A.S.Venkatachalamoorthy, J.: The petitioner, namely, M/s.Western India Cashew Company, is an assessee on the files of the Deputy Commercial Tax Officer, Thuckalay, Kanyakumari District, and it is engaged in the business of processing of cashew nut kernels and exporting the same to foreign countries. Originally, the provisions of the Tamil Nadu General Sales Tax Act, Entry No.88 of I Schedule to the said Act, with effect from 4.3.1974, did not make any difference between cashew nut and kernels. Subsequently, by G.O.P.No.701/CT & RE, dated 07.08.1995, with effect from 1.10.1985, the entry was amended as cashew nut with shell and cashew kernel including processed. From the assessment year 1974 onwards, the 2nd respondent completed the assessment under the provisions of the Tamil Nadu General Sales Tax Act and treated the cashew nut and cashew nut kernels as same commodity. No tax was levied on cashew nut if the petitioner exported cashew nut kernels. No purchase tax was imposed under Sec.7(A) of the Act. In 1983, the authorities in Tamil Nadu started issuing notice for imposing purchase tax by disallowing the claim of Export sales under Sec.5(3) of the CST Act, on the ground that cashew nut and cashew nut kernel are different commercial commodities and hence, if cashew nuts were purchased locally for the purpose of export, then, purchase tax under Sec.7(A) can be imposed. In view of the change in the nature of the commodities, no exemption under Sec.5(3) of the CST Act was available. Dealers challenged the said notices and writ petitions were filed before the High Court, Madras. The High Court admitted the writ petitions and also granted interim stay. The writ petitions filed were heard together and disposed of by the Court, by a common judgment dated 12.12.1984, which has been reported in Vinod Cashew Corporation v. Deputy Commercial Tax Officer and another, 61 S.T.C. 1 and the Court confirmed the levy of tax and held that cashew nut and cashew nut kernels are different commercial commodities. Thereafter, the matter was taken up to Supreme Court by filing Special Leave Petition. The Supreme Court granted special leave and also granted interim stay of recovery of taxes. The matter was finally disposed of by the Supreme Court on 15.12.1995, confirming the judgment of the Madras High Court and the same has been reported in Vijayalaxmi Cashew Company v. Deputy Commercial Tax Officer, 100 S.T.C. 571. 2. The Supreme Court granted special leave and also granted interim stay of recovery of taxes. The matter was finally disposed of by the Supreme Court on 15.12.1995, confirming the judgment of the Madras High Court and the same has been reported in Vijayalaxmi Cashew Company v. Deputy Commercial Tax Officer, 100 S.T.C. 571. 2. According to the petitioners, in respect of assessment year 1977-78, they were protected by the interim orders of the Supreme Court till 5.3.1986 and in respect of the assessment year 1978-79, the petitioners filed a writ petition against the notice dated 17.11.1983, issued for re-assessment. The High Court of Madras admitted the writ petition and granted interim stay. The stay granted, continued till 12.12.1984. In respect of assessment for the year 1977-78, second appeal was pending before the Tamil Nadu Sales Tax Appellate Tribunal, Madurai and for 1978-79, 1979-80, 1980-81 and 1981-82, the petitioners filed appeals before the first appellate authority, who dismissed the appeal. The second appeal filed before the Sales Tax Appellate Tribunal, Madurai, was also dismissed, following the judgment of the Supreme Court in Vijayalaxmi Cashew Company v. Deputy Commercial Tax Officer, 100 S.T.C. 571. The 2nd respondent issued proceedings, directing the petitioners to pay penalty under Sec.24(3) of the Act on the ground of delay in making payment of taxes, by his proceedings dated 1.3.2001 and this was questioned by the petitioners by filing O.P.No.330 of 2002 before the Tamil Nadu Taxation Special Tribunal, Chennai. The Tribunal, by an order dated 7.5.2002, dismissed the petition, holding that the said proceedings dated 1.3.2001 is valid, legal and the same cannot be quashed. Being aggrieved by the said order of the Tribunal, the petitioner has filed the writ petition before this Court. 3. In brief, the question that arises for consideration is, as to whether the 2nd respondent is justified in making a demand of Rs.41,67,981 under Sec.24(3) of the TNGST Act? 4. Learned counsel for the petitioner has contended that once an order of stay is granted by the High Court and the Supreme Court, then, the period, during which the order of stay was in operation, it has to be construed that the order was not in force and that being so, the question of the petitioner committing default would not arise. According to him, the Deputy Commercial Tax Officer is not justified in invoking Sec.24(3) of the Act and imposing penalty. According to him, the Deputy Commercial Tax Officer is not justified in invoking Sec.24(3) of the Act and imposing penalty. 5. The stand of the Department is that even though the word ‘penalty’ was used in Sec.24(3) of the Act, in effect and substance, what was provided for is nothing more than interest, which is claimed by the State, because the amount of arrears of taxes which should have gone to the coffers of the State is being retained by the dealer and it is only by way of compensation for use of such of the moneys, which rightly belongs to the State, by the assessee. 6. Sec.24(3) of the TNGST Act, 1959 as it stood prior to Tamil Nadu Act 22 of 1982, reads thus: "If the tax assessed under this Act or any instalment thereof is not paid by any dealer or person within the time specified therefor in the notice of assessment or in the order permitting payment in instalments, the dealer or person shall pay by way of penalty, in addition to the amount due, a sum equal to a sum calculated at the rate of 2% of such amount for each month or part thereof after the date specified for its payment." 7. During 1982-84, several writ petitions were filed, questioning the validity of Sec.24(3) of the Tamil Nadu General Sales Tax Act, 1959 as well as the validity of the notice of demand issued under Sec.24(3) of the act before it was amended by Act 22 of 1982. A Division Bench of this Court, considering the said provisions of the Act, in the light of various Rulings, held in the ruling reported in Sakthi Sugars Limited v. Assistant Commissioner of Commercial Taxes, 59 S.T.C. 52, that a true construction of Sec.24(3) of the Act only provides for payment of interest by the defaulting assessee. A Division Bench of this Court, considering the said provisions of the Act, in the light of various Rulings, held in the ruling reported in Sakthi Sugars Limited v. Assistant Commissioner of Commercial Taxes, 59 S.T.C. 52, that a true construction of Sec.24(3) of the Act only provides for payment of interest by the defaulting assessee. We hereunder quote the relevant paragraph from the said judgment: "Since as a part of the argument challenging the validity of Sec.24(3) stress has been laid on the use of the word "penalty" and a comparison is sought to be made with the other provisions providing for penalty in the Act, we may at once point out that on a true construction of Sec.24(3) of the Act, though the word "penalty" has been used therein, what has been provided for, is nothing more than interest, which is claimed by the State, because the amount of arrears of taxes which should have gone to the coffers of the State is being retained by the dealer, and it only by way of compensation for use of such of the moneys, which rightly belongs to the State by the assessee that a payment to the State which has been described as penalty, has been provided for in Sec.24(3) of the Act.“ The Court also ruled, when what is demanded under Sec.24(3) is not a penalty as generally understood, then, there is no question of affording any opportunity for hearing of the defaulting assessee arises and that no discretion is left to the assessing authority either with reference to the rate at which the penalty is to be levied or with reference to the time for which the penalty is to be levied. That judgment has become final in the sense that the writ petitioners in those cases did not take up the matter further before the Supreme Court of India. That being so, what was claimed by the Department was the interest for the delayed payment of tax. 8. Of course, learned counsel for the petitioners would contend that once an order of stay was granted by the High Court and the Supreme Court, then, it should be taken that such order was not in force during that period and that being so, no tax can be demanded. 9. We do not find any substance in this submission. 8. Of course, learned counsel for the petitioners would contend that once an order of stay was granted by the High Court and the Supreme Court, then, it should be taken that such order was not in force during that period and that being so, no tax can be demanded. 9. We do not find any substance in this submission. By virtue of the order of stay, only the recovery or collection of tax was postponed till the matter is decided by the Court and nothing more than that. There is no basis for the petitioners to claim that the period, during which the stay was in operation, has to be excluded and that the writ petitioner is not liable to pay any tax which is in the nature of compensation for the said period when the stay was in force. The following paragraph in the Judgment of the Supreme Court in Calcutta Jute Manufacturing Company v. C.T.O., 106 S.T.C. 433 would be an answer to the point raised by the writ petitioner: ”The tax amount which they should have paid as per Sec.6-B remained with the appellant during the entire period and they would have earned good profit with that amount. The State, to which the tax amount should necessarily have gone, was not able to utilize it for public purposes. When appellants had the advantage of keeping the amount of tax without paying it to the State exchequer only because the High Court granted orders restraining the State from recovering that amount from the assessee, no act of the Court shall cause prejudice to any party. The prestine doctrine couched in the maxim “actus curiae neminem gravabit” has ever remained a salutary and guiding principle.“ 10. Learned counsel for the petitioner would submit that in view of the ruling of the Supreme Court reported in Consolidated Coffee Limited v. Agrl. I.T.Officer, 248 I.T.R. 417, the Division Bench Ruling of this Court reported in Sakthi Sugars Limited v. Assistant Commissioner of Commercial Taxes, 59 S.T.C. 52 is no longer a good law. Elaborating his submission, learned counsel submitted that what is sought to be done by the Department by invoking Sec.24(3) is to penalise the petitioner/assessee and once there was an order of stay in favour of the petitioner, the question of the petitioner committing default would not arise. Elaborating his submission, learned counsel submitted that what is sought to be done by the Department by invoking Sec.24(3) is to penalise the petitioner/assessee and once there was an order of stay in favour of the petitioner, the question of the petitioner committing default would not arise. According to the learned counsel, following the said ruling, the impugned demand is liable to be quashed. That was a case arising under the Karnataka Agricultural Income Tax Act, 1957. It is necessary to quote Secs.41 and 42 of the said Act, which read as under: ”41. Tax when payable: (1) Any amount specified as payable in a notice of demand under Sec.31 or an order under Sec.32, Sec.32-A, Sec.34 or Sec.35, shall be paid within the time, at the place and to the person mentioned in a notice or order or if a time is not so mentioned, then, on or before the first day of the second month following the date of the service of the notice or order and any assessee failing so to pay shall be deemed to be in default. (2) If an assessee makes an application within the time mentioned in the notice of demand in Sec.31, for being allowed to pay the tax due, the Agricultural Income-tax Officer may in his discretion, by order in writing, allow the assessee to pay the tax due, in instalments not exceeding four in number at such intervals as the said officer may fix in his discretion or extend the time for the payment of the entire tax due for such reasonable period as he may fix, if the assessee undertakes in writing to pay interest at the rate charged by the scheduled banks for unsecured loans; Provided that if, on being allowed to pay the tax due by instalments, the assessee defaults in the payment of any one instalment, he shall be deemed to be a defaulter in respect of the total remaining amount of tax due. 42. 42. Mode and time of recovery: (1) Where any assessee is in default in making payment of the tax or any other amount due under this Act,-- (i) the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax or any other amount due under this Act, and (ii) the person or persons liable to pay the tax or any other amount due under this Act shall pay a penalty equal to-- (a) one and one half per cent. of the tax remaining unpaid for each month for the first three months after the expire of the time specified under Sub-sec.(1) or allowed under Sub-sec.(2), of Sec.41; and (b) two and one half per cent. of such tax for each month subsequent to the first three months as aforesaid. Explanation: For the purposes of Clause (ii) the penalty payable, for a part of a month shall be proportionately determined. (2) Any tax assessed or any amount due under this Act from any assessee or any other person may, without prejudice to any other mode of collection, be recovered-- (a) as if it were an arrear of land revenue; or (aa) by attachment and sale or by sale without attachment of any property of such assessee or any other person by such authority, in such manner, as may be prescribed; (b) notwithstanding anything contained in the Code of Criminal Procedure, 1973 (Central Act 2 of 1974), on an application to any Magistrate, by such Magistrate, as if it were a fine imposed by him; Provided that where an assessee or other person who has appealed or applied for revision of any order made under this Act and has complied with an order made by the appellate or the revising authority in regard to the payment of tax or other amount, no proceedings for recovery under this sub-section shall be taken or continued until the disposal of such appeal or application for revision. (3) The High Court may either suo motu or on an application made by the Commissioner or any person aggrieved by the order revise an order made by a Magistrate under Clause (b) of Sub-sec.(2)." A reading of Sec.41 would show that it contemplates the payment of interest when an assessee seeks time for payment of the tax due and it appears, there is yet another provision with regard to payment of interest viz., Sec.61. The Court also noted that proviso clause to Sub-sec.(2) of Sec.42 recognised that during the period the stay is in operation, recovery of tax cannot be effected because the order of stay has placed the demand for the tax in abeyance and during the period of stay, it cannot be said that the assessee is in default. The Supreme Court ultimately held that the assessee was not in default and that it cannot be subjected to penalty under Sec.42 of the said Act. We are of the view that it is necessary to extract the relevant portions in the said judgment, which read as under: "It may immediately be noted that Sec.41 contemplates the payment of interest when an assessee seeks time for payment of the tax due. A provision in regard to interest is also to be found in Sec.61 of the Act. There is, therefore, no good reason for assuming, as the High Court appears to have done, that what Sec.42 contemplated was in reality the payment of interest and not penalty. Interest is compensatory, penalty is penal, that is, punishing in character. Sec.42 requires the payment of penalty by an assessee who has not paid tax in time and the quantum of the penalty increases with the delay. Sec.42 speaks of an assessee in default. The question, therefore, is: can an assessee be said to be in default during the period for which an order of stay of recovery of the tax due from him is operating? The answer is indicated in the proviso to Sub-sec.(2) itself. Sub-sec.(2) empowers the collection of tax from an assessee in default as if it were an arrear of land revenue and as if it were a fine imposed by a magistrate under the Code of Criminal Procedure. The answer is indicated in the proviso to Sub-sec.(2) itself. Sub-sec.(2) empowers the collection of tax from an assessee in default as if it were an arrear of land revenue and as if it were a fine imposed by a magistrate under the Code of Criminal Procedure. The proviso says that where an assessee or other person has appealed or applied for revision of any order made under the said Act and has complied with an order made by the appellate or the revising authority in regard to the payment of tax, no proceedings for recovery under Sub-sec.(2) may be continued until the disposal of the appeal or revision. Thus, there is recognition that during the period the stay is in operation recovery of the tax cannot be effected. It cannot be effected because the order of stay has placed the demand for the tax in abeyance. During the period of the stay, therefore, the assessee is not in default. As has been pointed out by this Court in Kanoria Chemicals and Industries Limited v. U.P. State Electricity Board, (1997)5 S.C.C. 772 , an order of stay may be made in different ways but the effect thereof is the same, namely, that for the period during which an order of stay operates, the order that is stayed does not exist in the eye of the law. Once the stay is vacated, the order is resuscitated and may then be executed. For the period of stay, therefore, the assessee cannot be said to be in default of the orders stayed and, therefore, no penalty in that behalf can be imposed. Our attention was invited by learned counsel for the taxing authorities to the judgment in the case of Kanoria Chemicals and Industries Limited v. U.P. State Electricity Board, (1997)5 S.C.C. 772 , just referred to, as relevant to a case of penalty. That was a case that related to late payment surcharge/interest on an amount due. The question was whether such late payment surcharge/interest was penal in nature and, therefore, could not be recovered, having regard to the stay of recovery thereof granted by an appropriate authority. This Court did not accept the argument that it was penal but, having regard to the fact that the rate of late payment surcharge seemed penal on the facts and circumstances of the case, it reduced the assessee’s obligation in respect thereof. This Court did not accept the argument that it was penal but, having regard to the fact that the rate of late payment surcharge seemed penal on the facts and circumstances of the case, it reduced the assessee’s obligation in respect thereof. We cannot, based upon the aforesaid judgment or otherwise, accept the submission of learned counsel for the taxing authorities that the penalty contemplated by Section 42 is analogous to a late payment surcharge/interest. A late payment surcharge/interest is necessarily compensatory in character. A penalty is a punishment. In the premises, we hold that the assessee was not in default for the period June 24, 1989, onwards and that it cannot be subjected to penalty under Sec.42 in regard to that period. The demand in that behalf is set aside. " [Italics supplied] Only in the facts and circumstances of that case and considering the provisions of that Act, the Court held that there is no good reason for assuming that what Sec.42 contemplated in reality was payment of interest and not penalty. We are of the view that the said ruling relied on by the learned counsel for the petitioner would not help him in any way and it cannot be said that the earlier ruling referred to by us viz.,Sakthi Sugars Limited v. Assistant Commissioner of Commercial Taxes, 59 S.T.C. 52 has been overruled in Calcutta Jute Manufacturing Company v. C.T.O., 106 S.T.C. 433. 11. Learned counsel also placed reliance on another ruling in Yeshaswi Cashew v. State of Karnataka, 124 S.T.C. 465, which is a Division Bench judgment of the Karnataka High Court. That was a matter arising under the Karnataka Sales Tax Act (25 of 1957). We find that the provisions in this Act are identical to the provisions in the Karnataka Agricultural Income-tax Act, 1957. In fact, in this case, the Division Bench relied on the ruling of the Supreme Court in Consolidated Coffee Limited v. Agricultural Income-tax officer, 248 I.T.R. 417. Thus, this Ruling certainly will not help the petitioner to substantiate its submission. 12. From the above discussion, we are of the view that there are no merits in this writ petition. Consequently, the writ petition is dismissed. Connected W.P.M.P. is closed.