JUDGMENT P. KRISHNAMOORTHY J. - These two cases were referred to a Full Bench as the issue involved in these cases, namely, the exigibility to penal interest under section 23(3) of the Kerala General Sales Tax Act, 1963, has already been referred to a Full Bench in M.F.A. No. 4 of 1983 and other connected cases. Accordingly these two cases were heard along with the other cases. But in these two cases certain other questions also arise for consideration and accordingly they are being dealt with separately. 2. In both these original petitions there is a prayer to declare section 23(3) of the Kerala General Sales Tax Act as unconstitutional and of no effect and void. In O.P. No. 9277 of 1983, the petitioner is a registered dealer in cashewnuts and an assessee on the file of the 2nd respondent. For the assessment year 1980-81, the petitioner had opted for the procedure prescribed under rule 21 of the Kerala General Sales Tax Rules, 1963 and was accordingly filing monthly returns of his turnover. For the months of May and June, 1980, the assessee claimed exemption from sales tax on the purchase turnover of cashewnuts under section 5(3) of the Central Sales Tax Act, 1956, on the ground that the purchase was one in the course of export as it was the last purchase preceding the export of the goods outside the territory of India in compliance with an anterior order in relation to the export. The claim for exemption was rejected by the Sales Tax Officer and he passed an order of provisional assessment for the aforesaid two months, exhibit P1 order dated December 31, 1980. Against exhibit P1 order the petitioner filed an appeal and by exhibit P2 order dated November 17, 1981, the Deputy Commissioner (Appeals) held that the period for which the provisional assessment was made had already run out and the assessment is ripe for finalisation. Accordingly he directed the Sales Tax Officer to finalise the assessment as early as possible. It was further directed that the contentions put forward by the assessee could also be duly considered at, that stage. 3. Accordingly he directed the Sales Tax Officer to finalise the assessment as early as possible. It was further directed that the contentions put forward by the assessee could also be duly considered at, that stage. 3. Petitioner alleges that till the filing of this original petition no final order of assessment has been passed but revenue recovery proceeding were initiated for realisation of the amount due under exhibit P1 together with penal interest under section 23(3), by issuing exhibit P3 notice. Petitioner further alleges that out of the total demand of Rs. 1,32,154.65 made in exhibit P3, an amount of Rs. 47,049.35 represents penal interest. Petitioner is challenging the levy of penal interest in this original petition on the ground that section 23(3) is itself unconstitutional and also on the ground that it cannot be recovered unless a notice of demand in form 24 of the Kerala General Sales Tax Rules is served on the assessee. It is his further contention that only if default is made after issuing a notice in form 24, the liability to penal interest will accrue and that exhibit P3 is liable to be quashed as he is not a defaulter. 4. Respondents have filed a counter-affidavit in O.P. No. 9277 of 1983 in which the allegation that portion of the amount demanded under exhibit P3 represents penal interest is not disputed. According to the respondents, section 23(3) of the Act is constitutionally valid and liability to penal interest is automatic on the occurrence of default. According to them no further demand is necessary and the mere non-payment of tax in pursuance to provisional assessment is sufficient to fasten a liability of penal interest on the assessee. 5. O.P. No. 2361 of 1984 relates to levy of penal interest for the year 1978-79. Exhibit P1 dated July 14, 1983, is the final order of assessment by which the total tax due from the petitioner was fixed at Rs. 4,97,490.18. The assessee had already paid an amount of Rs. 5,42,660 and thus he had paid an excess amount of Rs. 45,169.82. Exhibit P1 further states that the excess will be adjusted towards the tax due for the year 1979-80. Exhibit P1 order further imposes an amount of Rs. 58,332.54 as penal interest for that year. 4,97,490.18. The assessee had already paid an amount of Rs. 5,42,660 and thus he had paid an excess amount of Rs. 45,169.82. Exhibit P1 further states that the excess will be adjusted towards the tax due for the year 1979-80. Exhibit P1 order further imposes an amount of Rs. 58,332.54 as penal interest for that year. Petitioner is challenging exhibit P1 to the extent it imposes penal interest for the aforesaid amount, on the ground that section 23(3) of the Act is unconstitutional and that no notice demanding the amount in form 14 was served on them. It is also contended that by exhibit P1 the final assessment having been made, holding that the petitioner has paid an excess amount of nearly Rs. 45,000, no penal interest can be levied towards non-payment of the amount due under the provisional assessment. 6. A counter-affidavit has been filed on behalf of the 2nd respondent. It is stated therein that for the assessment year 1977-78 the net turnover in respect of the petitioner was fixed at Rs. 3,06,25,251.97. But in the return furnished in form 10 for the purpose of provisional assessment for the year 1978-79, the assessee returned a taxable turnover of Rs. 1,66,00,000 only. After calling for the accounts and scrutinising the same, the return was rejected and the provisional assessment for the year 1978-79 was completed to the best of judgment by order dated June 2, 1978, fixing a taxable turnover at Rr. 3,85,67,000. Accordingly the monthly rate of tax, additional sales tax and surcharge to be paid was also fixed. A demand notice for the aforesaid amount was also served on the petitioner on July 17, 1978. But the amount of provisional tax was not remitted within the time fixed in the demand notice and on October 19, 1978, the petitioner submitted an application for revising the provisional assessment on the ground that the turnover assessed was too high on the basis of the actual for the preceding month. By order dated November 3, 1978, the provisional assessment for the year 1978-79 was revised, fixing the taxable turnover at Rs. 2,05,50,000 and accordingly the monthly rate of tax, additional tax and surcharge was also fixed. A demand notice was duly served on the petitioner on November 3, 1978. Even this amount was not paid by the petitioner on the due dates. 2,05,50,000 and accordingly the monthly rate of tax, additional tax and surcharge was also fixed. A demand notice was duly served on the petitioner on November 3, 1978. Even this amount was not paid by the petitioner on the due dates. Ultimately the final assessment order for the year 1978-79 was passed on July 14, 1983, by which the taxable turnover for the year was fixed. Since the assessee failed to pay the tax demanded as per the provisional assessment order on the due dates, penal interest became due and the same was computed as Rs. 58,332.54. Along with the counter-affidavit a detailed statement showing the basis of calculation of penal interest as aforesaid is also produced and marked as exhibit R2(a). It is stated in the counter-affidavit that the final assessment for the year 1978-79 was revised in appeal and as per the revised assessment order the tax, additional tax and surcharge due from the petitioner were fixed at Rs. 4,49,446.45, Rs. 45,494.64 and Rs. 35,955.72, respectively. It is further admitted in the counter-affidavit that the amount paid under the provisional assessment for the year 1978-79 exceeded the dues as per the final assessment, but as the petitioner had not paid monthly provisional demand on the due dates, they are liable for penal interest for the belated payment of the provisional tax as per the provisions contained in the Act. It was contended that the Sales Tax Act or the Rules do not contemplate any prior notice for the liability to pay penal interest. Accordingly the respondents prayed for dismissal of the original petition. 7. In both these cases the main contention that was raised by counsel for the petitioners was that the liability to pay penal interest is not automatic and that it will accrue only from the date on which a demand is made from the assessee of the tax due in any one of the forms mentioned in the Sales Tax Rules, as contemplated under rule 18 or rule 21. On this question an earlier Division Bench of this Court in Haridas v. Assistant Commissioner, Sales Tax [1979] 44 STC 26; (1979) KLT 212 took the view that the liability for penal interest is automatic on the tax becoming due and that it is not dependent on any demand made by the sales tax authorities. On this question an earlier Division Bench of this Court in Haridas v. Assistant Commissioner, Sales Tax [1979] 44 STC 26; (1979) KLT 212 took the view that the liability for penal interest is automatic on the tax becoming due and that it is not dependent on any demand made by the sales tax authorities. But a later Division Bench decision of this Court in Joy Varghese v. State of Kerala [1986] 62 STC 227 held that notice of demand is necessary before the liability to penal interest under section 23(3) starts. In the connected case, namely, O.P. No. 3501 of 1986 (Since reported - See P. C. Abdulla v. Sales Tax Officer [1992] 86 STC 259 supra), which was heard along with these original petitions, we have already held that the later decision reported in [1986] 62 STC 227 (Joy Varghese v. State of Kerala) does not lay down the correct law and that accrual of penal interest under section 23(3) is automatic and that it is not dependent on any demand being made by the sales tax authorities for payment of that amount. We have decided the question after considering the scope of section 23(3) of the Act read along with rules 18, 21 and 31 of the Kerala General Sales Tax Rules. As we have already taken that view in the connected case, the first point raised by the petitioners in these two original petitions has only to be rejected. 8. In both the cases though there is a prayer for declaring section 28(3) as unconstitutional, no grounds were urged before us to come to the conclusion that the section is in any way invalid. 9. Counsel for the petitioner in O.P. No. 9277 of 1933 contended that in O.P. No. 2396 of 1978 and two other connected cases, the provisions of section 23(3) were attacked before this Court on the ground that they were opposed to articles 14, 19(1)(f) and (g) and article 31(1) of the Constitution of India and when the cases came up for hearing before a Division Bench, the State conceded that the penal interest demanded in those cases would not be collected. It is contended by counsel that this fact was taken note of by a Division Bench of this Court in the decision reported in Aman Traders v. State of Kerala [1987] 66 STC 54 and the cases considered therein were disposed of on that basis. It is to be noted that O.P. No. 2396 of 1978 and the connected cases were decided solely on the basis of the statement made by the Government that the levy of penal interest would not be enforced as against the petitioners therein whereas in this case the Government Pleader was not prepared to give up the claim of penal interest. It is also not possible to accept the contention raised by counsel for the petitioner that Aman Traders case [1987] 66 STC 54 was decided solely on the basis of the concession made by the Government Pleader in O.P. No. 2396 of 1978. Though the Division Bench noted such a fact, actually the liability of the petitioners therein under section 23(3) of the Sales Tax Act was considered on the basis of the facts in those cases and not on the basis of the previous concession made by the Government Pleader in O.P. No. 2396 of 1978. In paragraphs 6 to 9 of that decision (Aman Trader's case) [1987] 66 STC 54 (Ker) each individual case has been considered and decision rendered on the merits of each case. It is further to be noted that in paragraph 9, while considering O.P. No. 3001 of 1980, the Division Bench observed that there is no special feature in that case except the fact that the final assessment had been set aside in appeal and the petitioner was directed to claim relief under sub-sections (4) to (6) of section 23. Without prejudice to that right, O.P. No. 3001 of 1980 was dismissed. It is clear from the above paragraphs that the Division Bench decided the cases not on the basis of the concession made by the Government Pleader that section 23(3) will not be enforced, but on the fact of each case. 10. No other grounds have been made out in this case which absolve the petitioner from the liability to pay penal interest under section 23(3) of the Kerala General Sales Tax Act and accordingly it is not possible to give any relief to the petitioner. 11. 10. No other grounds have been made out in this case which absolve the petitioner from the liability to pay penal interest under section 23(3) of the Kerala General Sales Tax Act and accordingly it is not possible to give any relief to the petitioner. 11. It is said that after the filing of the original petition (O.P. No. 9277 of 1983), the final order of assessment has already been passed and that the tax due thereunder has been paid by the petitioner. The order of final assessment is not produced and we are not in a position to know as to what was decided therein. In these circumstances, the petitioner is not entitled to any relief at present and the original petition has only to be dismissed. But it is made clear that we have not expressed any opinion on the question as to whether the petitioner is entitled to any exemption under section 5(3) of the Central Sales Tax Act which the petitioner will be at liberty to agitate in the appropriate forum. We are concerned in this original petition only with levy of penal interest made in exhibit P3 demand. 12. In O.P. No. 2361 of 1984, petitioner raised a contention, that from the final order of assessment, evidenced by exhibit P1, it can be seen that they had paid the total tax due and that they had even paid an excess amount of Rs. 45,169.82. It is the petitioner's contention that in view of the final assessment order fixing their liability to tax, they are entitled to the benefit conferred under section 23(4) to (6) and that no penal interest can be levied in such circumstances. Sub-sections (4) to (6) of section 23 were introduced in the Sales Tax Act only by the Kerala General Sales Tax Amendment Act, 1980 (Act 19 of 1980) which came into force on September 16, 1980. The learned Government Pleader contended that the provisions of sub-section (4) to (6) of section 23 which came into force on September 16, 1980 cannot be applied for the assessment in regard to any assessment year previous to that date. The assessment year in question is 1978-79. The question to be considered is as to whether the provisions of sub-sections (4) to (6) of section 23 will apply to the case on hand. 13. The assessment year in question is 1978-79. The question to be considered is as to whether the provisions of sub-sections (4) to (6) of section 23 will apply to the case on hand. 13. It will be advantageous at this stage to quote the relevant provisions of sub-sections (3) to (6) of section 23 of the Kerala General Sales Tax Act : "(3) If the tax or any other amount assessed or due under this Act is not paid by any dealer or other person within the time prescribed therefor in this 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, as the case may be, or if payment is permitted in instalments by any of the authorities empowered in this behalf, any such instalment is not paid within the time specified therefor, the dealer or other person shall pay, by way of penal interest, in the manner prescribed, in addition to the amount due, a sum equal to, (a) one per cent of such amount for each month or part thereof for the first three months after the date specified for its payment; (b) two per cent of such amount for each month or part thereof subsequent to the first three months aforesaid. (4) Where, as a result of any order in appeal or revision or any rectification under section 43, any dealer or other person is not liable to pay the tax assessed or any other amount, the levy of penal interest for the non-payment of such tax or other amount shall be cancelled and if any amount of such penal interest has been collected, it shall be refunded to the dealer or other person as the case may be. (5) Where, as a result of any order in appeal or revision or any rectification under section 43, any tax assessed or any other amount due from any dealer or other person has been reduced, the penal interest levied for the non-payment of such tax or other amount shall be proportionately reduced and if, any amount of penal interest in excess of such reduced penal interest has been collected, such excess shall be refunded to the dealer or other person, as the case may be. (6) The provisions of sub-sections (4) and (5) shall, so far as may be, apply, in respect of penal interest levied for the non-payment of tax provisionally assessed which has been reduced in part or in full as a result of final assessment." Section 23(4) provides that if in appeal or in revision or by any rectification under section 43, any dealer or other person is not liable to pay the tax assessed or any other amount, the levy of penal interest for non-payment of such tax or other amount shall be cancelled and the assessee will be entitled to a refund of any amount of penal interest collected. Sub-section (5) provides for cases where in appeal or revision the amount due from any dealer or other person has been reduced and further provides that the penal interest levied shall be proportionately reduced and proportionate refund made. Sub-section (6) provides that the provisions of sub-sections (4) and (5) shall so far as may be, apply in respect of penal interest levied for the non-payment of tax provisionally assessed which has been reduced in part or in full as a result of final assessment. On a reading of these three sub-sections, it is clear that if by the final assessment the tax payable by the assessee is fixed at an amount less than the amount which he was provisionally assessed to, the liability for penal interest shall also he proportionately reduced and if it is already paid, he will be entitled to a refund. On a plain reading of the section, we are clearly of the opinion that sub-sections (4) to (6) will apply also to previous assessment years when the liability under the provisional assessment is extinguished or reduced by the final assessment order after these sub-sections came into force. Sub-sections (4) to (6) of section 23 will come into operation only when an order is passed in appeal or in revision. These sub-sections provide that the liability for penal interest has to be varied, if there is any variation in the amount of tax payable as a result of any order in appeal so that if by any order in appeal the tax payable is varied, the assessee will be entitled to a complete reduction of the penal interest or a proportionate reduction. Under sub-section (6), the assessee will be entitled to the same benefits, if by the final assessment the provisional tax liability is reduced in part or in full. 14. In this case though the assessment year is 1978-79, the final assessment order by which alone sub-section (6) will come into operation was passed only on July 14, 1983, i.e., after the coming into force of sub-sections (4) to (6) and accordingly the petitioner will be absolved from the liability for penal interest to the extent by which tax was reduced by the final assessment order. In this connection the observations of their Lordships of the Supreme Court in Kapur Chand v. B. S. Grewal, Financial Commissioner AIR 1965 SC 1491 are apposite : "No doubt a statute must be applied prospectively. But a statute is not applied retrospectively because a part of the requisites for its action is drawn from a moment of time prior to its passing. The clause in question makes a particular conduct the ground for an application for eviction. The necessary condition for the application of section 9(1)(ii) may commence even before the Act came into force and past conduct, which is as relevant for the clause as conduct after the coming into force of the Act, cannot be overlooked. The Tribunals were, therefore, right in considering conduct of the appellant prior to the coming into force of section 14-A while determining whether the appellant was irregular in paying the rent." 15. The Financial Memorandum in the Statement of Objects and Reasons for the Amendment Act 19 of 1980 would also indicate that the provisions of section 23(4) to (6) were intended to have a retrospective operation. 16. The matter can be looked from another angle as well. The law is that the liability to pay penal interest attaches automatically to the demand for tax whether it is provisional or final, when default occurs in payment thereof. Even if the order is erroneous and whether it is disputed or not, the liability to pay penal interest will continue. There was no provision prior to Act 19 of 1980 to make allowances for variation in the tax liability by the appellate or revisional orders. Even if the order is erroneous and whether it is disputed or not, the liability to pay penal interest will continue. There was no provision prior to Act 19 of 1980 to make allowances for variation in the tax liability by the appellate or revisional orders. Before the amendment Act the position was that the assessing authority could assess a dealer according to his best judgment and even if the assessment was subsequently set aside, the liability of the dealer to pay penal interest under the illegal assessment would survive. It is well-settled that a provisional order of assessment will not merge in the final assessment order though for the purpose of tax liability the final order of assessment may he decisive. See Haridas v. Assistant Commissioner, Sales Tax [1979] 44 STC 26 (Ker); (1979) KLT 212 and Hajee Mohammed v. Assistant Commissioner of Sales Tax [1980] 46 STC 134 (Ker); (1980) KLT 285. It is to cure this defect or to remove the anomaly that the Sales Tax Amendment Act 19 of 1980 was enacted by introducing sub-sections (4) to (6) of section 23 by which if in appeal or in revision or by a final assessment the liability to tax is reduced, relief has to be given to the assessee in respect of the penal interest for the amount of tax which was reduced in appeal or in revision or by the final assessment. Thus the amending Act and the provisions introduced thereby can be treated as a remedial statute and a liberal interpretation has to be given to the provisions therein. The object sought to be achieved by the Amendment Act is to exonerate the assessees from the liability to pay penal interest on the amount of tax which is not actually due from them under the final assessment though due under the provisional assessment. 17. Crawford in giving reasons for the liberal construction of remedial statutes has said as follows : "Such statutes play an important part in the jurisprudence of an advancing society. They supply the defects and abridge the superfluities in pre-existing law, which arise from the general imperfection of all human laws, from change of time and circumstances, from the mistakes and unadvised determinations of judges, and from any other cause. They supply the defects and abridge the superfluities in pre-existing law, which arise from the general imperfection of all human laws, from change of time and circumstances, from the mistakes and unadvised determinations of judges, and from any other cause. They serve to keep our system of jurisprudence up-to-date and in harmony with new ideas or conceptions of what constitute justice and proper human conduct. Their legitimate purpose is to advance human rights and relationships. Unless they do this, they are not entitled to be known as remedial legislation nor to be liberally construed. Manifestly, a construction which promotes improvement in the administration of justice and the eradication of defects in our system of jurisprudence, should be favoured over one which perpetuates wrong. It seems proper to assume that the law-makers intended to advance our laws forward as far as our conceptions of justice and proper conduct extend. For this reason, if no other, remedial legislation is entitled to a liberal construction." 18. A remedial Act though not necessarily retrospective will have retrospective effect if it is clear from the express terms or by necessary intendment as could be seen from the provisions. On the setting and intendment of sub-sections (4) to (6) of section 23, we are clearly of the opinion that the aforesaid provisions will apply to the case of the petitioner and the liability for penal interest, if any, will have to be recomputed in the light of exhibit P1 order. 19. From the available materials in O.P. No. 2361 of 1984, it is not possible to decide as to whether the petitioner will be liable to pay penal interest at all or whether their liability will have to be reduced. It is a matter which the 2nd respondent will have to decide afresh, in the light of sub-sections (3) to (6) of section 23 and in the light of exhibit P1, the final order of assessment. 20. In the result, O.P. No. 9277 of 1983 is dismissed. O.P. No. 2361 of 1984 is allowed and exhibit P1 order to the extent it imposes a penal interest Rs. 58,332.54 is quashed. 20. In the result, O.P. No. 9277 of 1983 is dismissed. O.P. No. 2361 of 1984 is allowed and exhibit P1 order to the extent it imposes a penal interest Rs. 58,332.54 is quashed. The 2nd respondent will be at liberty to decide afresh the question as to whether the petitioner is liable to pay penal interest at all or is liable to pay any lesser amount, in the light of sub-sections (3) to (6) of section 23 of the Kerala General Sales Tax Act, taking into account the final order of assessment. There will be no order as to costs. O.P. No. 9277 of 1983 dismissed. O.P. No. 2361 of 1984 allowed.