Judgment :- Petitioner is challenging Ext. P5 demand notice for recovery of arrears of salestax and interest for the assessment years 1986-87, 91-92 and 92-93. 2. According to the petitioner, petitioner was entitled to refund of Rs.6,821/- vide Ext. P1 dated 27-2-1991, which is an order in appeal issued by Deputy Commissioner of Salestax (Appeals) against an order of penalty levied on the petitioner u/s 29A(4) of the KGST Act. Petitioner’s case is that refund to him should have been adjusted towards arrears of tax due for the above three years in terms of section 44(3) of the KGST Act and after failing to adjust the amount, the assessing officer cannot demand interest for non-payment of tax for the said three years. 3. Government Pleader, on the other hand, submitted that section 44(3) of the Act authorizes adjustment of refunds by the assessing officer and since the assessing officer was not aware of the refund granted by the 2nd respondent to the petitioner, he could not have made any adjustments. 4. It is seen from the records that the arrears are due from the petitioner under revised orders for 1986-87 dated 26-12-98 and under regular assessments for the years 1991-92 and 1992-93 dated 17-1-1998. However, much before these demands were raised, petitioner was entitled to get refund of Rs. 6,821/- under Ext.P1 dated 27-2-91. It is seen that petitioner is a dealer registered with 1st respondent at Thodupuzha. The refund due to petitioner is from 2nd respondent that too based on Ext. P1 order. Obviously, the 1st respondent could not have voluntarily adjusted refunds due to the petitioner from another officer stationed in another place. It was open to the petitioner to collect the refund amount from the concerned officer and remit the same before he assessing officer or at least ask for transfer of credit by one officer to another for adjustment against demands. However, there is nothing to indicate that petitioner requested for transfer of credit from 2nd respondent to 1st respondent and therefore I find no lapses on the part of the first respondent to adjust refunds against assessed tax due from the petitioner under Section 44(3) of the Act. 5. However, there is nothing to indicate that petitioner requested for transfer of credit from 2nd respondent to 1st respondent and therefore I find no lapses on the part of the first respondent to adjust refunds against assessed tax due from the petitioner under Section 44(3) of the Act. 5. Even though petitioner is challenging the higher rate of interest provided under section 23(3), which is interest payable by the defaulters for belated payment of tax as against much lower rate of interest payable by Government on refunds under Section 44(4) of the Act as arbitrary, discriminatory and violative of Article 14, I am unable to uphold the contention for more than one reason. In the first place, interest payable to the Government by defaulters for belated payment of tax or any other amount due from dealers or defaulters, cannot be equated with interest payable to a dealer for excess payment of tax. This is because unless deterrent rate of interest is provided for default, timely compliance in payment of tax is unlikely. Higher rate of interest provided for default, is a deliberate and conscious policy decision of the legislature for encouraging timely payment of tax, and the provision for payment of interest by the Government for delay in refund of excess tax paid is essentially compensatory in nature. Moreover the differential treatment of Government and individual assesses, the beneficiaries of interest in both cases cannot be said to be arbitrary and violative or Art. 14 because both do not belong to the same class. Revenue collected is for public welfare and it’s timely recovery is essential for the proper administration of the State and therefore higher rate of interest is provided for default to deter delay in payment. Lower rate of interest is provided for delayed refund to compensate the assesses. In the circumstances, I do not think section 23(3) of the Act is discriminatory or arbitrary and violative of Article 14 of the Constitution of India. Even though I am not in agreement with all what is stated by the Gujarat High Court in the decision reported in Asha v. State of Gujarat (89 STC 289), I find they have also upheld provisions for higher rate of interest for defaulters as against the lower rate provided on refund. 6. Even though I am not in agreement with all what is stated by the Gujarat High Court in the decision reported in Asha v. State of Gujarat (89 STC 289), I find they have also upheld provisions for higher rate of interest for defaulters as against the lower rate provided on refund. 6. In view of the above findings, petitioner is liable to pay interest for the belated payment of salestax for 1986-87, 1991-92 and 1992-93 under Section 23(3) of the Act. However he is entitled to claim interest on the refund amount due from 2nd respondent at the rate provided under Section 44(4) of the Act. However, having regard to the contentions raised, and since during the pendency of the Original petition amnesty was granted for settlement of liability I waive 40% the interest payable under Section 23(3) direct the respondents to permit the petitioner to settle liability by paying the arrest of tax together with 60% interest provided entire payment is made on or before 30-9-2006. If payment is not made as above, then waiver of 40% interest granted will stand vacated and respondents will be free to proceed for recovery of the entire arrears. O.P. is disposed of as above. First respondent will give a detailed statement of computation of interest for all these years after crediting the payments, already made and by correcting mistakes if any in the amount shown in the revenue recovery notice, within a week from the date of production of a copy of this judgment. Petitioner can claim refund with interest from the concerned officer who is not a party in this O.P. No costs.