their complaint. Hence this batch of T.R.Cs.
2. Section 16(1) of the Andhra Pradesh General Sales Tax Act says that 'the tax assessed under this Act ..... shall be paid by the dealer in such manner, and within such time, not being less than fifteen days from the date of service of the notice of assessment ...... as may be specified in such notice'.
3. The Rules provide that the notice of assessment shall be served in form B-3. Form B-3, in so far as it is relevant, reads as follows :
'Take notice that you have been finally assessed under the Andhra Pradesh General Sales Tax Act, 1957,, to a tax and surcharge on such tax of Rs. ........ (Rupees .......) (in words) only for the year ending ..... and that, after deducting the total amount of the monthly payment(s) already made by you towards the tax and surcharge on such tax for that year, you have to pay a (further) sum of Rs. .... (Rupees ....) (in words) only. This balance of tax and surcharge on such tax shall be paid within thirty days from the date of service of this notice -
by money order to the undersigned or
by cheque (demand draft) in favour of undersigned or
by remittance into the Government Treasury at .... or to the Deputy Commercial Tax Officer/Assistant Commercial Tax Officer/Bill Collector, failing which the amount will be recovered as if it were an arrear of land revenue and you will also be liable to interest as provided in section 16 of the Andhra Pradesh General Sales Tax Act, 1957.
......................... Place : Date : Assessing Authority. NOTE : .................... Note : Where the assessing authority has, for reasons recorded in the assessment order, proposed that the dealer should pay the tax and surcharge on such tax assessed within a period of less than 30 days, he should strike out the figure 30 and not such lesser period specified in the order, and duly attest the entry.'
4. Sub-section (3) of section 16 of the Act provides for interest on unpaid tax. It reads as follows :
'(3) If the tax assessed under this act or any instalment thereof is not paid by any dealer within the time specified therefore in the notice of assessment or in the order permitting payment in instalments, the dealer shall pay in addition to the amount of such tax or instalment, interest at the rate of -
(a) half a per cent of such amount, for each month or part thereof for the first three months after the date specified for this payment;
(b) one per cent of such amount, for each month or part thereof subsequent to the first three months aforesaid.'
5. In view of the orders of stay issued by this Court, in the notices of assessment served upon the petitioners, the portion commencing with the words 'This balance of tax and surcharge on such tax shall be paid within ....' up to the words 'as provided in section 16 of the Andhra Pradesh General Sales Tax Act, 1957', were scored out.
6. The contention of Mr. T. Ramam, the learned counsel for the petitioners, is that under section 16 of the Andhra Pradesh General Sales Tax Act, interest is leviable only in case the tax assessed under the Act is not paid by any dealer within the time specified in the notice of assessment; inasmuch as the notices of assessment served upon the petitioners in these cases did not specify any time within which the tax should have been paid, the liability to pay the tax and accordingly the liability to pay interest on unpaid tax did not arise. The further contention urged by Mr. Ramam is that inasmuch as the collection of tax was stayed by this Court and by the Supreme Court, it cannot be said that tax was 'due' or that any interest is payable thereon.
7. In so far as the levy of interest is concerned, it is provided by the statute; there is no discretion in the authorities either to waive or reduce or enhance it. Construing a similar provision in the U.P. Sales Tax Act in Haji Lal Mohd. Biri Works v. State of U.P. : 1SCR25 the Supreme Court held that 'according to section 8(1-A), simple interest at the rate of 18 per cent per annum shall run of the amount of arrears of sales tax from the date specified in that sub-section. It would thus appear that the liability to pay interest is automatic and arises by operation of law. The amount of interest on the date of payment of tax is not constant, but increases from day to day'. It was also held that the liability to pay interest having been created by the statute, the Sales Tax Officer has no discretion to grant any exemption from the payment of interest.
8. In Associated Cement Co. Ltd. v. Commercial Tax Officer : 1SCR563 , the assessee, Associated Cement Company Limited, was engaged in the manufacture and sale of cement partly in Rajasthan, where its factory is situated and partly outside the State. For the period 1st August, 1973, and 31st July, 1974, it submitted returns for its turnover under the Rajasthan Sales Tax Act, 1954, as well as the Central Sales Tax Act, 1956, accompanied by challans evidencing the payment of tax in accordance with the returns. In its returns, the assessee did not include freight charges in the taxable turnover in the bona fide belief that freight charges were not liable to be included in the taxable turnover, in view of certain decisions, particularly the decision of the Supreme Court in Hyderabad Asbestos Cement Products Limited v. State of A.P. . The Supreme Court, however, subsequently held in Hindustan Sugar Mills Limited v. State of Rajasthan : 1SCR276 that freight charges form part of the sale price. Within two months of the decision of the Supreme Court in Hindustan Sugar Mills Limited v. State of Rajasthan : 1SCR276 the assessee filed revised returns including the freight charges in the taxable turnover and also deposited along with the revised returns the balance of the sales tax payable under the State and the Central Acts. In this situation the question arose whether the assessee was liable to pay interest on the delayed payment of sales tax relatable to freight charges. The Supreme Court held, by majority, that the freight charges had to be included in the original returns and the tax paid thereon and that the mere fact that the liability with respect to freight charges was in doubt or was the subject-matter of adjudication before the Supreme Court cannot be a ground for withholding the tax. It was also observed that the decision of the Supreme Court in Hindustan Sugar Mill's case : 1SCR276 did not create any new liability but only declared the existing liability. It was, therefore, held that since the amount of tax relatable to freight charges was not paid within the time prescribed, interest was payable under section 11B of the Rajasthan Sales Tax Act.
9. These decisions make it clear that the mere existence of stay order does not prevent the accrual of the interest under the statute. Hence, where a person obtained a stay and subsequently his petition is dismissed, he is liable to pay the interest provided by the statute.
10. Mr. Ramam's main argument, however, centres round the language of sub-sections (1) and (3) of section 16. His argument is that interest is payable only after the expiry of the time prescribed in the notice of assessment and inasmuch as in the notice of assessment served upon the petitioners, no such time was prescribed, the liability to pay interest did not arise. We are, however, unable to give effect to this argument in the present cases. In the notice of assessment served upon the petitioners, the portion demanding the tax within 30 days in form B-3 was scored out by the assessing authorities, only because of the stay order issued by this Court. The authorities could not have made the said demand since any such demand would have been violative of the orders of this Court and would have amounted to contempt. The petitioners, thus having disabled the assessing authorities from making the demand as contemplated by section 16(1) and form B-3, cannot turn round and say that they are not liable to pay interest because of the absence of such demand. We may, in this connection, take analogy of a case where a dealer obtains a stay, with the result that the assessment cannot be made within four years as prescribed by the statute. His writ petition or appeal, as the case may be, is dismissed after four years and thereafter an assessment is made : Can he, in such a case, be permitted to contend that inasmuch as the assessment has been made beyond four years prescribed by the statute, the assessment is invalid The answer can on be - no. And, in our opinion, the same answer holds good, with equal force, in the present cases. This is not simple case where a truncate notice of assessment is served, without a demand for tax due. In this case the assessing authorities were disabled from making such a demand because of the stay orders obtained from this Court by the petitioners themselves and having so disabled the assessing authorities, they cannot be allowed to say that the liability to pay interest did not arise.
11. Mr. Ramam concedes that if a proper notice of assessment in form B-3 was served and thereafter a stay had been obtained from a court, which is subsequently vacated, the petitioners would have been liable to pay interest. But what he says is that inasmuch as in this case there is no demand to pay the tax within a particular period, no such liability arises. We are unable to see any distinction in principle between both the cases. In these cases, tax was assessed and became due and payable but a formal demand could not be made because of the orders of this Court. But for the orders of this Court, form B-3, in the usual form, would have been served. Giving effect to the petitioner's argument would amount to conferring an unfair and unintended benefit upon the petitioners. Having failed in the writ petitions and in the appeals before the Supreme Court, the petitioners cannot still claim any immunity under the interlocutory orders made in such writ petitions/appeals. This Court and the Supreme Court having found no merit in the petitions and appeals and having dismissed them in toto, could not have intended to confer any partial or incidental benefit upon the petitioners. Once the main cases dismissed, the petitioners cannot find any rights or claim, any immunity from the statutory obligations by virtue of or on account of the interlocutory orders made in such cases. Having failed before the courts in toto the petitioners cannot yet claim some partial success, because interlocutory orders cannot stand apart from or higher than the orders in the main cases.
12. For the above reasons, the tax revision cases fail and are accordingly dismissed. No costs. Advocate's fee Rs. 2,000 consolidated.