Judgment A.R. Lakshmanan, J.—These three appeals are directed against the final judgment and order passed by the High Court of Judicature of Bombay in Writ Petition Nos. 3754/2000, 3753/2000 and 3898/2000. The common questions that arise in these appeals are as to whether the State of Maharashtra is empowered to charge from the liquor licencees, under the Bombay Prohibition Act, 1949 (hereinafter referred to as "the Prohibition Act"), at whose premises Government staff is posted for supervision as per the provision of Section 58A, are governed by the Maharashtra Civil Services (Revised Pay) Rules, 1998 and other rules, resolutions made by the State Government under the power vested in it by the proviso to Article 309 of the Constitution, to fix the pay and other allowances of its employees, for levy and recovery of the cost of supervision to be paid to the State Government as contemplated under Section 58A of the Act or not? The further question may also arise as to whether the Commissioner is entitled to recover the supervision charges retrospectively and raise demands for, inter alia, arrears of supervision charges as per the circular letter No. SUC1091/197/Revised/1.1.96/13-A dated 30.7.1999 for carrying out provisions of Sections 58A and 114 of the Prohibition Act and carrying out an executive function under Article 162 of the Constitution and/or a lawful order under the Act, falling under Sections 58A and 114 of the Prohibition Act or Rule 17(43) of the Rules of 1966 and Rule 6(36) of the Rules of 1973? 2. The respondents are holding a licence in Form P.L.L. for manufacture of Indian made foreign liquor, prescribed under the provisions of the Maharashtra Distillation of Spirit and Manufacture of Potable Liquor Rules, 1966 (hereinafter referred to as "the Rules of 1966") and also holds a licence in Form C.L.I. prescribed under the provisions of the Maharashtra Country Liquor Rules, 1973 (hereinafter referred to as "the Rules of 1973") for manufacture of Country liquor, made under the provisions of the Prohibition Act. All transactions pertaining to receipt, transport, storage of spirit and manufacture, bottling and issues of the liquor manufactured are required to be under excise supervision under both of the aforesaid sets of Rules. All transactions pertaining to receipt, transport, storage of spirit and manufacture, bottling and issues of the liquor manufactured are required to be under excise supervision under both of the aforesaid sets of Rules. Under Section 58A of the Prohibition Act, the State Government is empowered to permit the manufacture and other related activities in respect of any intoxicant under the supervision of excise staff and the cost of such staff is to be paid to the State Government by the manufacturer. The cost of such staff is required to be paid to the State Government by the licensee in advance as per sub-rule (12) of Rule 17 of the Rules of 1966 and sub-rule (12) of Rule 6 of the Rules of 1973. The pay scales and other allowances of Government employees are fixed by the State Government by issue of Rules and Government Resolutions under the power vested in it by the proviso to Article 309 of the Constitution of India. The Commissioner, as empowered by the State Government, issues circulars for levy and recovery of supervision charges based on the pay scales and other allowances of the Government employees fixed by the State Government under the Rules and Government Resolutions made under Article 309 in respect of the excise staff posted for supervision. Demand notices were issued by appellant No.4 - the sub-Inspector of State Excise to the respondents to pay the differential amounts of cost of supervision on account of revision of pay-scales with retrospective effect ordered vide Government Notification, Finance Department dated 10.12.1998, as per the revised pay scales for one Sub-Inspector and two constables. By the aforesaid Notification, the State of Maharashtra had promulgated, under the power vested in it by the proviso to Article 309 of the Constitution, the Maharashtra Civil Services (Revised Pay) Rules, 1998 (hereinafter referred to as "the Rules of 1998"), whereunder the pay scales of Government employees were revised and fixed with retrospective effect from 1.1.1996. It was pointed out that because of the increase in the cost of supervision with effect from 1.1.1996, vide aforesaid Notification dated 10.12.1998, on account of revision of pay scales and transport charges of the employees posted for supervision, it was necessary to increase the said charges, which should be paid by the respondent within 15 days. It was pointed out that because of the increase in the cost of supervision with effect from 1.1.1996, vide aforesaid Notification dated 10.12.1998, on account of revision of pay scales and transport charges of the employees posted for supervision, it was necessary to increase the said charges, which should be paid by the respondent within 15 days. The respondent, vide his letter dated 2.3.1999, informed the Sub-Inspector that he had already paid the supervision charges in advance, he would not be able to pass on the burden of the differential amount to his purchasers and that he was not liable to pay the differential amount. By reminder letter dated 24.3.2000, appellant No. 4 rejected the reply of the respondent and directed him to pay the differential amount. The respondent questioning the above letter, preferred Writ Petition No. 3754/2000 in the Bombay High Court contending that inter alia, in view of the decision of this Court in Polychem Ltd. and Anr. vs. State of Maha­rashtra & Ors. reported in (1998) 6 SCC 196 , the demand notice was liable to be quashed and set aside. The appellants filed a reply to the writ petition and denied the contention of the respondent herein. The writ petition came up for admission before the High Court and the learned Judges observed that they were allowing the petition at the stage of admission itself in view of the judgment in Polychem s case (supra), without considering the submissions of the appellants that on certain facts and aspects the ratio of the Polychem judgment was not applicable to the case of the respondent, as set out in the affidavit in reply. However, learned counsel appearing for the respondents herein, contended before the High Court of Bombay that the challenge sought to be raised by them to the impugned demand notices has already been concluded in their favour in the case of J.E. Bilimoria & Sons vs. State of Maharashtra & Ors. reported in 1999 Mh.L.J. (II) 1079, wherein a similar issue was considered by the Division Bench and it was held therein that the demand notice of the differences of the supervision charges with retrospective effect was without jurisdiction. Thus, the notice in that case was quashed and set aside. reported in 1999 Mh.L.J. (II) 1079, wherein a similar issue was considered by the Division Bench and it was held therein that the demand notice of the differences of the supervision charges with retrospective effect was without jurisdiction. Thus, the notice in that case was quashed and set aside. Learned counsel further contended that the aforesaid judgment of the High Court of Bombay in J.E. Bilimoria s case (supra) has been confirmed by this Court in the case of Polychem (supra) wherein this Court was pleased to hold that the payment of supervision charges with retrospective effect was without jurisdiction and the impugned demand of differences of supervision charges retrospectively could not be sustained. Learned counsel appearing for the respondents therein (appellants herein) contended that the judgment of the Division Bench of the Bombay High Court in the case of J.E. Bilimoria (supra) was no longer a good law in view of the Full Bench judgment of the said Court in the case of Mohan Meakin Ltd. & Anr. vs. The State of Maharashtra & Ors. reported in 1993 Mh.L.J. (I) 13. The Full Bench while resolving the conflict did not approve the view taken in the case of J.E. Bilimoria (Supra) and overruled the same and confirmed the view of another Division Bench of the High Court of Bombay in the case of Gustad Mayur Irani vs. The State of Maharashtra reported in 1991 (51) ELT 232 (Bom.) [W P. No. 940/1982]. It was, therefore, submitted that the ratio of the decision in J.E. Bilimoria s case (supra) has no application in the facts and circumstances of the present case. It was further contended that under Section 58A of the Prohibition Act, the State Government has the power to recover from a licensee a cost of the staff appointed to supervise the licensed premises for excise purposes. The Maharashtra Foreign Liquor (Storage in Bond) Rules, 1954 (hereinafter referred to as "the Rules of 1964") also provide that the State Government can recover from the licensees the cost of staff appointed at the licensed premises/bonded warehouse for excise supervision. It was further urged that condition No. 3 of the licence requires the petitioners to pay such amount of cost as determined by the respondents, appellants herein, in advance before the beginning of every quarter. It was further urged that condition No. 3 of the licence requires the petitioners to pay such amount of cost as determined by the respondents, appellants herein, in advance before the beginning of every quarter. This condition is merely for administrative convenience and it does not prevent the State Government from recovering the cost of such staff subsequently, especially when both Section 58A of the Prohibition Act as well as Rule 7 of the 1964 Rules do not prescribe any time within which such cost has to be recovered. It was further contended that in view of the application of recommendations of the Fifth Pay Commission, the Dearness Allowance and other emoluments payable, inter alia, to such supervisory staff have been increased with effect from 1.1.1996 and the cost of supervision charges has proportionately gone up and this is to be recovered from the licensee. It was further submitted that the increased cost, however, has to be determined from 1.1.1996 because of the retrospective raise granted to the staff by the Government and that the licensee do not have any say in the salary and other emoluments paid to such staff. It was also contended that under Section 58A of the Prohibition Act and the relevant Rules, there is a clear existing statutory liability on the licensees to pay the cost of the supervisory staff and what is sought to be recovered from the respondents herein is the increased cost of such supervision which has been taken place from 1.1.1996 and the demand was made when the cost increased. 3. The Division Bench held that the case on hand is squarely covered by the decision of the Bombay High Court in J.E. Bilimoria s case (supra) and that the view taken by the Bombay High Court has been confirmed by this Court in Polychem s case (supra) wherein it was held that the State Government is not empowered to collect supervision charges with retrospective effect under the Prohibition Act. The Division Bench held that they are bound by the aforesaid view taken by this Court and, therefore, they have no other alternative but to quash and set aside the demand notices issued by respondent No.4 dated 22.3.2000 and 19.2.2000 in WP.No. 3753/2000 and W.P.No. 3754/2000 respectively. The Division Bench held that they are bound by the aforesaid view taken by this Court and, therefore, they have no other alternative but to quash and set aside the demand notices issued by respondent No.4 dated 22.3.2000 and 19.2.2000 in WP.No. 3753/2000 and W.P.No. 3754/2000 respectively. The writ petition was allowed and the rule made absolute in terms of prayer clause (a) in both the petitions with no order as to costs. 4. Aggrieved by the orders passed by the Bombay High Court in the above writ petitions, these appeals by way of special leave petitions were filed by the Government of Maharashtra and others reiterating the contentions raised before the Bombay High Court. 5. We heard Mr. Soil J. Sorabjee, learned Attorney General, appearing for the appellants and Mr. V.B. Joshi, learned counsel, appearing for the respondents. 6. The learned Attorney General submitted that the High Court erred in solely relying upon the judgment passed by this Court in the case of Polychem (supra) without considering the distinguishing facts and circumstances, as submitted by the appellants in the case of the respondents and without considering certain other decisions of this Court on the basis of which these appellants had submitted that the ratio of Polychem s judgment was not applicable to the case of the respondents. He further submitted that the High Court erred in not appreciating the proper effect of the concerned provisions and directions under the Act and under the Constitution which have to be considered together with relevant statutory provisions and the consequential directions. The learned Attorney General invited our attention to Sections 11,12,13 and 49 of the Act, which read as under: "11. Notwithstanding anything contained in the following provisions of this Chapter, it shall be lawful to import, export, transport, manufacture, bottle, sell, buy, possess, use or consume any intoxicant or hemp or to cultivate or collect hemp or to tap any toddy producing tree or permit such tree to be tapped or to draw toddy from such tree or permit toddy to be drawn therefrom in the manner and to the extent provided by the provisions of this Act or any rules, regulations or orders made or in accordance with the terms and conditions of a licence, permit, pass or authorisation granted thereunder. 12. 12. No person shall– (a) manufacture liquor; (b) construct or work any distillery or brewery; (c) import, export, transport or possess liquor; or (d) sell or buy liquor. 13. No person shall– (a) bottle any liquor for sale; (b) consume or use liquor; or (c) use, keep or have in his possession any materials, still, utensils, ­implements or apparatus what­soever for the manufacture of any liquor. 49. Notwithstanding anything contained in this Act, the State Government shall have the exclusive right or privilege of importing, exporting, transporting, manufacturing, bottling, selling, buying, possessing or using any intoxicant, hemp or toddy, and whenever under this Act or any licence, permit, pass, thereunder any fees are levied and collected for any licence, permit, pass, authorisation or other permission given to any person for any such purpose, such fees shall he deemed to include the rent or consideration for the grant of such right or privilege to that person by or on behalf of the State Government." 7. Our attention was also drawn to sub-section (1) of Section 114, sub-section (1), Clause (u) of sub-section (2) of Section 143 and Section 58A of the Prohibition Act read prior to 18.5.1998 which run as follows: "114(1) All duties, taxes, fines (except fines imposed by a Court) and fees leviable under any of the provisions of this Act or in respect of any licence, permit, pass or authorisation granted under it, and the cost of the supervising staff appointed under Section 58-A, may be recovered from any person liable to pay the same or from his surety, if any, as if they were arrears of land revenue. 143(1) The State Government may make rules for the purpose of carrying out the provisions of this Act or any other law for the time being in force relating to excise revenues. (2) In particular and without prejudice to the generality of the foregoing provisions, the State Government may make rules.– (u) prescribing the fees (including rent or consideration) payable in respect of any privilege, licence, permit, pass or authorisation granted or issued under this Act. 58A. (2) In particular and without prejudice to the generality of the foregoing provisions, the State Government may make rules.– (u) prescribing the fees (including rent or consideration) payable in respect of any privilege, licence, permit, pass or authorisation granted or issued under this Act. 58A. The State Government may by general or special order direct that the manufacture, import, export, transport, storage, sale, purchase, use, collection or cultivation of any intoxicant, denatured spirituous preparation, hemp, mhowra flowers, or molasses shall be under the supervision of such Prohibition and Excise or Police staff as it may deem proper to appoint, and that the cost of such staff shall be paid to the State Government by the person manufacturing, importing, exporting, transporting, storing, selling, purchasing, using, collecting or cultivating the intoxicant, denatured spirituous preparation, hemp, mhowra flowers or molasses: Provided that, the State Government may exempt any clause of persons or institutions from paying the whole or any part of the cost of such staff." 8. It is useful, in this context to refer to the relevant Rules, which read as follows: "2(3) "Excise supervision" means the supervision of foreign liquor in relation to its receipt, issues, transport and storage in bond by member of the staff of the Prohibition and Excise Department appointed in that behalf by the Commissioner. 7. Appointment of staff - The Commissioner may appoint such staff at the bonded warehouse for excise supervision as he deems necessary and the cost of such staff shall be paid to the State Government by the licensee as provided by an order under Section 58A of the Act.’’ Condition Nos. 3, 10, 11 & 12 of the Licence in Form B.W.1 granted under the Rules of 1964: 3. The licensee shall pay to the State Government, in advance, at the beginning of each quarter commencing from the date of the licence, such cost of the staff appointed at the licensed premises for the purpose of excise supervision as may be fixed by the Commissioner from time to time. 10. No foreign liquor shall be removed by the licensee from the licensed premises for consumption within the State, except with previous permission of the Collector, in writing and on payment, of excise duty and fees, and under a pass granted under the Maha­rashtra Foreign Liquor (Storage and Supply) Regulations, 1964. 10. No foreign liquor shall be removed by the licensee from the licensed premises for consumption within the State, except with previous permission of the Collector, in writing and on payment, of excise duty and fees, and under a pass granted under the Maha­rashtra Foreign Liquor (Storage and Supply) Regulations, 1964. Provided that, foreign liquor may be removed in bond by the licensee from his licensed premises for supply to another licencee holding a B.W. 1 licence in the State, under a pass granted by the Collector under the Maharashtra Foreign Liquor (Storage and Supply) Regulations, 1964. 11. The licensee shall abide by the conditions of this licence and the provisions of the Bombay Prohibition Act, 1949, and the rules, regulations and orders made thereunder. 12. The licensee shall obey all lawful ­orders issued from time to time by the Commissioner, the Collector or the ­Superintendent of Prohibition and ­Excise. The inaugural part of the Maharashtra Civil Service (Revised Pay) Rules, 1998: In exercise of the powers conferred by the proviso to Article 309 of the Constitution of India, the Governor of Maharashtra is pleased to make the following rules namely: 1. Short title:—These rules may be called the Maharashtra Civil Services (Revised Pay) Rules, 1998. Sub-rule (12) of Rule 17 of the Rules of 1966: All transactions pertaining to the receipt, transport, storage of spirit and manufacture, bottling and issues of potable liquor shall be under excise supervision. The Director may appoint such staff at the manufactory for excise supervision as is considered necessary and the cost of such staff shall be paid to the State Government by the licensee annually in advance. Sub-rule (12) of Rule 6 of the Rules of 1973: All transactions pertaining to the receipt, transport and storage of spirit and country liquor and manufacture, bottling and issues of country liquor shall be under excise supervision. The Commissioner shall, according to the direction made under Section 58A of the Act by the State Government, station such staff at the Manufactory for excise supervision as is considered necessary and the cost of such staff shall be paid to the State Government by the manufactory licensee quarterly in advance. The Commissioner shall, according to the direction made under Section 58A of the Act by the State Government, station such staff at the Manufactory for excise supervision as is considered necessary and the cost of such staff shall be paid to the State Government by the manufactory licensee quarterly in advance. Sub-rule (43) of Rule 17 of the Rules of 1966 under which the licence in Form P.L.L. has been granted to the respondent reads as under: The licensee shall abide by all rules, regulations and orders made from time to time under the Act. Under sub-rule (1) of rule 15 and sub- rule (2) of Rule 16 of the Rules of 1966, the applicant/licensee, has to give following undertaking in the application for grant or renewal of the licence to manufacture liquor, in the application in Form P.L.A. prescribed under the Rules of 1966 for grant/renewal of the licence: I/We agree to abide by the terms and conditions of the licence which may be granted/renewed, and the provisions of the Bombay Prohibition Act, 1949 and the rules, regulations and orders made thereunder. Sub-rule (36) of the rule 6 of the Rules of 1973: 6(36) A manufactory licensee shall abide by all rules, regulations and orders made from time to time under the Act. In the application from C.L.A. prescribed under rules 3(1) and 4(2) of the Rules of 1973, for grant/renewal of the C.L.I. licence, the applicant/licensee has to give the following undertaking. 4. I/We agree to abide by the terms and conditions of the licence which may be granted/renewed, and the provisions of the Bombay Prohibition Act, 1949, and the rules, regulations and orders made thereunder. Condition No.17 of the licence in Form C.L.I. prescribed under the Rules of 1973, which is granted to a manufacturer or country liquor: The licensee shall abide by the conditions of this licence and the provisions of the Bombay Prohibition Act, 1949, the rules, regulations and orders made thereunder and shall given an undertaking to that effect in Form C.L.XX. Undertaking in Form CL.XX prescribed under condition No. 17 of the licence in Form C.L.I. prescribed under the Rules of 1973: I/We... Undertaking in Form CL.XX prescribed under condition No. 17 of the licence in Form C.L.I. prescribed under the Rules of 1973: I/We... ..........hereby undertake to abide by the conditions of the licence in Form C.L.I. that may be granted/renewed in my/our favour and the provisions of the Bombay Prohibition Act, 1949 and the Maharashtra Country Liquor Rules, 1973 and other relevant rules, regulations and orders made thereunder from time to time. Signature of the licensee/applicant" 9. Learned Attorney General drew our attention to the Notification dated 10.12.1998 issued by the Finance Department of the Government of Maharashtra which runs as follows: "GOVERNMENT OF MAHARASHTRA FINANCE DEPARTMENT Mantralaya, Mumbai 400 032, dated 10th December, 1998 NOTIFICATION No. RPS 1298/C.R. 13/98/SER-10— In exercise of the powers conferred by the proviso to Article 309 of the Constitution of India, the Governor of Maharashtra hereby makes the following rules, namely :- 1. Short title and commencement (i) These rules may be called the Maharashtra Civil Services (Revised Pay) Rules, 1998. (ii) They shall be deemed to have come into force on the 1st day of January, 1996." 10. Learned Attorney General contended that the High Court of Bombay erred in not appreciating the true nature of the levy and recovery of supervision charges and of the transaction between the State Government and the licensee in respect of levy and recovery of supervision charges under Section 58A of the Prohibition Act. He further submitted that the basis on which the levy on cost of supervision was governed and the nature of the levy and recovery through executive orders were not put in issue in Polychem s case (supra). It also does not appear to have been brought to the notice of this Court that the pay scales which were revised with retrospective effect under the Maharashtra Civil Services (Revised Pay) Rules, 1998 (hereinafter referred to as "the Rules of 1998") were made by the State of Maharashtra under the powers vested in it by the proviso to Article 309 and the levy and recovery of cost of supervision from the licensee was through executive instruction based on the aforesaid Rules of 1998. It was also submitted that the question as to whether the word "cost" was used in Section 58A of the Prohibition Act as meaning "fee" in the technical sense was not canvassed in the Polychem s case (supra). It was also submitted that the question as to whether the word "cost" was used in Section 58A of the Prohibition Act as meaning "fee" in the technical sense was not canvassed in the Polychem s case (supra). According to the learned Attorney General, to recover the cost of supervision as per the pay scales of its employees from the licensees is an executive function of the State Government under Section 58A of the Prohibition Act and Article 162 of the Constitution, which is carried out by issuing circular letter dated 30.7.1999 issued by the Commissioner and, therefore, it is not a case of any legislation imposing liability with retrospective effect by a delegated authority. 11. It was argued that the licensees were well aware that they have to pay additional amounts periodically at least about once or twice in a year on account of retrospective revision of various allowances and which they had paid and, therefore, factually there was no effective representation to the licensee that the cost of supervision charges for the incoming quarter was fixed for the said quarter and will not be increased with retrospective effect. Quoting the circular letters, it was argued that the said letters establish that there was no question of any remote circumstance of increase in cost of supervision with retrospective effect in the case of the respondent including other licensees and, therefore, the High Court has erred in applying the ratio of the Polychem s case (supra) to the case of the respondent on the facts of the case submitted for consideration with reference to the above quoted circular letters according to which recovery of additional amounts towards arrears of supervision charges was effected during the previous years. 12. Learned Attorney General further submitted that the respondent was not and is not prevented from recovering this additional cost from his further sales as observed by the First Bench of the Bombay High Court in ­paragraph 13 of the judgment in Mohan Meakin s case (supra) and which view was not before this Court in the case of Polychem (supra) and, therefore, the High Court ought to have appreciated that ratio of the Polychem s judgment (supra) was, therefore, not applicable to the case of the respondents on facts as well as in law. 13. Learned Attorney General, in support of his contentions, placed strong reliance on the following judgments: 1. 13. Learned Attorney General, in support of his contentions, placed strong reliance on the following judgments: 1. Government of Andhra Pradesh vs. M/s Anabeshahi Wine and Distilleries Pvt. Ltd. reported in (1988) 2 SCC 25 (delivered on 16.2.1988). 2. J.E. Bilimoria & Sons vs. State of Maharashtra & Ors. reported in 1990 Mh.L.J. (II) 1079 (delivered on 1.8.1989). 3. Gustad Mayur Irani vs. State of Maharashtra & Ors. reported in 1991(51) ELT 232 (Bom.) (delivered on 12.9.1990). 4. Mohan Meakin Ltd. & Anr. vs. State of Maharashtra & Ors. reported in 1993 Mh.L.J. (I) 13 ( Full Bench judgment delivered on 8.9.1992). 5. M/s Vidarbha Wine Traders vs. State of Maharashtra & Ors. delivered by the High Court of Bombay on 24.2.1994. 6. Order dated 5.9.1994 passed by this Court in S.L.P. (C) No.../1994 (CC 26531) (Vidarbha Wine Tra­ders and Ors. vs. State of Maha­rashtra). 7. Polychem Ltd. & Anr. vs. State of Maharashtra & Ors. reported in (1998) 6 SCC 196 (delivered on 4.8.1998) 14. Placing reliance on the above cited rulings, the learned Attorney General, submitted that the High Court ought to have appreciated that the judgment of this Court in Polychem s case was required to be read with the decision of the Full Bench of the High Court in Mohan Meakin s case in which the earlier decision in J.E. Bilimoria s case was overruled on entirely different reasons than those given in the judgment of the High Court in Gustad Mayur Irani s case, in Writ Petition No. 2718/1991 - M/s Vidarbha Wine Traders vs. State of Maharashtra & Ors. and order dated 5.9.1994 of this Court rejecting the Special Leave Petition (c) No....../1994 (CC 26531) filed by M/s Vidarbha Wine Traders and 15 other licensees. It was further submitted that the various reasons in Mohan Meakin s case upholding the demand for recovery of differential amounts of supervision charges were not rejected on the basis of any discussion by the High Court in the impugned judgment. 15. Mr. It was further submitted that the various reasons in Mohan Meakin s case upholding the demand for recovery of differential amounts of supervision charges were not rejected on the basis of any discussion by the High Court in the impugned judgment. 15. Mr. V.B. Joshi, learned counsel appearing for the respondents, in reply, submitted that the appellants while issuing demand notice did not consider the fact that the Excise duty is to be levied on the basis of manufacturing cost and supervision charges which form part of the manufacturing cost and that the fact that the manufacturing cost is ultimately to be passed on the customers and, therefore, the manufacturers are not in a position to recover when the goods are already issued for sell and released from warehouse. He further submitted that the appellants are not entitled to recover the supervision charges retrospectively and that the supervision charges are paid well in advance at the beginning of every quarter and without payment of those charges, no manufacturing activities could be carried out. It was further submitted that the term "cost of the supervision charges" is not that equivalent to salary or wages and that the demand notice is without authority of law. He further urged that the appellants cannot recover the amount arbitrarily which is not just and proper and that since the demand notice is not legal and not maintainable, the same is not binding upon the respondents and, therefore, the respondents are not liable to pay the same and, therefore, the High Court of Bombay has rightly quashed the demand notice issued by the appellants. Mr. V.B. Joshi further urged that the question of law raised in the special leave petition is no longer res integra and it has been decided against the appellants in Polychem s case (supra). By these appeals, the appellants seek review of the aforesaid judgment of this Court long after the said judgment has become final. It was further submitted that it is totally incorrect for the appellants to submit that the decision of this Court in Polychem s case (supra) is liable to be read with the decision of the Full Bench of the High Court of Bombay in the case Mohan Meakin (supra). It was further submitted that it is totally incorrect for the appellants to submit that the decision of this Court in Polychem s case (supra) is liable to be read with the decision of the Full Bench of the High Court of Bombay in the case Mohan Meakin (supra). It was further submitted that the Full Bench decision of the Bombay High Court upheld the view taken by the Division Bench of the same High Court in Gustad Mayur Irani s case (supra), wherein it has been held that the liability to pay the supervision charges and the quantum of two different concepts that the liability is not imposed with retrospective effect but merely reduced are revised with retrospective effect. According to the learned counsel, in Polychem s case (supra), this Court had considered the judgment of the Division Bench in Gustad Mayur Irani s case (supra) as well as the conflicting judgments of the Division Bench of the same High Court in the case of J.E. Bilimoria (supra). In other words, although the Full Bench judgment in Mohan Meakin s case (supra) was not brought to the notice of this Court while deciding the same question raised in Polychem s case (supra). The reasoning given in Gustad Mayur Irani s case (supra) was considered and rejected by this Court. It was, therefore, submitted that in deciding Polychem s case (supra), this Court has impliedly overruled the decision of the High Court in Mohan Meakin s case (supra) and that the contention of the appellants that the said judgment of this Court is liable to be read with Mohan Meakin s case (supra) is without merit and deserves to be rejected. Mr. V.B. Joshi further submitted that when it has been conclusively held by the High Court that the rule making authority does not have the power to recover the supervision charges retrospectively, the appellants cannot rely on any rules enacted by any rule making authority to justify the retrospective demand which has been struck down by the High Court of Bombay. 16. Before proceeding further to consider the rival submissions, it would be beneficial to consider the various judgments cited by the learned Attorney General in its chronology. The first in the series is the judgment of this Court in the case of M/s Anabeshahi Wine and Distilleries Pvt. Ltd. (supra). 16. Before proceeding further to consider the rival submissions, it would be beneficial to consider the various judgments cited by the learned Attorney General in its chronology. The first in the series is the judgment of this Court in the case of M/s Anabeshahi Wine and Distilleries Pvt. Ltd. (supra). In this case, the respondent-Distillery obtained a distillery licence under the Andhra Pradesh Distillery Rules, 1970 and has been carrying on the business of manufacture and sale of wine and other allied products. The excise authorities posted one Inspector, one Sub-Inspector and four Constables at the respondent s factory premises and required the respondent to pay their salaries and allowances etc. in pursuance of Section 28(2) of the Andhra Pradesh Excise Act, 1968. The respondent-Distillery having failed to get any redress, filed writ petition challenging the demand on various grounds. The contentions raised on behalf of the respondent-Distillery found favour with the High Court which, by the judgment appealed against allowed the respondents writ petition. In this Court, it has been urged by the State Government that the High Court committed an error in appreciating the true nature of the demand and the demand was in the nature of price for parting with the privilege - which privilege exclusively vested with the Government. Having considered the respective submissions, this Court accepted the submission made by learned counsel for the appellant-State. Before this Court, it has not been disputed that the business which the respondent has been carrying on could not have been carried on by it unless licence had been granted to it under the said Act and the Rules. This Court, after considering the rival submissions, observed in paragraph 5 which runs as follows: "The perusal of the aforesaid provisions of the Act and the Rules leaves no manner of doubt that it was open to the appellant to grant the exclusive privilege of manufacturing and selling wine etc. to the respondent only provided it was, apart from making any other payment, also willing to pay the salaries and allowances referred to in the aforesaid provisions which for the sake of convenience have been described as establishment charges, and which were sought to be recovered as such under the impugned notice of demand. The respondent-Company was not under any obligation to take the licence. The respondent-Company was not under any obligation to take the licence. It was open to it to have refrained from taking any licence under the Act and the Rules if it was not willing to pay the price as required by the Government for the grant of privilege to manufacture and sell intoxicants. The nature of the payment which a licenses such as the respondent is required to make to the State by reason of the State parting with the privilege in regard to manufacture sale etc. of intoxicants came up for consideration before a Constitution Bench of this Court in Har Shankar vs. Deputy Excise and Taxation Commissioner. It was held that the amounts charged to the licensees are neither in the nature of tax nor excise duty, but constituted the price or consideration which the government charges to the licensees for parting with its privileges and granting them to the licensees." 17. In the case of J.E. Bilimoria (supra), the judgment was delivered on 1.8.1989 by the Nagpur Bench of the Bombay High Court. Seventeen writ petitions were filed challenging the authority of the respondent-State to recover excise duty on breakages caused in transit or in the Bonded Warehouse, by recourse to the circulars issued by the Commissioner of Prohibition and Excise and the difference in the supervision charges leviable under Section 58A of the Prohibition Act. With regard to the supervision charges, it was urged that Section 58A of the Prohibition Act vested the State Government with the power of imposing supervision charges in respect of the goods mentioned therein by the persons who were engaged in the concerned activity, and since Section 58A of the Prohibition Act imposed the liability, it was open to the State Government to vary the quantum, taking into account the circumstances, and it was not necessary to have a clear provision for recovering the amount and no question of retrospective operation of the rule or provision arose in these circumstances. The grievance of the petitioners before the High Court was that the supervision charges have actually been recovered much in excess of the actual salary of the staff employed in the licensed premises and that because there were revisions in salary of Government servants and some audit objections were raised, the respondents started taking action for recovery of supervision charges with retrospective effect from 5.5.1970 on the strength of the circular dated 7.4.1981. The Bombay High Court held that neither of these provisions clothe the State Government or the Commissioner with the authority to charge the supervision charges with retrospective effect. Obviously, when Section 58A of the Prohibition Act uses the words "the cost of such staff shall be paid to the State Government" that would have reference to the cost of the staff as obtaining for the period during which the goods are stored in the bonded warehouse and not the incidence which the State would have to bear by reason of such a remote circumstance as the upward revision of the pay scales of its own employees at a later date. The Bombay High Court held that even apart from the absence of the provisions allowing retrospective recovery, the State would be estopped from asking for the difference on the basis of unanticipated escalation in the costs of supervision at a later point of time and, therefore, the Court held that no claim for the ­difference in the cost of supervision could be made by issuing the circular dated 7.4.1981. In the result, the High Court quashed the circular and restrained the State from claiming any levy, charge or excise duty on the debonded goods on the basis of those circulars and communications. The High Court, in coming to the conclusion, relied upon the judgment in the case of M/s. Mc Dowell & Co. Ltd. vs. ­Commercial Tax Officer reported in AIR 1977 SC 1459 . (a) the assessee has furnished the return of income which he is or was required to furnish under any of the provisions of this Act; and (b) the additional amount of income-tax payable on the income disclosed in the application exceeds (at present) one hundred thousand rupees. 31. Ltd. vs. ­Commercial Tax Officer reported in AIR 1977 SC 1459 . (a) the assessee has furnished the return of income which he is or was required to furnish under any of the provisions of this Act; and (b) the additional amount of income-tax payable on the income disclosed in the application exceeds (at present) one hundred thousand rupees. 31. The other relevant requirement which has a bearing on the question involved in these appeals is sub-section (1A) of Section 245C, which provides that the additional amount of income tax payable in respect of the income disclosed in an application should be the amount calculated in accordance with the provisions of sub--sections (1B) to (1D). 32. The next stage is Section 245D which empowers the Settlement Commission to reject the application or to allow the application to proceed with within a period of one year from the end of the month in which such application was made. Rejection of such application could be only after giving an opportunity of hearing to the applicant as well as after considering the report of the Commissioner of Income Tax. If the application is not rejected and the Settlement Commission decides to proceed with the application, then the assessee is required to pay the additional amount of ­income tax payable on the income disclosed in the application within 35 days of the receipt of the copy of the order passed by the Settlement Commission. 33. The subsequent stage provided under sub-sections (2B) and (2C) to Section 245D is that if the assessee is not in a position to pay the said amount within a period of 35 days it may extend the time for payment of the amount which remains unpaid but the assessee would be liable to pay simple interest at the rate of 15 per annum on the amount remaining unpaid from the date of the expiry of the period of 35 days referred to in sub-section (2A). 34. The question which arises is whether the assessee is required to pay any interest on the amount of tax on the income disclosed before the Settlement Commission as contemplated under Sections 234A, 234B and 234C? 34. The question which arises is whether the assessee is required to pay any interest on the amount of tax on the income disclosed before the Settlement Commission as contemplated under Sections 234A, 234B and 234C? That question is concluded by a decision rendered by the Constitution Bench of this Court in Commissioner of Income Tax, Mumbai v. Anjum Ghaswala [ (2002) 1 SCC 633 ] where it was held that the interest contemplated under Sections 234A, 234B and 234C is mandatory in nature and the power of waiver or reduction having not been expressly conferred on the Commission, waiver or reduction in payment of statutory interest is outside the purview of the settlement contemplated in Chapter XIX-A of the Act. Therefore, the assessee is required to pay interest at the prescribed rate from the date when the amount became due and payable on the undisclosed income which is disclosed before the Settlement Commission, till the date of the order of entertaining such application, passed by the Settlement Commission under Section 245C. He is given 35 days' time for making such payment under sub-section (2A) of Section 245D. 35. Under Section 245H, Settlement Commission has jurisdiction to grant immunity from prosecution and penalty if the Settlement Commission is satisfied that the assessee has co-operated with it in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived. The immunity from prosecution is for any offence under the Income Tax Act or under the Indian Penal Code or under any Central Act. However, no such immunity can be granted if the prosecution is already instituted before the date of the receipt of the application under Section 245C. It also empowers the Commission to reduce the penalty as provided under the Act wholly or partly with respect to the case covered by the settlement. From this Section it can be easily inferred that the Commission has no power (a) to waive tax statutorily payable under the Act, or (b) to reduce the interest on the tax payable on the income disclosed. 36. Therefore, it cannot be contended that the assessee would be required to pay interest on the tax payable on the income disclosed by him only from the date when he files an application under Section 245C. 36. Therefore, it cannot be contended that the assessee would be required to pay interest on the tax payable on the income disclosed by him only from the date when he files an application under Section 245C. He has to pay the tax amount on the disclosed income and also the interest payable on the said tax. Further, when once the order under Section 245D is passed by the Settlement Commission to proceed with the application, he is required to pay the said amount i.e. the tax on the income subsequently disclosed and the interest payable thereon, within a period of 35 days. If that amount is not paid the Commission may extend the period of payment with a specific condition that he shall pay the same interest thereon. It is true that to that extent he would be required to pay interest on interest but the scheme of Section 245D contemplates that he has to pay tax on the disclosed income and as the Commission has no power to waive interest on the said tax, he is also required to pay the tax with interest. That means under sub-section (2A) to Section 245D the assessee would be required to pay the income tax payable on the disclosed income plus the interest payable thereon as contemplated under Sections 234A, 234B or 234C. 37. The next step is if the Commission gives further time to pay the said amount whether assessee is required to pay interest as contemplated under sub-section (2C) of Section 245D? For simplification it can be stated that once the amount is crystallized i.e. X is the tax payable on the disclosed income and Y is the interest payable thereon, on aggregate of this amount (i.e. X+Y), if the time for payment is extended by the Settlement Commission, the assessee is also required to pay the interest on the amount of 'X+Y'. That is the scheme of sub-section (2C) of Section 245D. It specifically provides that where the additional amount of income tax is not paid within the time specified under sub-section (2A) then on the amount which remains unpaid "the assessee shall be liable to pay simple interest at the rate of 15 per annum on the amount remaining unpaid from the date of expiry of the period of 35 days referred to in sub-section (2A)". It is also to be noted that under sub-section (2D) where the additional amount of income tax referred to in sub-section (2A) is not paid by the assessee within the time specified under that sub-section or the time to pay is extended under sub-section (2B) the Settlement Commission is empowered to direct recovery of the said amount with interest payable thereon under sub-section (2C) and penalty for default in making payment of such additional amount in accordance with the provisions of Chapter XVII, by the assessing officer having jurisdiction over the assessee. The aforesaid scheme of Section 245D leaves no doubt that the assessee would be required to pay the amount with interest thereon. The amount at that stage would be the tax plus interest. In such cases, there is no question of paying interest on interest because the interest which the assessee is required to pay under Sections 234A, 234B or 234C merges with the amount as provided under sub-section (2A). Dharmadhikari, J.— 38. I am in respectful agreement with the reasoning and conclusion recorded by Brother Pasayat J. in his opinion prepared by him in these appeals I, however, consider it necessary to supplement his reasons for the conclusion reached by us. Since in these appeals common questions on interpretation and extent of application of the provisions of Chapter XIX A of the Income Tax Act (for short the IT Act) 1961, are involved, I propose to discuss the questions involved by this common judgment. 39. Brother Pasayat J. has reproduced all the relevant provisions of IT Act and the questions formulated and answered by the Special Bench of the Settlement Commission constituted in accordance with the provisions contained in Chapter XIX-A of the said Act. 40. Chapter XIX-A providing forum and procedure for "settlement of cases" was introduced in the IT Act by Taxation Laws (Amendment) Act 1975 published in the Gazette of India Extraordinary Part II dated 9th May, 1973 (Pages 443 to 530). The Statement of Objects and Reasons for the Amendment reads thus: 41. 40. Chapter XIX-A providing forum and procedure for "settlement of cases" was introduced in the IT Act by Taxation Laws (Amendment) Act 1975 published in the Gazette of India Extraordinary Part II dated 9th May, 1973 (Pages 443 to 530). The Statement of Objects and Reasons for the Amendment reads thus: 41. "To unearth black-money and prevent its proliferation; to fight and curb tax evasion; to check avoidance of tax through various legal devises, including the formation of trusts and diversion of income or wealth to members of family' to reduce tax arrears and to ensure that in future, tax arrears do not accumulate; to rationalise the exemptions and deductions available under the relevant enactments, and to streamline the administrative set-up and make it functionally efficient". 42. Clause 58 of the Bill introduced in Parliament to introduce separate Chapter in the IT Act for "settlement of cases" reads thus:- "Clause 58 : This clause seeks to insert a new Chapter XIXA in the act, making provision for settlement of cases. The provisions proposed in this Chapter are mainly intended to give a statutory basis for settlements of cases which are ­necessitated at times in the interests of the revenue. However, settlement will not be allowed in cases where concealment of income or fraud is established before the making of an application for settlement. Settlements are to be made by a Committee of not less than three members of the Central Board of direct Taxes. An application for settlement once made will not be allowed to be withdrawn. The order of settlement shall provide for the terms of settlement, including any demand by way of tax, penalty or interest, the manner of payment of the sum due under the settlement, etc. It shall also provide that the settlement shall be void if it is subsequently found to have been obtained by fraud or mis-representation of facts. The Committee may, if it is satisfied that the applicant has co-operated with it in the proceedings before it and has made full and true disclosure of his income and the manner in which it has been derived, grant to the applicant immunity from prosecution and penalty. Such immunity can, however, be withdrawn later under certain circumstances. The order of settlement will be final. Such immunity can, however, be withdrawn later under certain circumstances. The order of settlement will be final. There will be a bar on subsequent applications for settlement by a person if an order of settlement provides for imposition of penalty for concealment of income or if the person has, after the order of settlement, been convicted of any offence under Chapter XXII of the Act in relation to that case." 43. On the questions formulated by the Special Bench of the Settlement Commission two main issues require consideration and answer by this Court. The first main question is what is the efficacy of the regular assessment proceedings which took place before and after the admission of the case for consideration by the Settlement Commission. The second question is what would be the extent of liability towards payment of interest on the tax due as determined in a 'case' by the Settlement ­Commission in the light of various situations of no payment of tax or delayed payment of tax in the course of regular assessment. The various situations contemplated in the IT Act have been delineated in the order of the Special­ Bench of the Settlement Commission and ­reproduced in the two separate opinions of Brother Pasayat J. 44. For answering these two main questions, it is necessary to examine the scheme of Chapter XIXA as reflected in its various provisions and the other relevant provision in sections 234A to 234C on the subject of interest chargeable in various specified circumstances on tax due. 45. For taking a case for settlement before the Settlement Commission, the word 'case' in clause (b) of Section 245A has been comprehensively defined to include proceeding under the Act for assessment or reassessment for any years and at any stage in original, appellate or revisional proceeding. The definition of 'case' excludes appeals or revisions which have not been formally admitted by the concerned authorities. This definition clause (b) of Section 245 A indicates that the Settlement Commission can take up for settlement a 'case' as defined which is pending at any stage of regular assessment proceeding before any of the authorities under the IT Act. 46. Section 245 C enables an assesses to approach the Commission by disclosing his income which he had not earlier disclosed. 46. Section 245 C enables an assesses to approach the Commission by disclosing his income which he had not earlier disclosed. On such undisclosed income which is subsequently disclosed only before the Settlement Commission, the assessee is required to submit the ­return and pay additional tax along with the application in accordance with its own assessment. Clauses (i), (ii) & (iii) of sub-section (b) of Section 245C clearly indicate the ambit of the power of Settlement Commission and provide that on such approach with disclosure of ­earlier concealed income, the Commission shall redetermine the taxable income after clubbing the earlier disclosed income, if any, and subsequently disclosed income before it. Such ­clubbing for consideration of the aggregate ­income of the relevant year, based on earlier and subsequently disclosed income has to be done in relation to the 'case' pending before the ­regular assessment authorities at the ­original, appellate or revisional stage as the case may be. 47. Clauses (a), (b) & (c) of sub-section (1C) of Section 245 C are also indicative of the scope, power and jurisdiction of the Settlement Commission. It has been provided therein that it is on the determination of the 'aggregate income' by the Settlement Commission, the tax payable for the relevant assessment year shall be calculated by giving adjustment to the tax, if any, already paid by the assessee when its case was pending at whatever stage in the regular assessment proceeding. Sub-section (1D) of Section 245 C also requires the Settlement Commission to undertake the exercise of clubbing the disclosed income, if any, of the assessee in the regular proceeding and subsequently disclosed income before the Commission and treat it as an 'aggregate income' for the purpose of determining taxable income of a particular year The Settlement Commission, thus, is empowered to this limited extent to reopen the assessment proceedings already undertaken, for settlement of 'case' before it on the basis of subsequently disclosed income and pass a composite order determining the liability of assessee towards tax, penalty and interest. This is clear from sub-section (6) of Section 245 D which requires the Settlement Commission to make an order providing for terms of settlement, indicating the demand towards tax, penalty and interest and the manner in which it shall be paid. This is clear from sub-section (6) of Section 245 D which requires the Settlement Commission to make an order providing for terms of settlement, indicating the demand towards tax, penalty and interest and the manner in which it shall be paid. The above discussed provisions make it clear that once a case is admitted by the Settlement Commission for consideration, it shall have exclusive jurisdiction to exercise all powers of regular authorities under the IT ACT for the purpose of effecting a settlement and for recovery of tax penalty and interest. Sub-section (1) & (2) of Section 245 F are important for the questions raised before us and they read thus :- "245F. (1) In addition to the powers conferred on the Settlement Commission under this Chapter, it shall have all the powers which are vested in an income-tax authority under this Act. (2) Where an application made under Section 245 C has been allowed to be proceeded with under Section 245 D, the Settlement Commissioner shall, until an order is passed under sub-section (4) of section 245 D, have, subject to the provisions of sub-section (3) of that section, exclusive jurisdiction to exercise the powers and perform the functions of an income-tax authority under this Act in relation to the case". 48. The exclusive jurisdiction which the Settlement Commission derives for exercise of powers and functions of regular income-tax authority in accordance with sub-section (1) & (2) of Section 245 F can be exercised only when the Commission makes a formal order to admit or allow the application to be proceeded with for the purpose of effecting a settlement. This is clear from the language of Sub-section (1) of Section 245 D which reads:- "245D. (1) On receipt of an application under Section 245 C, the Settlement Commission shall call for a report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission may, by order, allow the application to be proceeded with or reject the application." [Underlining for emphasis] 49. One of the questions that is posed before us in these appeals, therefore, can be easily answered on the basis of the above quoted portion as underlined of sub-section (1) of Section 245D read with sub-sections (1) & (2) of Section 245F. One of the questions that is posed before us in these appeals, therefore, can be easily answered on the basis of the above quoted portion as underlined of sub-section (1) of Section 245D read with sub-sections (1) & (2) of Section 245F. It is only when the Settlement Commission formally allows the application for being considered for "settlement" the regular assessment proceedings and recoveries initiated for tax penalty or interest pursuant thereto, shall become subject to the powers of Commission and not prior to the same. In other words, it means that mere filing of an application by the assessee for settlement and before the same is formally allowed for consideration, would have no adverse effect on the proceeding of assessment or recovery pending or initiated against the assessee under the regular procedure for assessment and recovery of dues under the IT Act. 50. The Settlement Commission has no power to waive tax or interest because as laid down in sub-section (4) of Section 245 D, it has to pass orders on the matter of determining the quantum of income and tax in accordance with the other relevant provisions of the Act applicable to the relevant assessment year or years. There is no power with the Settlement Commission to settle the "case" de hors the provisions of IT Act applicable to regular assessment because the provisions contained in scheme of settlement under Chapter XIX A as examined above, do not envisage and allow the Commission to settle a 'case' based on disclosure of income before it in any other manner. As has been found from the Statement of Objects and Reasons for introducing Chapter XIX A, which can be taken aid of for construing various provisions of the Act, the forum of Settlement Commission is constituted for 'early recovery of tax and to unearth black money'. The only impetus given to the assessee to avail the forum is to allow him to make a request to the Settlement Commission to grant immunity from prosecution and penalty in exercise of its powers under Section 245H. In all other respects, on the question of tax and interest, the Settlement Commission has to settle a 'case' in accordance with the other provisions of the Act as are applicable to regular assessment proceedings. In all other respects, on the question of tax and interest, the Settlement Commission has to settle a 'case' in accordance with the other provisions of the Act as are applicable to regular assessment proceedings. The Act does not make distinction or differentiation in treatment between the assessees who honestly disclose income and are willing to pay the tax and the other assessees who do not fully or partly disclose the income to avoid payment of tax in due time and approach the Commission for disclosure of their earlier concealed income. Such distinction or differentiation between the above mentioned two classes of assessees is not permitted by the provisions contained in Chapter XIX A, it being neither legally valid nor just. The Chapter XIX A providing settlement of cases is not intended to benefit the assessees who had not earlier honestly disclosed their income and paid the tax in due time. The settlement procedure aims to bring such assessees at par with the assessees who had honestly disclosed their income and paid the tax. The provisions of Chapter XIX A, therefore, have to be read harmoniously with other provisions of the Act and thus applied to give full effect to other relevant provisions of the IT Act which confer all powers of income-tax authority under the Act on the Settlement Commission for assessing the income and determining the tax. 51. On the second question with regard to liability towards interest in various statutorily contemplated contingencies of a 'case' brought for settlement under Chapter XIXA of the Act, it is to be noticed that after insertion of the said Chapter for Settlement of Cases, corresponding legislative changes have been effected by insertion of sections 234A and 234C in IT Act to redetermine quantum of interest payable in various contemplated contingencies under the Act. Section 234A creates liability of interest for defaults in furnishing return of income. Such interest can be charged from the assessee whose ‘case' has been ‘settled' by the Commission even though no return of ­income was filed by him for regular assessment. Sub-section (4) of Section 234A requires necessary adjustments to be given for the interest earlier charged in regular assessment and the interest chargeable after re-determination of the taxable income and the quantum of tax. Sub-section (4) of Section 234A requires necessary adjustments to be given for the interest earlier charged in regular assessment and the interest chargeable after re-determination of the taxable income and the quantum of tax. Sub-section (4) of Section 234A reads thus:- "234A.(4) Where as a result of an order under Section 154 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 263 or Section 264 or an order of the Settlement Commission under sub-section (4) of Section 245D, the amount of tax on which interest was payable under sub-section (1) or sub-section (3) of this section has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and (i) in a case where the interest is ­increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under Section 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded". 52. Similarly, necessary adjustment to be made towards interest payable on the tax due after settlement of case in case of default in payment of advance tax can be found in sub-section (4) of Section 234B which reads thus:- "234B. (4) Where, as a result of an order under Section 154 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 263 or Section 264 or an order of the Settlement Commission under sub-section (4) of Section 245D, the amount on which interest was payable under sub-section (1) or sub-section (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and (i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under Section 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded". 53. 53. All the aforesaid changes incorporated in Section 234A to Section 234B clearly indicate that interest payable on the tax due, has to be determined by the Commission after settlement of case and the starting point for charging interest would be the due date under the regular assessment proceedings and end point the date of order of the Settlement Commission. The aforesaid provisions clearly indicate that interest, if any, already paid on the tax earlier due and demanded, would be adjusted from the interest found due on the tax, as determined and quantified by the Settlement Commission. Starting point for calculating the interest has to be the due date in accordance with the procedure indicated in regular assessment and the terminal date would be the date of the order of the Settlement Commission. The assessee would have right of claiming adjustment of tax and interest paid in the intervening period. This appears to be the scheme of the Chapter XIXA as harmoniously construed with the other provisions of the Act in the light of aims and objectives for introduction of Chapter XIXA. The forum of Commission for 'Settlement of cases' is not created to put a premium on fraud or misrepresentation of tax evaders. The provisions contained in Chapter XIX A merely aim at encouraging tax payers to approach the Settlement Commission with full disclosure of their income which they had not earlier disclosed in the course of regular assessment. Such assessee who co-operate with the assessing authorities in making proper assessment of tax can be granted immunity from prosecution and penalty. There is no provision that they can be granted immunity from payment of interest on the tax assessed. Brother Pasayat J. in his two opinions separately rendered in the appeals has taken note of the decision in the case of Commissioner of Income Tax vs. Express Newspapers Limited [ 1994 (2) SCC 374 ] and Commissioner of Income Tax, Mumbai vs. Anjum Ghaswala [ 2002 (1) SCC 633 ] which authoritatively construe some of the provisions in Chapter XIXA and records its conclusions on some aspects of the question raised before us for answer. 54. 54. In the case of Express Newspapers (supra) it was found that in regular assessment for the years 1985-86, 1986-87 and 1987-1988 the assessee had fraudulently claimed certain losses and when they were being enquired into and investigated by the assessing authorities for reaching to a finality, the assessee approached the Settlement Commission for settlement of the cases. The Supreme Court was of the view that it was a case of fraud in claiming certain losses where there were none for the assessment years in question and it was not a case of any subsequent disclosure of income by the assessee. It was, therefore, held that it was not open to the assessee to avail the procedure of settlement of cases before the Forum of the Settlement Commission. While construing sub-section (4) of Section 245D, it was observed that the Commission is empowered to direct the waiver of penalty as well as interest and to direct that the tax payable in question shall be paid in prescribed instalments. 55. The decision of three Judge Bench of this Court in the case of Express Newspapers Limited (supra) came up for consideration before the five Judges Bench of this Court in the case of Anjum Ghaswala (supra) and the former case was distinguished by observing thus: "In our opinion, this observation in Express Newspapers case does not help the Commission in support of its conclusion in regard to its power under Sections 245-D(4) and (6). It is to be noted that in that case the settlement sought was with regard to Assessment Years 1985-86, 1986-87 and 1987-88. It is an admitted fact that during those assessment years, Sections 234-A, 234-B and 234-C were not in the statute book. On the contrary, the corresponding provisions existing in the statute, namely, Sections 139(8), 215(4) and 216 in terms empowered the income tax authorities to waive or reduce interest.­ It is in that context that this Court observed, in the paragraph extracted hereinabove, that under Section 245-D(4), the Commission has the power to direct the waiver of penalty as well as interest because that was within the scope of the provisions of the Act, as then existing, whereas at present and for the assessment years involved in this case, Sections 234-A, 234-B and 234-C being applicable, that observation does not apply to the cases in hand. The sentence "except to mention that the Commission is empowered to direct the waiver of penalty as well as interest..." is used in that judgment on the basis of the then existing law and to apply the same to the facts of the present case with the mandatory change in law would amount to applying those principles in Express newspapers case out of context." [Underlining by court to supply emphasis] 56. In the case of Anjum Ghaswala (supra) the main question that fell for consideration before the Supreme Court was whether the Settlement Commission has power to waive interest for non-payment or delayed payment of tax found due. The Supreme Court answered the question holding that the scheme contained in Chapter XIXA does not empower the Commission to waive interest payable for non-payment or delayed payment of tax found due. Brother Pasayat J. has also reached the same conclusion and I am in respectful agreement with the same that such waiver of interest by the Settlement Commission is neither intended in the scheme of Chapter XIX-A nor such a power can be inferred because conceding such power to Settlement Commission to waive interest would help the tax evaders who did not disclose full income at the relevant time and made a disclosure subsequently. Such interpretation would also be discouragement to an honest tax payer who fully discloses his income and on the basis of regular assessment makes payment of tax and interest. In the case of Anjum Ghaswala (supra), the five judges bench of this Court came to the conclusion that Settlement Commission has to complete the assessment proceedings and determine quantum of tax as also interest payable in accordance with the provisions applicable to regular assessment. In the case of Anjum Ghaswala (supra), the five judges bench of this Court came to the conclusion that Settlement Commission has to complete the assessment proceedings and determine quantum of tax as also interest payable in accordance with the provisions applicable to regular assessment. The observations in that case pertinent for this case read as under :- "It is no doubt true that the terminology "settlement" has a very wide dictionary meaning and in the absence of a statutory definition generally the word "settlement" in sub-section (4) of Section 245-D would give the Commission sufficient power to arrive at a settlement which it deems fit, but when the statue qualifies such expression like "settlement" with mandatory words like "in accordance with the provisions of this Act" the width of the term 'settlement' becomes subject to the mandate found in that section, which would mean that while a Commission has sufficient elbow room in assessing the income of the applicant under Section 245-D(4) it cannot make any order with a term of the settlement which would be in conflict with the mandatory provisions of the section, like in the quantum and payment of tax and/or interest. In this view of the matter, we are of the opinion that assuming that there is any room for interpretation of the provisions of Part F of Chapter XVII and Chapter XIX-A, we would hold that it would not in any manner empower the Commission to either waive or reduce interest which is statutorily payable under the provisions of Part F of Chapter XVII." 57. Brother Pasayat J. has also rightly observed that if interest on tax not paid or paid after delay is governed by different provisions on the basis of the starting point of levy of interest and the date of payment of tax, the interest will have to be demanded and recovered in accordance with the provisions applicable to regular assessment may be that the tax is redetermined by the Settlement Commission under special Chapter XIX A of the IT Act. 58. A note of caution is required to be recorded. If on quantum of income and tax earlier disclosed in regular assessment proceedings, interest had been charged on tax due, till payment no further interest will be payable for the said period on the total quantum of tax determined by the Settlement Commission and necessary adjustments would be granted. 58. A note of caution is required to be recorded. If on quantum of income and tax earlier disclosed in regular assessment proceedings, interest had been charged on tax due, till payment no further interest will be payable for the said period on the total quantum of tax determined by the Settlement Commission and necessary adjustments would be granted. Thus, in no case there would be charge of interest on interest. The interest chargeable in ­different circumstances in regular assessment proceedings will be calculated on the basis of the quantum of income and tax determined by Settlement Commission and necessary recovery and adjustments will be granted so as to avoid ­demand of any interest on interest. 59. In conclusion, two main questions formulated by me are answered thus :- The first question formulated is what is the efficacy of the regular assessment proceedings which took place before and after the admission of the case by the Settlement Commission for settlement under Chapter XIX A of IT Act. The answer is that it is only after a formal order of allowing or admitting the application for consideration of settlement is recorded by the Settlement Commission that all earlier assessment proceedings and recovery proceedings, if any, issued pursuant thereto, would become subject to the order of the Settlement Commission which will exercise all powers conferred on the income-tax authority under the IT Act. The second question is what would be the extent of liability towards payment of interest on the tax as determined and found due in a case settled by the Settlement Commission in various situations contemplated in the IT Act like non-payment of tax or delayed payment of tax in the course of regular assessment. As has been settled by five Judges Bench in the case of Anjum Ghaswala (supra), the Settlement Commission has no power to waive interest on the tax determined and found due while considering the case under Chapter XIX A in various statutory eventualities as delineated in the impugned orders of the Special Bench of the Settlement Commission. The ­interest on the "aggregate income" based on earlier disclosed and subsequently disclosed income, is to be determined by the Settlement Commission and on the tax found due on such income, interest will be charged in accordance with the provisions applicable in the regular assessment proceedings. The ­interest on the "aggregate income" based on earlier disclosed and subsequently disclosed income, is to be determined by the Settlement Commission and on the tax found due on such income, interest will be charged in accordance with the provisions applicable in the regular assessment proceedings. The starting point of charging interest would be the due date of ­payment of advance tax or tax assessed and demanded as applicable to regular assessment proceedings and the end point the date of the order of the Settlement Commission. The tax and interest already paid, if any, on the basis of regular assessment would be adjusted from the quantum of interest and tax found due and as determined by the Settlement Commission. It is clear that the provisions do not allow charging of any interest on interest found due. 60. With the aforesaid additional reasons, I respectfully concur with the opinion expressed by Pasayat J. The questions are answered accordingly. 61. The appeals are disposed of accordingly. Arijit Pasayat, J.— The basic issue involved in this appeal is whether the Settlement Commission (hereinafter referred to as 'the Commission') gets a complete role in total substitution of other authorities under the Income Tax Act, 1961 (in short 'the Act') and if so, for what purpose and to what extent. When this appeal was placed before a Bench of two learned Judges, it was considered appropriate to list the appeal before a larger bench than merely bench of two Judges. 2. That is how the matter was placed before us. 3. Factual backdrop in nutshell is as ­follows: Respondent-Damani Brothers (hereinafter referred to as the 'assessee') filed an application for settlement before the Mumbai Bench of the Commission. Chairman of the Commission exercising power under Section 245 (BA)(5A) of the Act constituted a Special Bench vide order dated 18.9.1998 for adjudicating following three issues. "1. Was the Special Bench of the Settlement Commission right in holding in the case of Om Metals and Mineral Pvt. Ltd. (193 ITR 57 - ITSC) that the assessment order passed by the assessing officer before the admission of the settlement application subsisted and recovery proceedings continued, even after the admission of the said application, especially after the judgment of the Supreme Court in the case of CIT vs. Express Newspaper Ltd. (206 ITR 443)? 2. 2. If the answer to question No.1 is in the affirmative would it be correct to say that once the Settlement Commission determines a liability of the applicant for tax, penalty and interest under section 245D(4), the orders of the lower authorities would automatically stand set aside and consequently there will be no liability under section 220(2) of the Act? 3. If the answer to question No. 1 is in the affirmative, or not the question No.2 in the negative, has the Settlement Commission powers to waive interest u/s 220(2) of the Act?" 4. The Special Bench by majority view in its judgment dated 15.4.1999 came to hold that the orders of the lower authorities are not automatically set aside by the Commission's order under Section 245D(4); but are modified to give effect to such order. By the theory of merger, the liability of interest under Section 220(2) if any, will be up to the date of the order under Section 245D(1). Thereafter, there will be no liability for interest under Section 220(2); the Commission has power to waive or reduce interest under Section 220(2) of the Act. The Vice Chairman did not agree with a reply to question No.3 and held that recovery proceedings based on the order of the assessments passed before the date of filing an application under Section 245C can be continued even after the admission of the application and where the assessment order is passed after the date of filing an application under Section 245C, the question of liability of interest under Section 220(2) does not arise. Civil Appeal has been filed raising the following questions: "I. Whether the Settlement Commission is empowered to waive or reduce the interest u/s. 234-A read with Section 220 [2] of the Income Tax Act while exercising its jurisdiction under Section 245-D[4] of the said Act? II. Whether the Assessment Order passed by the Assessing Officer prior to the admission of Settlement Application under Section 245-C of the Act, will subsist and the recovery proceedings will continue or not? On this issue, the petitioner is relying on the decision, reported in 206 ITR 443 [S.C.]; CIT vs. Express Newspaper Ltd. III. Whether after determination of liability by the Settlement Commission, the orders of the lower authorities under the Act would automatically stand set aside?" 5. On this issue, the petitioner is relying on the decision, reported in 206 ITR 443 [S.C.]; CIT vs. Express Newspaper Ltd. III. Whether after determination of liability by the Settlement Commission, the orders of the lower authorities under the Act would automatically stand set aside?" 5. Stand of the revenue as highlighted is that the Commission's approach is not correct and is not sustainable. Reference is made to the Constitution Bench decision of this Court in Commissioner of Income Tax v. Anjum M.H. Ghaswala and Ors. (2001(252) ITR 1). Reference was made to various provisions of Chapter XIX-A in this regard. It is further submitted that there is no power of waiver conferred on the Commission to waive the interest charged under Section 220(2) of the Act. 6. In response, learned counsel for the assessee submitted that an artificial distinction is sought to be made between the date of filing of petition under Section 245C and the date of decision to proceed with the petition under Section 245D. With reference to definition of the expression "case" as appearing under Section 245A, it is submitted that the proceedings may be pending before the concerned authority i.e. the Assessing Authority, the Appellate Authority or the Revisional Authority; and Explanation (1)(v) to Section 153(3) makes it clear that extension is granted for completing the pending proceedings in case the petition under Section 245C is rejected. Therefore, Commission gets jurisdiction to deal with the matter, as soon as an application is made under Section 245C. Commission till admission of the petition exercises powers of the income-tax authorities and after admission it functions as a Settlement Commission in addition to powers exercisable by the income-tax authorities. With reference to Anjum's case (supra) it was submitted that specific power of waiver is given to the concerned authority and, therefore, interest charged can be waived. There cannot be double levy of interest and when interest is charged under Section 245D(2C)/6A interest under Section 234B cannot be charged. 7. With reference to Anjum's case (supra) it was submitted that specific power of waiver is given to the concerned authority and, therefore, interest charged can be waived. There cannot be double levy of interest and when interest is charged under Section 245D(2C)/6A interest under Section 234B cannot be charged. 7. In order to appreciate the rival submissions, it is necessary to take note of few provisions so far as relevant: "Section 153(3): The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments, and recomputations which may, subject to the provisions of sub-section (2A), be completed at any time– (i) xxx xxx xxx [Explanation 1.—In computing the period of limitation for the purposes of this section– xxx xxx xxx (v) in a case where an application made before the Income-Tax Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D is received by the Commissioner under sub-section (2) of that section. shall be excluded : xxx xxx xxx Section 220(2)—If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one and one-half per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid: Provided that, where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded. Xxx xxx xxx (2A) Notwithstanding anything contained in sub-section (2), 'the Chief Commissioner or Commissioner may reduce or waive the amount of interest paid or payable by an assessee under the said sub-section if he is satisfied that - (i) payment of such amount has caused or would cause genuine hardship to the assessee; (ii) default in the payment of the amount on which interest has been paid or was payable under the said sub-section was due to circumstances beyond the control of the assessee; and (iii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him. Interest for defaults in payment of advance­ tax. 234B. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one and one-half per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. Explanation 1—In this section, "assessed tax" means,– (a) for the purposes of computing the interest payable under section 140A, the tax on the total income as declared in the return referred to in that section; (b) in any other case, the tax on the total income determined under sub-section (1) of section 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income. Explanation 2.—Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section. Explanation 3.—In Explanation 1 and in sub-section (3) "tax on the total income determined under sub-section (1) of section 143" shall not include the additional income-tax, if any, payable under section 143. Xxx xxx xxx (4) Where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under sub-section (1) or sub-section (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and- (i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. (5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years. "245D. Procedure on receipt of an application under section 245C. (5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years. "245D. Procedure on receipt of an application under section 245C. (1) On receipt of an application under section 245C, the Settlement Commission shall call for a report from the Commissioner and on the basis of the materials contained in such report and having regard to the nature and circumstances of the case or the complexity of the investigation involved therein, the Settlement Commission may, by order, allow the application to be proceeded with or reject the application : Provided that an application shall not be rejected under this sub-section unless an opportunity has been given to the applicant of being heard: Provided further that the Commissioner shall furnish the report within a period of forty-five days of the receipt of communication from the Settlement Commission in case of all applications made under section 245C on or after the 1st day of July, 1995 and if the Commissioner fails to furnish the report within the said period, the Settlement Commission may make the order without such report. (1A) Omitted (2C) Where the additional amount of income-tax is not paid within the time specified under sub-section (2A), then, whether or not the Settlement Commission has extended the time for payment of the amount which remains unpaid or has allowed payment thereof by instalments under sub-section (2B), the assessee shall be liable to pay simple interest at fifteen per cent per annum on the amount remaining unpaid from the date of expiry of the period of thirty-five days referred to in sub-section (2A).' (4) After examination of the records and the report of the Commissioner, received under sub-section (1), and the report, if any, of the Commissioner received under sub-section (3), and after giving an opportunity to the applicant and to the Commissioner to be heard, either in person or through a representative duly authorized in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the Settlement Commission may, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner under sub-section (1) or sub-section (3). (6) Every order passed under sub-section (4) shall provide for the terms of settlement including any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentation of facts. (6A) Where any tax payable in pursuance of an order under sub-section (4) is not paid by the assessee within thirty-five days of the receipt of a copy of the order by him, then, whether or not the Settlement Commission has extended the time for payment of such tax or has allowed payment thereof by instalments, the assessee shall be liable to pay simple interest at fifteen per cent per annum on the amount remaining unpaid from the date of expiry of the period of thirty-five days aforesaid." 8. The conclusions in Anjum's case (supra) can be summed up as follows. The conclusions in Anjum's case (supra) can be summed up as follows. (1) Commission in exercise of its power under Section 245D(4) and (6), does not have the power to reduce or waive interest statutorily payable under Sections 234A, 234B and 234C, except to the extent of granting relief under the Circulars by Notification dated 23rd May, 1996 issued by the Board under Section 119 of the Act. While exercising the power derived under the Circulars of the board, the Commission does not act as a subordinate to the Board but will be enforcing the relaxed provisions of the circulars for the benefit of the assessee in the process of settlement. (2) Interest due under the mandatory provisions like Sections 234A, 234B and 234C has to be included in the settlement. (3) Wherever the Act contemplated power to waive or reduction of interest to be exercised by any particular authority in any particular situation it has done so like in Sections 139(8), 215(4), 216 and Section 220(2A). (4) Prior to Finance Act, 1987, the corresponding sections pertaining to imposition of interest used the expression 'may’ but the change brought about in the Finance Act, 1987 is a clear indication that the intention of the legislature was to make the collection of statutory interest mandatory. The expression 'shall' is used deliberately. 9. It has to be noted that the Commission exercises power in respect of income which was not disclosed before the authorities in any proceeding, but are disclosed in the petition under Section 245C. It is not that any amount of undisclosed income can be brought to the notice of the Commission in the said petition. Commission exercises jurisdiction if the additional amount of tax on such undisclosed income is more than a particular figure (which at different points of time exceeded rupees fifty thousand or rupees one hundred thousand, as the case may be). The assessee must have in addition furnished the return of income which he is or was required to furnish under any of the provisions of the Act. In essence the requirement is that there must be an income disclosed in a return furnished and undisclosed income disclosed to the Commission by a petition under Section 245C. A new Chapter XIX-A was introduced by the Taxation Laws (amendment) Act, 1975 (in short the 'Amendment Act') w.e.f. 1.4.1976. In essence the requirement is that there must be an income disclosed in a return furnished and undisclosed income disclosed to the Commission by a petition under Section 245C. A new Chapter XIX-A was introduced by the Taxation Laws (amendment) Act, 1975 (in short the 'Amendment Act') w.e.f. 1.4.1976. The Commission is constituted by the Central Government for the settlement of cases under Chapter XIX-A. The expression "case" as appearing in Section 245A(b) refers to any proceeding under the Act for the assessment or re-assessment of income of any person in respect of any year or years or by way of appeal or revision in connection with such assessment or re-assessment which may be pending before any income-tax authority on the date on which an the application under sub-section (1) of Section 245C is made. It further provides that where any appeal or application for revision has been preferred after the expiry of the specified period and which has not been admitted then the same shall not be deemed to be a proceeding pending within the meaning of clause (b) of Section 245A. Scheme of Chapter XIX-A shows that the filing of application by the assessee is a unilateral act, and the department may not be aware of the same. It has to be noted that if an application for settlement is filed under Section 245C, it is not automatically admitted. Section 245D deals with procedure on receipt of an application under Section 245C. Under sub-section (1) thereof, the Commission after following the prescribed procedure can allow the application to be proceeded with or rejected. Only after the Commission allows the petition to be proceeded with, it exercises the power of settlement. 10. Stand of the assessee is that before the Commission decides to proceed with the matter, it exercises the functions of the income-tax authority and after deciding to proceed with the petition exercises dual function as the Commission and the income-tax authority. The plea is untenable for more reasons than one. Before the Commission decides to proceed with the petition, it cannot complete assessment in respect of a return which is pending before the assessing officer or even cannot act as an appellate or revisional authority. The return filed is in respect of disclosed income. Similar is the position vis-a-vis the appellate and the revisional authority. Before the Commission decides to proceed with the petition, it cannot complete assessment in respect of a return which is pending before the assessing officer or even cannot act as an appellate or revisional authority. The return filed is in respect of disclosed income. Similar is the position vis-a-vis the appellate and the revisional authority. The petition before the Commission is in respect of undisclosed income, therefore, the situation is different till the Commission decides to proceed with the matter. That being the position, the income-tax authorities are free to proceed in the prescribed manner till the Commission decides to proceed with the petition. Emphasis was laid by the assessee on certain observations made by this Court in Commissioner of Income Tax v. Express Newspapers Ltd. (1994 (206) ITR 443). Observations to the effect that the proceedings before the Commission are not confined to the income disclosed before it, does not mean that even before the Commission decides to proceed with the case, it can deal with disclosed income. While determining the total income, the Commission has to take note of both the disclosed income and the undisclosed income. This is logical because there cannot be two different total incomes for the same assessment year i.e. disclosed total income and undisclosed total income. Aggregation of both the disclosed and undisclosed income is also necessary because in several years different rates of tax for various slabs of income are provided. By way of an illustration, it may be said that supposing the disclosed income is rupees two lakhs and the undisclosed income is five lakhs, the rate of tax levied on rupees two lakhs may be one but may be different for an income of rupees seven lakhs. For the purpose of computation of taxes, there is a requirement to club both the disclosed and undisclosed income. But that does not empower the Commission to deal with the disclosed income before deciding to proceed with the petition. 11. In view of the position indicated above, relating to the first question considered by the Commission, the second question does not really survive. The position is indisputable that the liability exists and does not get automatically set aside. 12. Coming to the third question, the answer is provided in Anjum's case (supra). Wherever the Act provides for waiver of interest, the Commission can in appropriate cases direct waiver or reduction of the interest. The position is indisputable that the liability exists and does not get automatically set aside. 12. Coming to the third question, the answer is provided in Anjum's case (supra). Wherever the Act provides for waiver of interest, the Commission can in appropriate cases direct waiver or reduction of the interest. It has to be noted that waiver or reduction of interest under Section 220(2A) and other provisions is hedged with certain conditions. If these conditions are satisfied, the Commission has the power to direct waiver or reduction. In view of this answer, the Commission has to examine whether the assessee has made out a case for waiver or reduction. 13. At this juncture, assessee's plea that there is no scope for double levy of interest; (i) for non payment of advance tax for which interest is chargeable under Section 234B of the Act and (ii) for delay in payment of the amount of interest, if any, payable in terms of Section 245D(2C) or Section 246D(6A) needs to be considered. There can be no dispute that double levy of interest is not permissible. But this principle is applicable only when the interest is chargeable more than once for same set of infractions. If the provisions under which interests are charged operate in different fields, there is no statutory bar on levying the interest, because in essence it does not amount to double levy of interest but levy of interest separately for different infractions. Section 234B, Section 245D(2C) and Section 245D(6A) operate in different fields. Section 234B comes into operation when there is default in payment of advance tax. Liability to pay interest under Section 245D(2C) arises when additional amount of income-tax is not paid within time specified under sub-section (2A). Section 245D(6A) fastens liability to pay interest when tax payable in pursuance of an order under sub-section (4) is not paid within the specified time. Therefore, when interest is charged in respect of the said provisions it does not amount to double levy of interest, as the infractions are different. 14. To put it differently, the interests charged in terms of Sections 234A, B and C become payable on the income already disclosed in the returns filed, together with the income disclosed before the Commission. The concerned interest as aforesaid shall be on the consolidated amount of income, i.e. both disclosed and undisclosed. 14. To put it differently, the interests charged in terms of Sections 234A, B and C become payable on the income already disclosed in the returns filed, together with the income disclosed before the Commission. The concerned interest as aforesaid shall be on the consolidated amount of income, i.e. both disclosed and undisclosed. As indicated above, such interests shall be charged till the Commission acts in terms of Section 245D. Thereafter, the prescription relating to charging of interests etc. becomes operative, after the Commission allows the application for settlement to be proceeded with. In such event, there is no further charge of interest in terms of Sections 234A, B and C. The interest charged in terms of Section 245D is a separate levy and not in terms of interest chargeable under Sections 234A, B and C. Therefore, the apprehension that there is scope for charging of interest on interest is without any basis. 15. The appeal is allowed to the extent indicated above. (N.K.R.) Order accordingly.