JUDGMENT G. SIVARAJAN, J. – Petitioners are the partners of a firm "M/s. Universal Traders", which carried on business in hill produce. The said firm was an assessee to sales tax under the Kerala General Sales Tax Act. It is stated that the business of the firm was closed with effect from March 31, 1991 and all the assessments as on that date were completed and the tax due were also paid. It is also stated that the security deposit of Rs. 5,000 was also returned on July 31, 1996. 2. Petitioners are aggrieved by the demand notices, exhibits PI and P2 issued under sections 7 and 34 of the Kerala Revenue Recovery Act demanding a total sum of Rs. 99,083 as penal interest for the years 1987-88 and 1988-89. It is stated that the assessments for the years 1987-88 and 1988-89 were completed by the assessing authority on September 30, 1992 and November 9, 1992 respectively, evidenced by exhibits P3 and P4. It is also stated that the tax due as per the said assessment orders comes to Rs. 89,099 (Rs. 45,462 for 1987-88 and Rs. 43,637 for 1988-89). Since the petitioners failed to remit the amount due as per the orders, the first respondent issued direction to the second respondent to collect the amount with penal interest thereon at the rate of 2 per cent from April 7, 1993. Exhibit P5 is the revenue recovery notice issued by the second respondent. It is stated that the petitioners filed exhibit P6 petition before the Government and the Government issued exhibit P7 communication granting, instalments based on which the petitioners remitted the entire amount and the statement showing the details of payment is produced as exhibit P8. It is stated that the petitioners submitted exhibit P9 petition before the first respondent asking him to withdraw exhibits P1 and P2 notices. Since the first respondent has not withdrawn the said notices the petitioners filed this original petition seeking to quash exhibits P1 and P2 demand notices. 3. Learned counsel appearing for the petitioners submitted that the tax assessed as per exhibits P3 and P4 assessment orders relate to turnover tax under section 5(2A) of the Kerala General Sales Tax Act. Since the first respondent has not withdrawn the said notices the petitioners filed this original petition seeking to quash exhibits P1 and P2 demand notices. 3. Learned counsel appearing for the petitioners submitted that the tax assessed as per exhibits P3 and P4 assessment orders relate to turnover tax under section 5(2A) of the Kerala General Sales Tax Act. He also submitted that the petitioners did not admit the liability to turnover tax in the returns filed by them and therefore till the assessing authority completes the assessment and demand is raised it cannot be said that the petitioners were liable to pay turnover tax. He further submitted that pursuant to exhibits P3 and P4 orders and the demand raised, the petitioners had remitted the tax and penal interest due as per the said orders in instalments. Learned counsel also submitted that the petitioners are not liable to pay any penal interest for the period prior to the demand notices issued pursuant to exhibits P3 and P4 orders. Learned counsel in support of the said contention relied on the decision of this Court in Joy Varghese v. State of Kerala [1986] 62 STC 227 and also the decision of the Supreme Court in State of Kerala v. Joy Varghese [1999] 112 STC 651; (1997) 5 KTR 372. 5. A statement is filed on behalf of the first respondent. There is nothing to show in the said statement that the petitioners had admitted the liability to turnover tax in the return filed by the company for the years 1987-88 and 1988-89. It is seen that the petitioners filed O.P. No. 16264 of 1992 against the turnover tax liability for the said two years, which was dismissed by this Court on April 7, 1993 along with a batch of writ petitions. 6. 1 have heard the learned Government Pleader also. Admittedly the petitioners did not admit the liability to turnover tax in the return filed by the company. The question regarding the liability to turnover tax was also pending consideration in various writ petitions. If the returns filed by the petitioners were not acceptable the assessing authority should have completed the assessments and should have raised the demand. Admittedly the petitioners did not admit the liability to turnover tax in the return filed by the company. The question regarding the liability to turnover tax was also pending consideration in various writ petitions. If the returns filed by the petitioners were not acceptable the assessing authority should have completed the assessments and should have raised the demand. Since the petitioners have denied the liability to pay turnover tax in the returns filed by them until and unless an assessment is completed rejecting the return and default is committed in payment of tax due as per the said assessment order, the petitioners cannot be made liable for penal interest. The decision of this Court in Joy Varghese v. State of Kerala [1986] 62 STC 227 and that of the Supreme Court in State of Kerala v. Joy Varghese [1999] 112 STC 651; (1997) 5 KTR 372 squarely apply. Accordingly it has to be held that exhibits P1 and P2 demand notices demanding arrears of penal interest for the period prior to the demand notices issued pursuant to exhibits P3 and P4 assessment orders cannot be sustained. I accordingly quash exhibits P1 and P2 demand notices. The original petition is allowed as above. Order on C.M.P. No. 29394 of 1997 in O.P. No. 16465 of 1997-1 dismissed. Petition allowed.